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Wednesday, June 7, 2023

Lafarge Africa Profit Slips on Pioneer Tax Relief Expiration

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Lafarge Africa has seen a 14.9% contraction in its Net Income for the first quarter (Q1) of 2023 due to higher tax expense, compared to the previous year, after expiry of the Pioneer Status Incentive (PSI).

Net income for the cement manufacturer came in at N14.935 billion, with net sales up 1.3% to N91.82 billion.

The Group benefited from a tax relief arising from the pioneer tax relief granted on one of the Company’s production lines in the Mfamosing Plant.

The Company was granted pioneer tax status for additional two years with an effective production date from January 1 2021 duly certified by the Nigerian Investment Promotion Commission via a letter dated 30 July 2021. The pioneer tax relief ended on December 31, 2022.

Khaled El Dokani, CEO of Lafarge Africa, said: “Q1 2023 was a challenging first quarter due to the economic impact of the general elections and shortage of cash in circulation following the currency redesign policy. These constrained our financial performance. However, we remain focused on delivering sustainable value to all stakeholders as market recovers post-election and through the rest of the year. Lafarge Africa remains committed to accelerating green growth in line with our sustainability ambitions and targets.”

It was a slightly positive set of numbers overall for Lafarge Africa in Q1, considering the negative macroeconomic backdrop in the period.

Recurring EBIT was up 0.8% compared to the previous year, while Profit Before Tax was up by 4.7% as the general elections impacted growth in the period. The balance sheet was healthy with a net cash position of N71.6 billion and Positive Free Cash Flow of N4.7bn.

Lafarge Africa Plc, a leading Sub-Saharan Africa building solutions company is a member of Holcim Limited, a world leader in building solutions.

Listed on the Nigerian Exchange Group, Lafarge Africa is actively participating in the urbanization and economic growth of Nigeria, the largest economy in Africa.

Lafarge Africa has a wide footprint in Nigeria with cement operations in the South West (Ewekoro and Sagamu in Ogun State), North East (Ashaka, in Gombe State), South East (Mfamosing, Cross Rivers State) with Ready-Mix operations in Lagos, Abuja and Port Harcourt.

Lafarge Africa has a current installed cement production capacity of 10.5Mtpa.

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