Lafarge Africa Plc full year 2020 profit tumbled on the back of income from discontinued operations that underpinned 2019 results, but the cement maker is making money from its core operations.
For the year ended December 2020, net income dipped by 73.20 percent to N30.84 billion from N115.10 billion the previous year.
The sharp drop at the bottom line (profit) was largely because of a N99.58 billion income from discontinued operations that stemmed from the disposal of the loss-making South Africa subsidiary in 2018.
Drilling down the financial statement shows the South Africa subsidiary made a loss of N9.38 billion in the seven months to July 2019, but the company sold it for N108.96 billion in a deal that magnified shareholders’ earnings.
Interest expense fell by 51.58 percent in December 2020 from N20.17 billion the previous year.
Interestingly, the cement maker deleveraging strategy paid off as its operating income covers interest expense 4.70 times, according to MoneyCentral calculations.
Despite the slowdown in construction activities due to the coronavirus pandemic that forced government to impose lockdown policies, the cement maker is making money from its core operations as operating income spiked by 30.82 percent to N45.67 billion as at December 2020 from N34.91 billion the previous year.