Lafarge’s Ashaka Cement has reported that its first quarter 2015 profit fell despite reduced production costs. The fall was attributed to lengthy rains and insurgency in the north of the country that disrupted operations.
For the first three months that ended on 31 March 2015, Ashaka’s net income fell by 53.5% year-on-year to US$4.47m and its sales dropped by 29.8% to US$22.9m. Gross profit was down by 48.9%, while gross profit margin fell to 35.7% in 2015 compared with 48.7% in the same period of 2014. Net margin, a measure of profitability and efficiency, fell to 19.5% compared to 29.5% in the first quarter of 2014.
While Ashaka Cement’s profits fell, it was also able to reduce its costs. Cost of sales fell by 11.7% year-on-year to US$14.7m in the first quarter of 2015 as the company increased its use of local coal in place of expensive low-pour fuel oil (LPFO).
Ashaka Cement is currently expanding its cement production capacity from 1Mt/yr to 4Mt/yr.
Suleiman Yahyah, chairman of the company’s board of directors said: “As part of the expansion project, a captive coal-fired 64MW capacity power plant will be built to ensure a reliable and sufficient source of power for the existing plant and the new cement line.”
