Early this month, Ashaka Cement plc (AshakaCem) released its first-quarter (Q1) 2015 results at the Nigerian Stock Exchange (NSE). The company’s top-to-bottom line figures declined considerably. Revenue dropped from N6.5 billion in Q1 2014 to N4.5 billion in Q1 2015.
The unaudited statement of cash flows for the Q1’15 period also shows profit after tax declined to N889.01 million from N1.919 billion in the corresponding Q1 of 2014.
AshakaCem is the fourth largest cement manufacturing facility in Nigeria. Today, AshakaCem is a subsidiary of Lafarge Africa plc.
The company told shareholders recently at its 40th annual general meeting that it planned to invest in a significant expansion of its cement production capacity to about 4 million metric tons from the current approximately 1 million metric tons, partly with internally generated funds.
Analysts insisted that “the ongoing challenges with Ashaka Cement are not structural. As such, we expect the firm to return to normalised operational levels going forward.
We also believe that the increased substitution of coal for low-pour-fuel-oil (LPFO), which is now above 80%, will impact positively on gross margins. Indeed, Lafarge’s management stated that the challenges with Ashaka’s operation have been resolved.”
