TOUGH TIMES? WELL NOT FOR LA FARGE AFRICA.

If you are looking for companies finding it difficult to ride the current tough times in Nigeria, please don't look the way of La Farge Africa, Nigeria's veteran cement manufacturer.

La Farge Africa has not only grown into a group with cement manufacturing subsidiaries in South Africa, Egypt and here in Nigeria, it is riding a very favourable crest in the current financial year 2017.

According to half year figures released last week, La Africa total income (as estimated by Henates from the published figures) had grown by 44.4% to N156,480.6m with far less increase in associated costs.

On its own, core revenue from cement business had grown by 44.2% to N154,839.9m while cost directly related to it grew by only 19.7% to N110,390.5m leading to gross profit almost tripling to N44449.5m (up 193.6%).

Thus even administration cost increasing by 60.2% to N16,397.8m was easily absorbed not to talk of only 9.84% rise in selling and distribution expenses to N2177.8m.

Then net profit from other operating sources came to N2244.3m compared to N28,544.3m loss at the same time in 2016.

Thus, threats to La Africa's bottom line came only from 39.2% decrease in finance income to N603.6m accompanied by strong 90.2% rise in finance cost to N10,561.4m.

This was not surprising because short term loan rose from N36,487.8m to N153,593.3m in addition to 66.1% increase in overdraft to N38,198.1m.

Even, this picture may change soon if half year business trend continues through the year. Part of the short term debt growth went into reducing long term debt by 22.3% to N52,858.7m.

Besides, in view of the favourable crest, the group's N77,643.7m working capital deficit dropped significantly to N17,693.7m and should, at such a rate, turn black soon.

In the end, La Farge Africa teported N18,160.4m profit before tax for the half year compared to N30,154.2m loss previously.

In other words, it made profit of N11.6 on each N100 income within the half year compared to N27.8 loss on each N100 income previously. 

All things being equal, the worst that could happen by year end is that La  Africa cruises to finish at half year level, certainly not less.

LA FARGE AFRICA: Nm Half year
                                2017.            2016
Total income.   156,480.6.   108,358.3
Core revenue.   154,839.6.   107,364.8
Cost of sale.     110,390.3.     92,225.1
Gross profit.       44449.5.       15,139.7
Distribution.         2177.8           1982.7
Net other income 2244.3.      (28,544.3)
Finance income      603.6.             993.5
Finance cost      10,561.4.          5552.9
Profit B4 tax       18,160.4.      (30,154.2)
Profit margin%.          11.6.        (27.8)
Working capital (17,693.1).   (77,643.7)
Short debt          153,593.3.      36,487.8
Overdraft.             38,198.1.      22,995.5
Long term debt   52,818.7.      68,046.9

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