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Lafarge Africa reported today that its 2017 first quarter revenue rose by 55 per cent as domestic cement sales grew significantly owing to seasonality effects. The company’s revenue rose to N81.31 billion, compared to N52.42 billion in a similar quarter of last year.

“Our turnaround plan continued to deliver strong results in Q1 2017, in spite of the challenging environment in Nigeria & South Africa,” said Michel Puchercos, Lafarge Africa’s CEO. “In Nigeria, domestic cement volume improved by 6 percent compared to last quarter, thanks to seasonality, however the market declined compared to last year due to the recession that started in Q2 2016.”

Given the strong top-line growth, Lafarge Africa said after-tax profit rose to N5.16 billion as against a loss after tax of N1.87 billion a year earlier. The growth in profit was supported by a capital gain of N1.2 billion arising from the sale of a property to the Lagos State Government.

“Our commercial transformation contributed to improved performance and sustained market share, the logistics and industrial improvement plan delivered the expected benefits and our energy optimisation strategy (alternative fuels & coal substitution) achieved record performance, mitigating gas shortages at low cost,” Picheros said. “In South Africa, the activities were affected by lower volumes in the cement division, despite the price increase from last year. The company continues to focus on cost optimisation, to restore profitability.”

Lafarge Africa’s revenue was in line with analysts’ estimates although its profit underperformed estimates, according to CardinalStone Partners.

“Following earlier price hikes recorded in 2016, the Group raised prices in Q1'17 as the cement manufacturer continues to protect margins,” the investment advisory firm said in a note to investors.

Notwithstanding the growth in its revenue and profit, Lafarge Africa reported a negative cash flow of N1.68 billion in Q1’17, compared to a cash flow of N24.64 billion a year earlier. The decline in cash and cash equivalents was due mainly to lower cash generated from operating activities and a decrease in short-term loans.

“In spite of the overall decline in cement market in the quarter, we expect a gradual recovery of the economy, during the second half of the year. We maintain our outlook on the cement market in Nigeria to grow between 0% to 2%,” Picheros said.

Lafarge Africa said basic earnings per share stood at 92 kobo per share compared with a loss per share of 19 kobo in Q1’16.

The company’s stock rose 10.24 per cent to close at N50.71 per share at the Lagos bourse on Monday.