Nigeria’s three biggest cement manufacturers recorded about N710.3 billion in the past year as hikes in sales and higher prices reduced pressures on operations.
The three manufacturers, however, incurred huge forex losses, which affected their net profits.
The firms’ total sales increased from N2.35 trillion in 2022 to N3.076 trillion in 2023. Their operating expenses rose from N799.79 billion in 2022 to N910.99 billion in 2023.
Profit before tax, however, declined from N713.89 billion in 2022 to N710.03 billion in 2023.
The decline in pre-tax earnings was due to BUA Cement, which saw a reduction in profitability during the review period.
After taxes, the companies’ net profit rose from N536.97 billion in 2022 to N576.17 billion in 2023.
The three manufacturers enjoy exclusive cement production and sales and have come under scrutiny and criticism by Nigerians as the price skyrocketed in one month.
Nigeria banned the importation of cement under the backwards integration project, leaving the three biggest producers as the country’s only source of cement needs.
The average price of cement has more than doubled from N4,000 to about N8000, following the rise in demand.
The Nation reports that the Nigerian Nigerian Quantity Surveyors (NIQS) estimated that the price of 50kg of cement increased by about 150% from N4,500 in January 2024 to N13,000 in February.
Following public outcry and a meeting with the Nigerian government, the manufacturers agreed to set the average price of the product at N7,000 per 50kg of cement.
An analysis of the companies showed that Dangote Cement has more than two-thirds of the market share. Its turnover rose from N1.62 trillion in 2022 to N2.21 trillion in 2023.
The company’s operating profit jumped from N585.88 billion in 2022 to N734.27 billion in 2023. Pre-tax profit rose from N524 billion to N553.10 billion, while profit after tax increased from N382.31 billion to N455.58 billion.
Lafarge Africa saw its sales rise from N373.24 billion in 2022 to N405.50 billion in 2023.
Lafarge Africa’s operating profit spiked from N84.19 billion to N102.02 billion.
Pre-tax profit rose from N69.74 billion to N80.7 billion, while its net profit dipped from N53.65 billion to N51.14 billion.
BUA Cement grew its sales from N361 billion in 2022 to N460 billion in 2023. BUA’s profit declined from N129.15 billion to N67.23 billion, while net profit dipped from N101.01 billion to N69.5 billion.
According to reports, BUA Cement’s performance was affected by forex losses, going from N5.50 billion in 2022 to N69.96 billion in 2023.
