We have extracted the financial summary from the full year report of Lafarge Zambia listed on the Lusaka Securities Exchange under the share code LACZ.zm. Lafarge is a manufacturer and distributor aggregate products and cement for local and export building use
The following is an excerpt from the full year report:
The Zambian cement market underwent a strong recovery in 2018. The dry spell in January allowed many contractors to continue working without disruption in the first quarter, a period in which large construction firms typically undergo an industrial break.
The domestic cement market is estimated at approximately 2.1 million tonnes of cement, representing an average growth of 30% compared to 2017. Lafarge Zambia continues to be the industry leader, with a strong presence at cement and hardware retailers, as well as a range of solution that make us the preferred partner for large projects such the Kafue Gorge Lower Hydropower Station. The focus on these major projects allowed us to maintain a resilient level of sales in the face of new competition entering the market in July 2018.
Exports, however, were subdued in 2018 due to new cement production capacity being commissioned in Malawi, as well as an overall market slowdown in DRC in the second half of the year, with many projects halted in view of the elections of December 2018. Construction activity is however expected to resume in early 2019. The Company’s turnover was K1,142 million, 13% higher compared to K1008 million in 2017.
The Company’s gross profit rose by 20% to K576 million, attributed to the high turnover and cost reduction measures.
Fuel prices were increased by over 20% in 2018. Strong cost management initiatives mitigated the impact of higher production cost resulting from the rise in coal and fuel costs. Profit before tax increased by 81% in 2018, which is attributable to a decrease in marketing and administration costs, exchange gains and reduction in impairment charges compared to 2017.
In terms of our outlook for the future, we remain committed to delivering on our 2019 targets and we are confident that our stakeholders will benefit from the platform we have put in place to drive growth and create value. We are also benefiting from our good relationships with Government as their continued pursuit of infrastructure development will lead to sustained growth in our industry.
We will keep leveraging our global capabilities and continuously improve the quality and accessibility of our products and services to our customers around the region.
I would like to thank our employees for their continued efforts and commitment to our customers. They have worked tirelessly under very difficult circumstances to ensure the quality, affordability and accessibility of our products.
I am grateful to the Board for their continued guidance and leadership and I remain indebted to our shareholders for their enormous support.