SO, WHO IS BUILDING
Despite the stained and negative impacts of a harsh economy on businesses, the total revenue generated by the three giant cement Nigerian manufacturing companies for the nine months of this year rose by 20 per cent to N1.71trn compared to N1.43trn in the corresponding period of 2021. The revenue figure, to put into perspective is slightly higher than the N1.7trn 2022 budget estimates of the Lagos State Government. And the results of three more months of the year have not bee factored into the sales figures.
Castles Lifestyle findings from the Q3 unaudited interim financial statements of the companies show that BUA Cement reported a rise in revenue by a 40.5 per cent year-on-year to N262.6bn relative to N186.9bn in the corresponding period of 2021. Its Profit Before Tax grew by 19 per cent to N88.81bn from N74.33bn, despite huge operating expense.
Lafarge Africa increased its revenue and PBT figures by 23 per cent for the nine months’ period. The financial statements show that the company revenue grew to N269.85bn from N219.197bn in the corresponding period of 2021, while its PBT was rose to N53.95bn compared to N43.90bn.
“Our Q3 2022 results underscore the company’s resilience, with 23.1 per cent growth in Net Sales, 17.5 per cent growth in EBIT and 11.2 per cent growth in Net Income,” says Lafarge Africa’s Chief Executive Officer, Khaled El Dokani.
The big elephant in the room, Dangote Cement saw its revenue rise by 13 per cent to N1.177trn for the three quarters compared to N1.02trn in the same quarters in 2021. However, the company’s PBT slumped by 17 per cent to N335.90bn in 2022 from N405.49bn in 2021, a negative reflection caused by administrative, selling and distribution expenses in the nine months’ periods.
Other companies in the building material segment such as Berger Paint, Chemical and Allied Products Plc (CAP Plc), Aluminium Extrusion Industries Plc (ALEX) also reported robust increase in revenue and profit margins in the period under consideration.
Berger Paints, which sells decorative and non-decorative products, saw a 30 per cent growth in revenue to N4.53bn in the nine months of this year compared to N3.49bn reported in the corresponding period in 2021. The company’s PBT also rose by 39 per cent to N241.68m higher than N173.84m in the review period.
On its part, CAP Plc, a global brand recognised for manufacturing Dulux, Sandtex, Caplux and Hempel, grew revenue by 42 per cent to N13.06bn in the nine months of this year from N9.196bn in the corresponding period of 2021, and reported a huge PBT of N1.95bn from N850.989m, representing a 129 per cent rise.
In contrast However, the aluminium company, ALEX, reported a 10 per cent drop in revenue to N1.81bn compared also recording a 49 per cent decline in net income to N29.03m from N56.8 million in the review period.
The superlative performance of the listed companies which produce construction products, gives rise to the question – who is building? The accepted position is that the Nigerian economy is not buoyant and purchasing power of Nigerians is being reduced almost on a daily basis. But these figures show that rather than sales of building products reducing, are rising significantly. It does suggest that the construction industry (and therefore the