Ashaka Cement profits surge in 1H14

Byrebecca3360

Updated Wed, 13 Aug 2014 09:56:54 GMT

Ashaka Cement has posted first half pre-tax profit of N4.39 billion, up from N1.65 billion in 1H13, an increase of more than 166%. Profit after tax grew more than 200% to N3.51 billion, while the Nigerian company’s net margin reached 28.33% from 9% in 1H13.

Costs fell to 58.13% from 80% last year, which is attributed to the company’s use of coal as a cheaper source of energy. However, revenues grew only 4% to N12.32 billion. A decline in cement demand due to the rainy season could have contributed to lower sales, reports Business Day Online.

Meanwhile, Ashaka Cement is gearing up for expansion, having secured the necessary credit to support its growth plans. In April, the company announced plans to inject N100 billion into capacity expansion, a coal-fired captive power plant and other projects. As the most populous country in Africa, Nigeria has a huge housing shortage and considerable potential for growth within the cement industry. However, there is also a great deal of competition from Dangote Cement, which holds the greatest market share in the country.