Sales slump and higher cost of new plant eat into Sephaku’s interim revenue
Markets in the six months ended September were weak but recovered strongly, says Nigerian-backed cement producer
Nigerian-backed cement producer Sephaku said on Thursday that markets in the six months ended September were weak but recovered strongly.
Revenue from its subsidiary Metier mixed concrete operation was flat. But the group said this was because of increased costs attributable to a 12th Metier plant coming on line. Associate company Dangote Cement SA and Metier are collectively known as the Sephaku group. Group net profit fell from R25.25m in the previous period to R14.80m as diluted earnings per share fell sharply.
However, the company’s net asset value increased by 25.45c a share to 488.49c, even as Metier earnings fell by R5.86m to R31.69m.
"In the first six months of the calendar year [Dangote SA] had a weak performance, recording a loss of R16m due to a 5% decrease in sales volumes, partially caused by the heavy rainfalls in February," Sephaku CEO Lelau Mohuba said.
"However, I am pleased to report that there was recovery in the cement sales volumes during the third quarter as well as increased prices."
Metier turnover remained flat at R447m for the 12 plants compared to 11 plants in the previous year, which had cut into earnings. However, the group said the 12th plant had allowed Metier to access additional cement markets in Gauteng.