Lafarge Africa Plc posted a first-quarter loss as price cuts and a fall in demand weighed on the Nigeria-based unit of the world’s biggest cement maker.
The loss after tax was 1.9 billion naira ($9.5 million) in the three months through March, compared with a profit of 5.8 billion naira a year ago, the company said in statement on Thursday. Revenue declined 29 percent to 52.4 billion naira. While the unit of LafargeHolcim Ltd. didn’t publish commentary of the figures, it said in October that pressure on prices and a market slowdown were hampering its business in Nigeria and other African countries.
“The surprising weak performance is most likely due to production issues across its plants,” including flooding, Lanre Buluro, an equity broker and analyst with Primera Africa Securities Ltd., said in e-mailed comments. The price cuts by rival Dangote Cement Plc could also have had an impact, he said.
Nigeria, Africa’s biggest economy and largest oil producer, is struggling with a plunge in crude prices. Economic growth slowed to 2.8 percent in 2015, the lowest in 16 years. The International Monetary Fund forecasts a further slowdown in 2016. Dangote Cement, Africa’s largest producer of the building material, said this week its profit for the first quarter fell 23 percent to 52.8 billion naira.
Lafarge Africa shares declined 5 percent to 70.33 naira as of 2:13 p.m. in Lagos. That extends its retreat this year to 27 percent, compared with 13 percent retreat of the Nigerian Stock Exchange All-Share Index.