Ashaka Cement sees profits rise 54 per cent

Nigeria-based Ashaka Cement plc has reported a YoY increase in profits of 54 per cent from NGN1.614bn (US$10.3m) to NGN2.489bn for 2Q2012 ended 30 June 2012. The company saw turnover rise to NGN12.261bn from NN10.22bn in 2Q2011.

Commenting on the result, analysts at FBN Capital Ltd said the impressive performance may not be unconnected with efficient management of distribution and logistics as well as higher utilisation of coal to fuel power plants.

“While we do not yet have management’s comments on the drivers behind the improvement in earnings, we believe that efficiency gains relating to the company’s distribution and logistics side of the business, as well as likely higher utilisation of coal in its fuel consumption mix relative to low pour fuel oil (LPFO), helped,” they said.

Ashaka chairman Alhaji Umaru Kwairanga commented positively on the road ahead as he noted that the substantial deficit in the nation’s country’s housing stock and a large percentage of unpaved road network present vast opportunities for the cement manufacturing sector.

“Our aim therefore, is to intensify efforts in the acceleration of projects that will improve our costs and production volumes so that we are set to fully participate and enjoy the benefits that these opportunities will bring,” he said.

Kwairanga added that a key element of the company’s cost reduction effort was focused on increasing the substitution rate of local coal for expensive low pour fuel oil as fuel for firing of its kilns.