Slow But Steady: Wapco Lafarge Post Q1 Pre-Tax Profits Of N7.1billion

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Wapco Lafarge released its Q1 2013 earnings with rising moderately by 3% to N23billion (2013: N22billion). Operating profit fared better at a 7.7% rise to N7.9billion on the back of stable cost of sale. Pre-tax profits at the end of the period was N7.2billion a 10% growth from the prior period (2011: N5.7billion)

Key Highlights

• Gross Profit Margin was 43% better than 41% posted in 2012 Q1. It’s important to note cost of sales remained the same despite an increase in revenues. While this was a marked improvement for the company is was much less than what Dangote Cement posted. They grew revenues by 40% and Gross Profit Margins was 70% for Q1 respectively.
• Operating Profit margin improved to 34% as the company was able to maintain operating expenses. Operating expenses (S,G&A) was about 20% of Gross Profit. This level of expenses is fairly ok provided management continues to keep it this low and concentrate on growing top line
• Debt to Equity is still high at 52% even though interest cost seem contained at just 12%.
• Share price trades at N75.8 (6/5/2013) and has a trailing twelve months P.E of 15.4x

Wapco Lafarge Posted its Q1 2013 Earnings on the website of the NSE