BY NKIRUKA NNOROM
Ashaka Cement Plc (Ashakacem) has announced profit after tax of N3.124 billion for the year ended 31stDecember, 2013, 8.3 percent improvement over N2.885 billion recorded in the previous year
The slight increase seen in the profitability within the year could not be unconnected with the cost of sales, which remained high in line with 2011 trend, as well huge rise in taxation.
Analysis showed that the company’s cost of sales for the period rose to N13.500 billion compared to N13.276 billion in 2012, while tax payable for the year went up by 86.6 percent to N2.348 billion from N1.258 billion.
Selling and distribution expenses jumped to N617.245 million from N473.905 million, a 30.2percent increase over the period
The administrative expense at N3.775 billion was 13.7 percent increase over N3.321 billion recorded in the same period of 2011.
However, profit before tax rose by 32.1 percent to N5.473 billion from N4.4144 billion in 2011, while gross earning rose to N21.825 billion, a five percent improvement over N20.780 billion generated in 2011.
Basic earnings per share also went up marginally by 8.5 percent to 140kobo from 129kobo in the preceding year
Addressing shareholders at the last annual general meeting, the chairman, Alhaji Umaru Kwairanga, had raised hope about better return, as a result of cost cutting measures he said the company would institute in 2012.
According to him, the objective going forward was to intensify efforts in the acceleration of projects that would improve costs and production volumes so that “We are set to fully participate and enjoy the benefits the deficit in the nation’s housing stock and a large percentage of unpaved road network present in the cement industry.”
He had stated 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 (LFPO) as fuel for firing of its kilns.
Speaking at the event, the Managing Director/CEO, Mr. Neeraj Akhoury, said the prime objective of the company is to maximise the rate of utilisation of production capacity.
“The third and most important objective is to start the first phase expansion through which we should target a production capacity of 1.3 million tonnes.