The Nigerian First Aluminium beats odds to secure 57% rise in profits

The Nigerian roofing sheets manufacturer, First Aluminium plc announced a surge in the profits by 57% in the first half of 2014 despite facing numerous obstacles that are also faced by other members of the industry. The net income for the half year was recorded at N21.32 million from N13.54 million in the same period last year.

The net margin which indicates the efficiency and profitability of a company has risen from 3.3% in half year 2013 to 4.80% but according to the analysts, this rise is low in comparison to other sectors.

The company is suffering from such low margins due to the high rates of import duties as well as high energy costs. Raw materials brought into the company hikes up the cost of production while dependence on a resource as dear as diesel oil also proves to be expensive for the high amounts of energy required for production.

The cost of sales was 3.77 billion for half year 2013 has now risen 6% to 4.017 billion in the same period this year while the cost of sales margin remain stagnated at 90.9%.

China being the aluminium giant too weighs heavily on the Nigerian market as more and more Chinese aluminium imports fills the Nigerian market which makes it difficult for domestic producers to get any sales.

Despite all these hindrances, which has stopped the company from attaining its full potential, it still made a turnover of N4.44 billion in 2014 compared to last year’s N4.11 billion, up by 6%.