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Cement Co. Falls Most in 2 Months on Profit Drop: Lagos Mover

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July 10 (Bloomberg) -- Cement Co. of Northern Nigeria Plc, a producer of the building material, headed for its biggest decline in more than two months after reporting a 48 percent drop in first-quarter profit.

The stock fell the daily limit of 5 percent to 5.70 naira as of 1:55 p.m. in Lagos, the commercial capital, set for the biggest one-day loss since April 25.

Net income for the three months through March retreated to 268 million naira ($1.7 million) from 511.4 million naira a year earlier, the Sokoto, northern Nigeria-based company said in an e-mailed statement today, without giving any reason for the change. Revenue was little changed at 3.1 billion naira.

“A 48 percent fall in first-quarter profit is very serious and that is why the stock has fallen,” Raheem Mohammed, chief operating officer at Kundila Finance Ltd., a Lagos-based brokerage, said by phone today. “Cement is still in demand now, so it’s not as if supply is more than demand.”

Demand for cement in Nigeria is usually highest during the dry season, which lasts from about October through to April.

The company’s location in the north of the country, where Islamic sect Boko Haram is fighting to impose Sharia rule, could have contributed to its profit decline, David Adonri, chief executive officer of Lambeth Trust and Investment Co. said.

“With the insecurity there that is affecting commercial activities, its distribution operations must have been disrupted,” he said.

Cement Co. of Nigeria shares have gained 31 percent this year, compared with a 6.7 percent advance in the Nigerian Stock Exchange All-Share Index.

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To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net