Lafarge Africa reports N5.2bn profit



Lafarge Africa Plc, a leading Sub-Saharan Africa building materials company and a subsidiary of LafargeHolcim, has recorded profit after tax of N5.2 billion for the first quarter ended March 30, 2017.

In its financial statement submitted to the Nigerian Stock Exchange (NSE) Monday, Lafarge Africa announced that the company’s profit after tax increased from N1.9 billion loss recorded in the first quarter of 2016 to N5.2 billion in 2017, just as the net sales improved by 55 per cent from N52.4 billion in first quarter of 2016 to N81.3 in first quarter of 2017.

The Chief Executive Officer, Lafarge Africa, Michel Puchercos, said, “Our turnaround plan continued to deliver strong results in Q1 2017, in spite of the challenging environment in Nigeria & South Africa. In Nigeria, domestic cement volume improved by six per cent compared to last quarter, thanks to seasonality, however the market declined compared to last year due to the recession that started in Q2 2016.

“Our commercial transformation contributed to improved performance and sustained market share, the logistics & industrial improvement plan delivered the expected benefits and our energy optimization strategy (AF & coal substitution) achieved record performance, mitigating gas shortages at low cost.

“EBITDA margin reached 30 per cent during the quarter in Nigeria. In South Africa, the activities were affected by lower volumes in the cement division, despite the price increase from last year. The company continues to focus on cost optimisation, to restore profitability.

“Overall, we are on track to deliver our ambition for 2017 and maintain our outlook for the cement demand growth of zero per cent to two per cent for Nigeria.

“During the quarter, we made progress with our investment for the Ashaka CPP, initial work for our AF and coal development and completion of the Mfamosing line II. In total capital expenditure in the quarter reached N9.1 Billion. Our main divestment relates to the disposal of the Elephant Cement House to the Lagos State Government for N3.1 billion, generating a capital gain of N1.2 billion.”

On net debt, he said, “ Our Net debt remained stable at to N107 billion, thanks to the contribution of our operation.”

Speaking about the company’s future outlook, he said “In spite of the overall decline in cement market in the quarter, we expect a gradual recovery of the economy, during the second half of the year. We maintain our outlook on the cement market in Nigeria to grow between zero per cent to two per cent.

“Lafarge Africa is well positioned to benefit from expected upturn in the market. Our business turnaround plan will further be consolidated, through local sourcing, fuel flexibility, stable industrial operations, logistics & commercial optimisation initiatives.

“On the other hand, the South African environment is expected to remain challenging and we retain our expectation of a flat to declining market. However, the commissioning of the new grinding line at the plant, our cost containment and commercial excellence programs should cushion the impact of the declining economic environment on our performance.”