Key Highlights for the period:
·Revenue at N107 Billion with a cash generation of N20 Billion
·United Cement of Nigeria Ltd (UNICEM) now 100 percent owned by Lafarge Africa Plc
·N60 Billion Bond Issuance successful and funds fully utilized to refinance Unicem’s third party Naira debt
Lafarge Africa Plc, the cement and building solutions provider, recorded sales of N107 Billion in the first half of 2016.
Industrial operations were significantly impacted by gas supply shortages in the South West and East Nigeria operations with occasional plant repair works. As a result, EBITDA stood at N12 Billion, as against N48 Billion in H1 2015.
During the first half of 2016, Lafarge Africa successfully acquired the balance of 50 percent ownership stake in UNICEM and this takes shareholding to 100 percent.
A N60 Billion bond was raised successfully from the debt market, to refinance the UNICEM’s Naira denominated debt at a lower interest rate. Given the current exchange rate environment, Lafarge says’ actions are being implemented to restructure and refinance the USD denominated debt.
The loans were largely used to fund the expansion projects which will add an additional 2.5MTpa cement capacity to the current production capacity of UniCem as well as that of the Group.
“We are at the final stages of concluding the voluntary tender offer issued to increase our shares in Ashakacem from 82.46 percent presently. The shares acquisition is expected to conclude before the end of the year,” Lafarge said in a statement, following release of the results.
The South African cement operations reported solid volume growth, with cement sales volume growing by 8 percent vs. H1 2015, and a steady aggregates volume in H1 2016. Overall sales was stable vs. H1 2015, reflecting the impact of the competitive pricing environment.
Commenting on the results, the CEO, Lafarge Africa Plc, Michel Puchercos said ‘“in spite of the macroeconomic challenges and market uncertainties, our company will continue to deliver good performance with significant upsides to come as we conclude on the integration journey to form Lafarge Africa Plc. The new organisation is much stronger and better positioned to deliver operational excellence and improve value to our shareholders.”
Lafarge says the second half of the year is anticipated to be more rewarding for the firm and shareholders.
It expects the cement market to be strong mainly driven by the Individual Home Segment with a marginal contribution from the public sector.
The cement maker also expects to benefit from the synergies of its integrated operations, in spite of the gas shortages and the objective is to deliver innovative and good quality building solutions to meet the specific needs of customers, while also achieving good value creation for shareholders.
The South African market will remain challenging, but with the reinforced sales team and route to market strategies, financial performance is expected to improve. In aggregates and concrete, the company will continue to benefit from its strong network to drive business growth.
The new line at East Nigeria (Mfamosing plant) is to be commissioned in the 4th quarter of 2016; other existing plants are now fully operational with the exception of the gas supply limitations.
The possibility of operating more plants on alternative fuels are being fully explored and on the fast-track.
Lafarge also expects that its Ready Mix business will continue to secure high quality contracts to deliver strong performance in the second half of the year.
Lafarge Africa Plc, a major Sub-Saharan Africa building materials company is a subsidiary of LafargeHolcim, a world leader in building materials.
Listed on the Nigerian Stock Exchange with a presence in Africa’s two largest economies, Nigeria and South Africa, Lafarge Africa is actively participating in the urbanization and economic growth of Africa.
Combining its operations in Nigeria – Ewekoro and Sagamu plants in Ogun State, Ashakacem in Gombe State, Mfamosing in Cross Rivers State, Atlas cement in Rivers State and Ready-Mix Nigeria with its varied operations in South Africa, Lafarge Africa has a current installed cement capacity of 12Mtpa, which is expected to grow to 17.5Mtpa by 2017.
This is in addition to strong market leading positions in Aggregates, Ready mix concrete and Fly Ash.
Source : BusinessDay