Lafarge Africa Plc, has proposed a dividend of 105 kobo, for approval at the annual general meeting scheduled for June 7th 2017.
As contained in its 2016 financial year report, the company has progressed with its turnaround plan as its plants are operating at optimal levels, with a significant increase in profit after tax in the last quarter of 2016.
Accompanying the progress recorded in the financial year is the cement company’s net sales and operating Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) increasing respectively by 12 per cent and by 288 per cent in the last quarter of 2016.
Despite the nation-wide gas shortages that characterised year 2016 in the country, the cement company braced the odds and recorded level fuel flexibility at its Ewekoro I plant and Sagamu plants.
As conveyed by a statement released on Wednesday, by the communications and corporate affairs department of the company, “all plants are operating at optimal levels with capex provisions for 2017 aimed to consolidate energy optimisation at Ashaka, Ewekoro 2 and Mfamosing.” It added that “The Mfamosing 2 line, which came on stream, on time and below budget, contributed to Group cement production in Q4 2016 with cost savings expected in the future.”
The statement added that “in the quarter, the third-party syndicated loan of $88.4 million was pre-paid, through a loan refinancing arrangement with LafargeHolcim Group. This inter-company loan was hedged through a Non-Deliverable Futures (NDF) transaction.
“Consequently, overall $581 million debt was restructured, which removed the FX impact on Lafarge Africa’s results. Net debt was reduced to N108.3 billion, below the N120 billion announced notably supported by capex control and solid cash flows.”
Operating EBITDA for FY 2016 reached N29.0 billion from N67.3 billion in 2015, on operational challenges in the first part of the year, while Profit after tax for 2016 financial year came to N16.9billion.
In his reaction to the company’s performance in the financial year under review, Michel Puchercos, the Chief Executive Officer of the company said: “Our turnaround plan delivered solid results in Q4 2016 in spite of the challenging environment in Nigeria and South Africa. Technical challenges have been resolved with all our plants operating at high reliability.
“Our energy optimisation plan has proved successful with increased use of Alternative Fuel (AF) to offset gas shortages. Ewekoro 1 plant migrated from 100 per cent reliance on gas and LPFO to about 40 per cent use of alternative fuels at the plant. Logistics and commercial turnaround plans are in place and enabling to restore market share”.
“Mfamosing line 2 was delivered ahead of time and above specification, and is now fully operational. The new Line contributed 338kt in Q4 2016 to cement production volume and is expected to deliver significant cost savings going forward”.
“Our immediate objective is to deliver fully on our turnaround plan by optimising our processes, developing our alternative fuel strategy, reducing operational costs to deliver strong EBITDA margins returning to historic levels.”
What significantly contributed to the company’s profitability in the last quarter of 2016 and for the full year was the tax credit of N39.7 billion from deferred tax assets generated from Unicem operations.
Source : Independent