- Lafarge Africa Grows H1 Turnover to N162b
Lafarge Africa Plc grew its top-line by 11 per cent to N162 billion in the first half of this year as a strong performance in the group’s Nigerian operation mitigated drawback from South African operations.
Key extracts from the interim report and accounts for the six-month period ended June 30, 2018 showed that group turnover rose from N154.81 billion in first half 2017 to N162.29 billion in first half 2018. Gross profit and operating profit stood at N38.96 billion and N16.34 billion in 2018.
The board of Lafarge Africa has also approved the extension of existing shareholder loan and a right issue of up to N90 billion, as part of efforts to reduce the company’s leverage position as well as strengthen its profitability.
The company’s Chief Executive Officer, Mr. Michel Puchercos, said the group continued to deliver strong margins in its Nigerian business as a result of its commercial and energy strategies.
He noted that the group performance was adversely impacted by timing of inventory movements and performance of its South African business.
According to him, Lafarge Africa’s commercial, logistic and industrial operations in second quarter of 2018 continued to improve strongly despite inflation and foreign exchange impacts.
“We continued to deliver on our energy improvement plan, with notable increased use of alternative fuel and coal. Our logistics and commercial initiatives such as improved product visibility and fast tracking of the new route to market also contributed to the strong performance in the second quarter,” Puchercos said.
He added that the group is focused on executing its turnaround plan and improvement of margins in its South African operations.
“Full year outlook for the cement market in Nigeria remains favourable with positive signs of recovery since March. Lafarge Africa Plc’s business turnaround actions will continue to deliver in 2018 through energy optimization as well as commercial and logistic improvement,” Puchercos said.
He noted that as the South African economy is expected to grow in 2018, the turnaround plan of the South African operations is focused on cost containment, commercial transformation and industrial stabilisation. Further analysis of the results showed that the group recorded net loss of N3.90 billion in first half 2018 as against net profit of N19.73 billion in first half 2017, largely due to the decline in the South African business.
“The overall goal is to create shareholder value by returning the South African business to profitability through improved margins,” Puchercos said.
Nigeria Takes Bold Step to Energize Oil Sector: Plans to Revoke Dormant Exploration Leases
The Nigerian Upstream Petroleum and Regulatory Commission (NUPRC) has announced that the Federal Government is considering revoking inactive oil exploration leases granted to companies unable to conduct exploration activities.
Gbenga Komolafe, CEO of NUPRC, conveyed that only companies demonstrating robust technical and financial capabilities would retain their leases under the guidelines of the Petroleum Industry Act (PIA).
“Based on PIA, the commission is focused on delivering value for the nation, so only firms that are technically and financially viable will keep their leases,” affirmed Komolafe in a statement to Reuters.
He outlined that the commission plans to review existing leases, and the allocation of new leases will be contingent upon specific terms and conditions.
Current data from NUPRC reveals that over 60% of prospecting licenses, comprising 53 exploration leases issued since 2003, have expired. Of these, 33 licenses, including four entangled in contract disputes, have not been renewed.
While automatic revocation has not been exercised, the regulator signals a departure from allowing companies to indefinitely retain leases without meaningful exploration activities.
The enactment of the PIA in 2021 empowers the regulator to assess the technical and financial capabilities of companies holding oil exploration leases.
The Nigerian oil and gas sector has faced challenges, witnessing dwindling investments as major players exit onshore and shallow water assets due to security concerns, infrastructure sabotage, and legal disputes in the Niger Delta.
The proposed move aims to incentivize active exploration, addressing the sector’s stagnation and fostering renewed investor confidence.
Nigeria Eyes Oil Production Surpassing OPEC Quota Amidst Positive Projections and Global Collaborations
In a strategic move to exceed the OPEC-imposed oil production quotas, Nigeria, led by the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, is on a trajectory to outperform expectations.
The recent 36th OPEC and non-OPEC ministerial meeting projected Nigeria’s oil production quota at 1.5 million barrels per day (bpd) in 2024.
However, Lokpobiri revealed in a Twitter post that Nigeria currently produces 1.5 million bpd for crude and 300,000 bpd for condensate.
Addressing concerns about Nigeria’s ability to meet these targets, Lokpobiri assured, “What we are producing is much more than what is projected in the 2024 budget estimate.”
Despite discrepancies between OPEC’s projections and Nigeria’s budget estimates, the minister expressed confidence that the country would surpass the outlined targets.
Furthermore, to fortify Nigeria’s position in the global energy landscape, Lokpobiri engaged in a pivotal meeting with Baker Hughes Chairman, Lorenzo Simonelli, on the sidelines of the ongoing 28th United Nations Climate Change Conference (COP28).
Baker Hughes, a global energy technology company, expressed keen interest in sustaining and enhancing its investment in Nigeria’s oil and gas industry. Simonelli emphasized the company’s commitment to contributing to Nigeria’s energy transformation agenda and collaborating on sustainable energy practices.
Lokpobiri commended Baker Hughes for its longstanding partnership with Nigeria and affirmed the government’s commitment to creating an enabling environment for investments in the refinery sector.
The meeting set the stage for a promising collaboration that aligns with Nigeria’s objectives and contributes to global sustainable energy goals.
Oil Prices Face Downward Pressure Amid OPEC+ Uncertainty and Middle East Tensions
Oil prices find themselves caught in the crossfire of geopolitical tensions and the aftermath of the recent OPEC+ decision on Monday.
Brent crude oil, against which Nigeran oil is priced, shed 0.9% or 73 cents settled at $78.15 per barrel at about 7 am Nigerian time while the U.S. West Texas Intermediate crude oil experienced an 0.8% decline or 64 cents to $73.43 a barrel.
“Crude seems to be under continued pressure from the OPEC+ decision. Some degree of discounting of the deeper OPEC+ cuts is justified, but as of now, the crude complex has completely disregarded them,” stated Vandana Hari, the founder of Vanda Insights, an oil market analysis provider.
Last week, oil prices suffered a slump of over 2%, fueled by investor skepticism regarding the depth of supply cuts committed to by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+.
Lingering concerns about sluggish global manufacturing activity added to the pessimism.
The OPEC+ cuts, declared as voluntary on Thursday, have raised doubts about the full implementation of the proposed reductions and left investors questioning the metrics for measurement.
As the global focus shifts to the Middle East, geopolitical tensions resurface with renewed hostilities in Gaza.
Against this backdrop, three commercial vessels faced attacks in international waters in the southern Red Sea, leading to heightened concerns over potential supply disruptions.
While the resumption of the Israel-Hamas conflict injected a bullish momentum into oil prices, analysts, including CMC Markets’ Tina Teng, remain cautious.
“However, oil prices may continue to be under pressure for the time being due to China’s disappointing economic recovery and the ramp-up of U.S. production”, Teng stated.
Amid this intricate web of challenges, the specter of additional sanctions on Russia and a potential pause in sanctions relief for OPEC member Venezuela by the White House further add layers of complexity to the already delicate global oil market.
As the world watches, uncertainties persist, shaping the future trajectory of oil prices in an intricate dance of geopolitics and market dynamics.
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