- 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.