Lafarge Africa Plc reduces debt to N108.3bn, proposes 105 kobo dividend per share

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8 years ago

LAFARGE Africa Plc has reported in its full year 2016 results progress with its turnaround plan, with a significant increase in profit after tax in Q4 2016. Net sales and operating EBITDA also increased respectively by 12 per cent and by 288 per cent in Q4 2016.

In the quarter, the third-party syndicated loan of 88.4 million USD 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 USD 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.

Commenting on the company’s 2016 performance, Michel Puchercos, CEO of Lafarge Africa said the 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 optimization 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”.

Speaking further, he stated “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”.

Looking ahead, the CEO however noted that the company’s immediate objective was to deliver fully on our turnaround plan by optimizing our processes, developing our alternative fuel strategy, reducing operational costs to deliver strong EBITDA margins returning to historic levels.

In the quarter, a tax credit of N39.7 billion was reported mainly resulting from deferred tax assets generated from Unicem operations. This contributed significantly to profitability in Q4 and for the full year 2016.

The Company proposed a dividend of 105 kobo, for approval at the Annual General Meeting scheduled for June 7th 2017.