Lafarge Africa Plc has reported its 12 month 2016 results progress with its turnaround plan. All its plants are operating at optimum levels, with a significant increase in profit after tax in 4Q16. Net sales and operating EBITDA also increased respectively by 12% and by 288% in 4Q16.
Lafarge Africa achieved record fuel flexibility at its Ewekoro I ad Sagamu plants, amid country-wide gas shortages in Nigeria. All plants are operating at optimal levels, with CAPEX provisions for 2017 aiming to consolidate energy optimisation at Ashaka, Ewekoro 2 and Mfamosing. The Mfamosing 2 line came on stream on time and below budget and contributed to Group cement production in 4Q16. Cost savings are expected in the future.
The third-party syndicated loan of US$88.4 million was prepaid in 4Q16, through a loan refinancing arrangement with LafargeHolcim Group. This intercompany loan was hedged through a Non-Deliverable Futures transaction. As a consequence, US$581 million debt was restructured, which removed the FX impact on Lafarge Africa’s results. New debt was reduced to N108.3 billion, below the N120 billion announced, notably supported by CAPEX control and solid cash flows.
Operating EBITDA for FY16 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 FY16 came to N16.9 billion.
Commenting on the company’s 2016 performance, Michel Puchercos, CEO of Lafarge Africa 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 optimization plan has proved successful with increased use of Alternative Fuel (AF) to offset gas shortages. Ewekoro 1 plant migrated from 100% reliance on gas and LPFO to about 40% 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 remarked that “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.”
For 2017, Lafarge Africa expects to return operating EBITDA margin back to historic levels.
Read the article online at: https://www.worldcement.com/africa-middle-east/23032017/lafarge-africa-reports-progress-with-its-turnaround-plan/