Like-for-like sales of cement at LafargeHolcim’s Middle East Africa business were up 4.2% in 2017. Net sales were up 5.4% in the year, with recurring EBITDA up 3.5% at CHF1.085 billion.
Although positive over all, performance weakened overall. Cement volumes were down 2.6% in 4Q17, while net sales were down 2.3% and recurring EBITDA fell 30.4%.
“Matching the prior-year performance become steadily more difficult over the 12 months,” the company said in its Annual Report 2017, highlighting challenges in Algeria, Egypt, and Nigeria.
“Profitability in Algeria diminished in the second half of the year, on the back of weaker cement demand and a shift from a sold-out to an over-supplied environment,” LafargeHolcim explained. “Competition in Egypt intensified in a macroeconomic environment still affected by currently devaluation and high inflection.”
In Sub-Saharan Africa, ”Nigeria also suffered through a hard economic period for the first three quarters,” added the Switzerland-based company.
In response, the company has responded with initiatives aimed at reducing costs, including increasing the use of alternative fuels and optimising logistics. Several countries in the region have also explored export as a means of offsetting weaker local demand.
LafargeHolcim operates 55.3 million tpy of cement grinding capacity in the Middle East Africa region, including 12.6 million tpy in Algeria, 10.5 million tpy in Nigeria, and 8.9 million tpy in Egypt.
Read the article online at: https://www.worldcement.com/africa-middle-east/26032018/lafargeholcims-middle-east-africa-business-weakens-through-2017/