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Lafarge Africa results

Published by , Assistant Editor
World Cement,

Lafarge Africa Plc. Has achieved growth in its operations, as shown by its full 2015 results which surmounted economic headwinds to declare 300 000 per share divident to shareholders in Nigeria. The company's revenue grew by 2.5% against previous year's, reaching N267 billion in a challenging market. Strong cash flow amounting to N57.9 billion was also generated for the 12 months period ended 31st December 2015.

In the report presented at the company's Annual General Meeting (AGM) held at Eko Hotel, Lagos on Monday 27th June 2016, South West operations grew by 8% behind a number of initiatives such as the Key Distribution Scheme, a strong route to market and solid capacity utilisation. ReadyMix Nigeria also continued its strong growth with a 29.3% growth in its turnover over prior year.

Shareholders approved the sum of N248, 403, 876 to be capitalised from the Share Premium into 496 807 752 Ordinary Shares of 50 kobo each as proposed by the Board of Directors at the 57th AGM of the Company. Lafarge Africa announced that Shareholders are to receive a dividend of 300 kobo per share and in addition to the dividend, a bonus issue of one new share for every 10 shares previously held.

Lafarge Africa Plc strengthened its foundation further by increasing its shareholding in Mfamosing operations from 35% to 50%, with full management control and consolidation, even as an approval to increase this to 100% has been secured from the Security Exchange Commission. Similarly, the shareholding in Ashakacem Plc. also increased from 58.61% to 82.46% in the year.

The Group Managing Director/CEO, Mr. Michel Puchercos stated that "the Nigerian operations of Lafarge Africa having been successfully unified and rationalized under one management team, is cognizant of the different stakeholders expectations and promise to drive efficiencies that will ultimately generate remarkable synergy savings for overall improved performance.

Puchercos disclosed that "overall, new strategies in penetrating retail, new geographies and the technical segment are expected to push Lafarge Africa's volumes to grow above a flat market in all three product lines."

Though South African market will remain challenging in 2016, the company plans to leverage the 2015 investments within the cement operations with a revamped sales team and route to market, specifically in aggregates, the company is set to continue benefitting from its strong network delivering results with two new quarries, being opened in the Gauteng market and Ready-Mix growth.

In his remarks, Mr. Mobolaji Balogun, Chairman, Board of Directors, Lafarge Africa Plc noted that 2015 was transformational and the first full operational year of the new enlarged Company declaring that "we have now built a significant platform to drive value creation for all stakeholders and in particular, our shareholders. I thank our shareholders and my colleagues on the Board of Directors for their support and commitment that ensured that we were able to carry out these strategic initiatives".

Commenting on the company's future outlook, Mr. Balogun foresaw growth opportunities in 2016 and beyond for the building material sector. "The 2016 Federal Government budget indicates a significant increase in the spending on infrastructure and capital projects. The Government recognises the urgent need to re-invest in Nigerian infrastructure to catalyse much needed growth. With the on-going 2.5 million t expansion project in Calabar, which is expected to be commissioned before year end, and plans for Ashaka, our cement production capacity in Nigeria is on the increase" he stated.

The Chairman reported that the company continued to build on the successful completion of the Lafarge Africa asset consolidation through some strategic initiatives, including increasing its shareholding in Ashakacem to 82.46% via a Mandatory Tender Offer and acquisition of further stake in Unicem. He enjoined the shareholders to support the on-going Ashakacem Voluntary Tender Offer which according to him, provides opportunity for the minorities to participate in a much larger growth platform, which Lafarge Africa represents.

In simple terms, the offer creates the immediate and direct advantage of moving from investors in AshakaCem with 1million tpa cement production capacity to Lafarge Africa with 12 million tpa and an additional 2.5 million tpa due for commissioning by the end of 2016. The consideration offered for the tender is quite favourable to shareholders of AshakaCem," he explained.

Adapted from press release by

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