Lafarge Africa declares N9.1bn H1 PAT, reveals near term growth strategy

Lafarge Africa Plc, a member of the LafargeHolcim Group, has declared a net Profit After Tax (PAT) of N9.1 billion for the half year period of 2019 ended June 30.

This restores the building materials manufacturer to a positive territory when compared against a loss of N3.9 billion recorded in the same period of 2018, the company indicated in a statement made available to business a.m.

According to the company, its half year results also showed a marginal decline in net sales which closed at N160.3 billion in comparison with N162.3 billion reported a year ago.

The Company’s operating profit for the review period increased by 37 percent from N16.3 billion to N22.4 billion in June 2018, while Cement sales volume per kilo tonnes improved 3.2 percent to N3.3 billion.

The statement reflected that the company reduced its net financial debt by 19.2 percent from N255.8 billion to N206.6 billion in the review period.
The decrease was mainly driven by the repayment of its short-term loans and overdraft from the proceeds of the rights issue which was successfully completed on March 8, 2019, the company’s statement revealed.

In the statement, Michel Pucheros,CEO of Lafarge Africa, said a sound implementation of the company’s growth strategy delivered expected results.

He said, “Our Strategy 2022 « building for growth » in Nigeria is delivering the expected results with strong volume growth, considerable EBITDA improvement, robust net income and operating cash flow development.

Pucheros disclosed that the company continued to deliver strong margins as a result of a turnaround and cost reduction strategy in Q2 with improvement in its commercial transformation, logistics performance, and industrial and energy efficiencies.

He said the company aspires to continue the acceleration of growth and earnings in 2019, as it’s South African subsidiary continued the turnaround plan with significant EBITDA and operating profit improvement in the second quarter of 2019 compared to prior year.”

To solidify growth trajectory for the future, the company said it has begun improving and unifying it’s business processes and logistics across the country.

According to the firm, this has made business simpler and has given access to data that will help improve speed to market in 2019 and beyond.

“Our successful Go-live on SAP will be a strong enabler to our 2019 performance,” the company stated.

The eventual divestment of its South African Operations expected in Q3 2019, coupled with its recent rights issue fully subscribed for is expected to boost its financial strength, the company said.

“The south African divestment will significantly de-leverage Lafarge Africa Plc by c.N239bn. This will strengthen the Company’s balance sheet while significantly reducing financing costs.”

Also to impact positively in future results, lafarge Africa says it’s leadership team is fully established and empowered to deliver results.

“A simplified performance management system and incentive system is being implemented. We are building local capabilities for improved efficiency and performance in 2019,” Lafarge noted.