Despite ‘forex hit’, Lafarge’s revenue up 2%

Lafarge Africa Plc, a leading cement and building company, says it recorded a 2% increase in revenue despite the current foreign exchange challenges.

The company said its revenue reached N267 billion “in a challenging transitional market”.

“Group after tax profit declined by 20% versus last year, when taking into account the one-off restructuring costs and the unrealized exchange impact on the Mfamosing operations foreign currency borrowings from the parent group, LafargeHolcim, the world’s largest building materials company,” the company said in a statement.

“The one-off impact of the adjustment to the naira value of the foreign currency borrowing, due to the deterioration in the naira exchange rate, is to a large extent an accounting exercise as Lafarge Africa PLC is not foreseen to repay the shareholder loans in the foreseeable future, which makes up the majority of the foreign currency borrowing.

“Excluding these one-off/none operational impacts, profit improved by 6% versus last year behind the strong underlying fundamentals of Lafarge Africa Plc’s operations. Cash flow from operations was robust at N57.9 billion.”

Peter Hoddinott, CEO, Lafarge Africa Plc., who spoke on the results, said the company “continues to deliver good performance with significant upsides to come as new cement and power generation capacities come on stream and synergy benefits from the merger in Nigeria flow through.

“Our business integration process has been successful and as a Company we are optimistic to deliver improving performances in 2016 and beyond, improving value to our shareholders.”

Lafarge Africa told shareholders that it had strengthened its foundation further by increasing its shareholding in Mfamosing operations from 35% to 50%, with full management control and consolidation.

“Similarly, the shareholding in Ashakacem Plc. also increased from 58.61% to 82.46% in the year,” the company said foreseeing a unique 2016.

“The overall Nigerian cement market is foreseen to grow robustly in 2016 behind a strong Individual Home Building Segment.

“The Federal Government of Nigeria has also shown strong indications to support Infrastructure growth in the coming year.

“Lafarge Africa will be able to leverage its unique footprint in 2016 with Ashaka returning to growth, ReadyMix securing high volume contracts to support its 8 existing, and new plants to be commissioned as well as the new 2.5 million tons cement line due to be commissioned in Mfamosing in H2.”