Lafarge Africa Plc, a leading cement and building solutions provider, yesterday announced a loss of N30.1 billion for the half year ended June 30, 2016, compared with a profit after tax of N27.3billion in the corresponding period of 2014.
Lafarge Africa had early this month sent a profit warning, saying the impact of the Naira devaluation is expected to be a N28billion unrealised exchange loss arising from United States dollar borrowings.
When the company released its unaudited results yesterday, it showed sales of N107 billion in 2016, down from N1152.2 billion in 2015.
The company said industrial operations were significantly impacted by gas supply shortages in the South West & East Nigeria operations with occasional plant repair works. Cost of sales was reduced from N98billion to N92.2billion, while operating expenses declined from N14billion to N12.2billion.
Other income soared by 278 per cent from N7.6billion to N28.5billion. However, net finance cost rose by 158 per cent to N4.6billion, from N1.8billion. Coupled with the exchange loss, the company ended the H1 with a loss of N30.1billion, compared with a profit of N27.3billion in 2015.
Commenting on the results, the Chief Executive Officer, Lafarge Africa Plc, Mr. Michel Puchercos said: “In spite of the macroeconomic challenges and market uncertainties, our company will continue to deliver good performance with significant upsides to come as we conclude on the integration journey to form Lafarge Africa Plc. The new organisation is much stronger and better positioned to deliver operational excellence and improve value to our shareholders.”
The company explained that during the first half of 2016, Lafarge Africa successfully acquired the balance of 50 per cent ownership stake in United Cement Company Limited (Unicem)and this takes shareholding to 100 per cent.
“A N60 billion bond was raised successfully from the debt market, to refinance the Unicem’s Naira denominated debt at a lower interest rate. Given the current exchange rate environment, actions are being implemented to restructure and refinance the USD denominated debt. These loans were largely used to fund the expansion projects which will add an additional 2.5 metric tonnes per annum cement capacity to the current production capacity of UniCem as well as that of the group.
Lafarge Africa said the second half of the year is anticipated to be more rewarding.
“We expect the cement market to be strong mainly driven by the Individual Home Segment with a marginal contribution from the public sector. We expect to benefit from the synergies of our integrated operations, in spite of the gas shortages. Our objective is to deliver innovative and good quality building solutions to meet the specific needs of our customers, while also achieving good value creation