Lafarge Africa Plc, one of the leading cement and building solutions providers in Nigeria, yesterday reported a profit after tax (PAT) of N16.898 billion for the year ended December 31, 2016, showing a decline of 38 per cent compared with N27.163 billion in 2015.
According to the audited results, Lafarge Africa Plc recorded revenue of N219.714 billion, compared with 267.234 billion in 2015. Loss before tax stood at N22.818 billion, compared with a profit before tax of N29.286 billion. However, a N39.717 billion tax credit, which came mainly from deferred tax assets generated from Unicem operations, lifted the company’s PAT to N16.898 billion.
The board has recommended a dividend of 105 kobo, which is 65 per cent lower than 300 kobo the company declared in 2015.
Commenting on the performance, the Chief Executive Officer, Lafarge Africa, Michel Puchercos, said: “Our turnaround plan delivered solid results in fourth quarter (Q4) 2016 in spite of the challenging environment in Nigeria and South Africa. Technical challenges have been resolved with all our plants operating at high reliability. Our energy optimisation plan has proved successful with increased use of alternative fuel (AF) to offset gas shortages. Ewekoro 1 plant migrated from 100 per cent reliance on gas and LPFO to about 40 per cent use of AF at the plant. Logistics and commercial turnaround plans are in place and enabling to restore market share.”
According to Puchercos, Mfamosing line 2 was delivered ahead of time and above specification, and is now fully operational.
“The new Line contributed 338kt in Q4 2016 to cement production volume and is expected to deliver significant cost savings going forward. Our immediate objective is to deliver fully on our turnaround plan by optimizing our processes, developing our alternative fuel strategy, reducing operational costs to deliver strong EBITDA margins returning to historic levels,” he said.
The company explained that in Q4, the third-party syndicated loan of $88.4 million was pre-paid, through a loan refinancing arrangement with LafargeHolcim Group. This inter-company loan was hedged through a non-deliverable futures (NDF) transaction. “Consequently, overall $581 million debt was restructured, which removed the FX impact on Lafarge Africa’s results. Net debt was reduced to N108.3 billion, below the N120 billion announced notably supported by capex control and solid cash flows,” the company said.
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