Lafarge Africa posts turnover of N299.2bn in 2017, declares N1.50 dividend per share

Lafarge Africa Plc, on Monday, declared a turnover of N299.2 billion on a loss, after tax of N34 billion for the financial year ended December 31, 2017.
The company’s turnover grew by 36 per cent when compared to N219.7 billion achieved in the comparative period of 2016.
The company’s audited result released by the Nigerian Stock Exchange (NSE) showed that loss before tax stood at N34 billion as against N22.8 billion posted in 2016.
The company recorded a loss after tax of N34.6 compared to a profit after tax of N16.9 billion declared in the corresponding period of 2016.
Its gross profit stood at N50.8 billion in contrast with N40.7 billion in the previous year.
Cost of goods rose to N248.4 billion as against N179.1 billion in the comparative period of 2016.
Notwithstanding, the company declared a final dividend of N1.50 per share which translates to a dividend yield of 3.4 per cent based on the last closing price.
Commenting on the performance, Mr Michel Puchercos, the company’s Chief Executive Officer, said that Lafarge Africa’s industrial operations in 2017 were stable with plants operating at high reliability levels.
Puchercos said that key projects in Nigeria such as road construction in Calabar and mothballed assets in South Africa led to an impairment of N19.1 billion.
“The combination of these impairment and the net loss in South Africa of N18 .7 billion led to a group net loss of N34.6 billion compared to a profit of N16.8 billion in 2016,’’ he said.
Puchercos said that South Africa business thrived in a challenging business environment, noting that operations would stabilise in 2018.
“For South Africa, the economy is expected to grow by three per cent in 2018.’’
“The turnaround plan of the South African operations is focused on cost containment, commercial transformation and industrial stabilsation. The overall goal is to create value for shareholders through an attractive growth profile and good margins.
In 2017, our objective was to optimise our ownership and financing structure.
The simplification of our ownership structure was achieved through the delisting of AshakaCem and subsequently a scheme of the re-organisation of capital which enabled minority shareholders to exchange their shares for Lafarge Africa shares.
This was successfully closed in Q4 2017. Lafarge Africa now owns 100 per cent of the shares of AshakaCem.
UniCem and Atlas were also merged into Lafarge Africa in Q4 2017, for optimal benefit of the fiscal attributes of merging entities,’’ he said.
Puchercos said that the company successfully raised N131 billion by way of rights issue, the largest rights issue by size raised in Nigeria so far.
He said that minority participation was in the 50s, while LafargeHolcim subscribed to the un-allotted portion.
“This brings the ownership of Lafarge Holcim to 76.32 per cent from 71.35 per cent prior to the rights issue.
He said that energy optimisation plan for the company had been successful with increased use of alternative fuel and coal to offset gas shortages in operations in the West.
Puchercos said that plant operations in the eastern and northern part of the country relied mainly on gas and coal.
However, researchers at CardinalStone believed that these impairment charges were one-off, and as such do not envisage a recurrence of these costs going into 2018 full year.
“A closer look at the impairment charges showed that N12.4 billion was expended on the construction of Mfamsoing evacuation road at UNICEM in Calabar, while N3.3 billion was booked for the Kiln Preheater project in AshakaCem – projects which the management has resolved to discontinue.
“We believe that these impairment charges are one-off, and as such do not envisage a recurrence of these costs going into FY’18,’’ they said.