Greater earning opportunities may have opened for Lafarge Africa Plc, as the company has commenced export to Ghana, breaking new grounds, while also enhancing Africa’s environment as well as creating more value for investors.
This was coming as the company’s third quarter result for the period ended 30th September, 2017 showed sustained exploitation of earning opportunities, enhanced sales, increased earnings, and managed operating expenses.
Lafarge Africa Plc, is a leading sub-Saharan Africa building Materials Company; it is a subsidiary of LafargeHolcim, a world leader in building materials. Listed on the Nigerian Stock Exchange with presence in Africa’s two largest economies, Nigeria and South Africa, Lafarge Africa is actively participating in the urbanization and economic growth of Africa.
According to the company’s Q3 result released by the Nigerian Stock Exchange (NSE) at the close of trade Friday, sales recorded by the building solutions company, grew in the third quarter and 9-month period by 39 and 28 per cent, respectively.
The company attributed the growth recorded in its latest financial results to partly, the export of cement to Ghana.
The company further revealed that stability of products’ price, fuel flexibility and, better logistics and commercial performance enhanced its Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) by four times to ₦41.7billion with margins stable at 30 per cent.
CEO of Lafarge Africa, Michel Puchercos, said: “Our Company continues to recover since we implemented the turnaround plan in September 2016 and have delivered a good performance even in a challenging market. As of September 2017, the cement demand in Nigeria was significantly lower than prior year.
Nevertheless, operating EBITDA for our Nigeria operations was up 4.0x at ₦41.7 billion and EBITDA margin stood at 30% thanks to stable pricing environment, steady industrial operations, fuel flexibility, execution of our commercial and logistics performance improvement plan. We shipped the first batch of cement to the Ghana market, which was well accepted”
He added that even as South Africa exited recession in second quarter 2017, yet operations were impacted in the quarter the quarter by industrial challenges at the Lichtenburg plant.
“The South African economy exited a recession in second quarter 2017, supported by secondary and tertiary sectors. Cement revenue was up 30% supported by stable pricing and the strengthening of the Rand against the Naira. However, operations were impacted in the quarter by industrial challenges at the Lichtenburg plant.”
Overall cement demand in Nigeria is expected to close the year lower than the prior year, on account of the economic slowdown in the first half 2017. In South Africa, the environment gradually recovers from a recession, but the challenges of cement overcapacity persist. In this context, aggregate and concrete operations will support business performance.
Lafarge Africa’s CEO maintained that “our EBITDA margin expectations in Nigeria for 2017 remains strong at the mid-30s, as we strengthen the performance on the basis of a robust route to market, efficient logistics operation, and cost optimization programme through fuel flexibility, reduction of FX exposure and administrative cost optimization.
He assured that the company’s South African operations would benefit from the aggregate and concrete business, as its cement operations stabilizes.
Lafarge Africa remains committed to delivering strong performance and create value for our Shareholders in 2017,” Puchercos said.