Lafarge Africa Expects Poor Q2 Performance | Independent Newspapers Limited
Newsletter subscribe


Lafarge Africa Expects Poor Q2 Performance

Posted: Jul 11, 2016 at 6:46 pm   /   by   /   comments (0)

The board of Lafarge Africa has envisaged dwindling in its expected second quarter result for the 2016.

The company in the profit warning sent to the Nigerian Stock Exchange in Lagos on Friday signed by the Company Secretary, Uzoma Uja said that its 2016 second quarter results are expected to be affected by the impact of the naira devaluation against United States Dollar resulting in an unrealistic exchange rate loss.

According to the announcement which based on the unaudited financial statements for the period ended 30th June 2016, Uja said the current gas supply shortage is also expected to impact volumes for this quarter.

“The impact of the Naira devaluation is expected to be a N28 billion unrealistic exchange loss arising from USD borrowings, which at the limit of the devaluation consisted of $310 million shareholders loans and $85 million external loans. These loans relate to United Cement Company of Nigeria Limited (Unicem) and were mainly set up prior to the acquisition by Lafarge Africa of its original 35 per cent stake in Unicem Lafarge Africa has since then increased its stake in Unicem and held at the time of the devaluation, 50 per cent of Unicem, which was fully consolidated.”

Uja further that, the Lafarge Africa Plc now holds 100 per cent of Unicem. The N28 billion unrealised exchange loss will have no immediate impact on cash flow.

Lafarge Africa Plc is very positive about the future outlook for Unicem, which is strategically located in Mfamosing, Calabash, in Cross River State and is a major cement plant in the South-South and South-East Region of Nigeria. The plant has a cement capacity of 2.5mm tonnes and will double capacity with the commissioning of a 2.5m tonnes line during the second half of 2016, Uja stated.

Lafarge Africa recently concluded the issuance of a N60 billion bond, to refinance Unicem’s naira debt. The company is assessing refinancing part of the USD debt.

The board is confident that the various initiatives put in place by management will provide an improved future performance of Lafarge Africa Plc.