Lafarge Holcim (parent company of Lafarge Africa) is addressing operational issues in its Middle East and African units. Chief Executive Officer (CEO) of the firm, Jan Jenisch disclosed this during an interview with Reuters.
“Operational issues in some markets have been addressed and we expect to deliver increasing margins as we capture the upward trend in demand through the second half of 2018,”
Lafarge Africa comprises of operations in Nigeria and South Africa.
Reasons for the rough patch
Lafarge Africa (formerly known as WAPCO) has been weighed down in the last few years by both macroeconomic and company-specific issues.
A foreign exchange crisis in 2016 resulted in the company taking a loan from its parent company, which it repaid with proceeds of a N131 billion rights issue held last year. The company was also saddled with loans following its merger with Holcim’s South African operations.
The company made a loss in 2017 as well as the half year ended June 2018.
Results for the half year ended June 2018 show revenue increased from N154.84 billion in 2017 to N162.89 billion in 2018. The company made a loss before tax of N6.35 billion as against a profit before tax of N18.16 billion recorded in as against same period in 2017.
Loss after tax stood at ₦3.9 billion as against profit after tax of ₦19.7 billion recorded in H1 2017.
Chairman of Lafarge Africa, Bolaji Balogun, in May revealed the company planned to expand its plants once it had paid down its debt. Current capacity is about 10.5 million tonnes.
The company this week disclosed its intentions to raise about N90 billion through a rights issue to restructure its debt.
Competitors BUA Cement and Dangote Cement have already begun moves to expand production. BUA this year completed a 1.5 million tonnes expansion of its Kalambaina Cement plant in Sokoto and expects the combined production capacity of all its plants to hit 8 million tonnes by year-end.
Lafarge Holcim, is the resulting entity from the 2005 merger of French cement giant Lafarge and Swiss firm Holcim. The group sold 209.5 million tonnes of cement in 2017.
Lafarge Africa ( formerly known as Wapco) closed at N28.50 in today’s trading session on the Nigerian Stock Exchange. Year to date, the stock is down 38.7%
Earlier this week management announced the resignation of Jean-Carlos Angulo as Non-Executive Director of the company with effect from the 20th of July 2018. He has since been replaced by Rossen Papazov.
