Lafarge Africa Plc H1 2018 Conference Call and Earnings Presentation - The Key Takeaways

Proshare

Tuesday, July 24, 2018 05:49 PM / Proshare Markets

Lafarge Africa Plc held its H1 2018 Investors and Analyst Conference Call Earnings Presentation. Proshare NG participated along with leading market analysts and professionals. 

Lafarge Africa Plc recorded a net sales of N162.292bn in H1 2018 as against N154.840bn in H1 2017, up by 4.8% YoY as significant growth in the volume of cement sold in Nigeria, about +19% , contributed immensely to the net sales while its South Africa cement volumes dropped by 7%. 

The cement manufacturer’s Profit After Tax dropped by 119.8% from N19.73bn in H12017 to N-3.90bn loss in H12018 while its overall EBITDA is still affected by its South Africa operations

The board of Lafarge Africa Plc ,as stated during the presentation, has approved a new plan to refinance its existing debt of N255.7bn which is aimed at preparing for future development in Nigeria, improving the Company’s leverage as well as strengthen its profitability. 

This will be subjected to corporate and regulatory approval and the refinancing plan is expected to include the reduction of existing shareholders dollar-denominated loan to $293 million; and a new right issue of N90bn to refinance short term Naira denominated borrowings and working capital. 

At the close of trading today, the share price of Lafarge Africa Plc dropped by a tick size of 10% to close at N29.25k from N32.50k previous close price. 

In a nutshell, below are the key takeaways from the H1 2018 earnings presentation made by the company’s management;

1. The company recorded strong operational performance across all entities in Nigeria while South Africa activities impacted group performance negatively.

2. The new route-to-market initiatives to be delivered in H2.

3.The firm foresee stable pricing environment and plans to continue to focus on cash cost reduction to drive operational performance in H2.

4.  Lafarge Africa plans a new rights issue of N90 to refinance short term Naira denominated borrowings and working capital as part of its debt refinancing plan approved by its board of directors

5.The South Africa operations recorded 7.7% improvements in revenue which is attributable to price increase in all segments in Q1 and FX translational effect

Proshare Nigeria Pvt. Ltd.

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