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Lafarge Africa Plc Q1 2017 Conference Call & Earnings Presentation - The Key Takeaways

Proshare

Wednesday, April 26, 2017 7:55 PM / Proshare Markets  

Lafarge Africa Plc held its Q1’17 Investors and Analyst Conference Call Earnings Presentation. Proshare NG participated along with leading market analysts and professionals. 

The cement manufacturing company stated that its turnaround plan in Nigeria continued to deliver solid operational performance. This was achieved through stable plant operations with kiln reliability of approximately 90%; Fuel flexibility in place to compensate for gas supply shortages; Its Ewekoro I recorded alternative fuel substitution performance of 46% YTD; and Mfamosing new line ramping up, through a learning curve. The company further stated that it is solidifying its turnaround plan to deliver 2017. 

Its Nigeria operations recorded slight improvement in domestic cement demand in Q1 2017 compared to Q4, up by 6% but impacted by recession. Its overall sales went up by 51.4% to N59.4bn with strong contribution recorded across all plants. 

The company’s ReadyMix concrete operations was impacted by macro-economic slowdown as major construction projects were delayed due to shortage of funds while a 2nd ReadyMix plant commissioned in Abuja in November 2016 to support the demand in the region has stabilized well. 

In a nutshell, below are the key takeaways from the Q1 2017 earnings presentation made by the company’s management; 

  • The company expects market demand to gradually recover in second semester 2017 which will be driven largely by incremental government revenue, spending especially on infrastructure and improved confidence in the private sector as Nigeria cement market growth expectation remain between 0% to 2%. 

  • Pricing environment in Nigeria & South Africa expected to remain stable on account of economic Realities. 

  • The company plans to build on its turnaround plan in Nigeria to improve cost structure. 

  • Its South Africa operations embarked on cost reduction measures to counter the economic situation. 

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