Lafarge Africa Plc Issues Profit Warning for Q2'16 Results; To Be Impacted by Naira Devaluation

Proshare

Friday, July 08, 2016/ 1.15pm / NSE

The Board of Directors of Lafarge Africa Plc wishes to inform the Nigerian Stock Exchange that it’s 2016 Quarter 2 results are expected to be affected by the impact of the Naira devaluation against the USD resulting in an unrealized exchange loss.

The current gas supply shortage is also expected to impact volumes for this quarter. This announcement is based on the unaudited financial statements for the period ended June 30th 2016.

The impact of the Naira devaluation is expected to be a N28 billion Naira unrealized exchange loss arising from USD borrowings, which at the first time of the devaluation consisted of 310m USD shareholder loans and 85m USD 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 Plc of its original 35% stake in UNICEM.

Lafarge Africa Plc has since then increased its stake in UNICEM and held at the time of devaluation, 50% of UNICEM, which was fully consolidated. Lafarge Africa Plc now holds 100% of UNICEM. The 28 billion Naira unrealized 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, Calabar, 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 tones and will double capacity with the commissioning of a 2.5mm tones line during the second half of 2016.

Lafarge Africa recently concluded the issuance of a 60 billion Naira 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.

This information is being provided in compliance with the Listing Rules of the Nigerian Stock Exchange.

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