Lafarge Africa Plc has disclosed that it will be seeking permission from its shareholders during the company’s Annual General Meeting (AGM) to raise fresh N100 billion for its operations.
The Chief Financial Officer (CFO), Bruno Bayet, who stated this while presenting the company’s Facts behind the Figures in Lagos yesterday said the fund will be raised through an offer of debt and/or equity in the domestic and/or international capital markets to be carried out in such manner, at such time, for such consideration and upon such terms and conditions as the Board of Directors may deem fit.
Speaking on the negative impact of South African performance had on the Lafarge Africa for the second consecutive quarter, Bayet said the performance in South Africa has been impacted by the arrival of new competitors in 2015/2016.
“This development now requires us to restructure and we are doing just that. We can also attribute the performance in South Africa to a technical incident in our plant there which affected production. Luckily all of those issues have been sorted and we are looking forward to a much brighter future
We must also add that in South Africa, the overall cement market experienced a significant drop in the last couple of years due to the impact of the overall macroeconomic environment,” he said.
Bayet said the first quarter results showed stability in the market and operations which have kept revenues steady in the past quarter adding that improvement plans in Nigeria is delivered strong operational performance.
He noted that turnaround actions will be consolidated further in 2018 through energy optimisation as well as commercial and logistic improvement.
“Q1 revenues were relatively stable compared to corresponding period in 2017, thanks to industrial operations in Nigeria within the period. Lafarge Africa Plc’s improvement initiatives (logistic, commercial and operational) helped to sustain performance through Q1 2018, delivering gains with profit after tax of N1.5 billion.
“Expectations of a strong market, favourable pricing in Nigeria coupled with gains from logistic and commercial initiatives will sustain market share going forward. The target is to build EBITDA margins above the 35 per cent benchmark. Amid policy and economic stability, the South Africa economy is expected to grow by 3 per cent in 2018. Lafarge Africa’s turnaround plan in South Africa, focused on cost containment, commercial transformation and industrial stabilsation, is expected to restore profitability despite Q1 loss,” Bayet said.
On whether there is intention to sell South Africa business Bayet said: “We do not comment or speculate on mergers acquisition and other related issues. However, we can confirm to you that the performance of South Africa is a concern and we are fixing the issues with the turnaround plan in place and the appointment of a new executive team that will return the business to profitability.”
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