Lafarge Africa reports EBITDA FY16 of NGN29bn

Lafarge Africa plc reports a significant increase in profit after tax in 4Q16 while net sales and operating EBITDA rose by 12 and 288 per cent, respectively in 4Q16.

However, operating EBITDA for FY16 fell to NGN29bn (US$95m) from NGN67.3bn in 2015. Profit after tax in FY16 reached NGN16.9bn. Net debt was reduced to NGN108.3bn, below the NGN120bn announced, notably supported by capex control and solid cash flows. 
 
Commenting on the company’s 2016 performance, Michel Puchercos, CEO of Lafarge Africa, said: "Our turnaround plan delivered solid results in 4Q16 in spite of the challenging environment in Nigeria and South Africa. Technical challenges have been resolved with all our plants operating at high reliability. Our energy optimisation plan has proved successful with increased use of Alternative Fuel (AF) to offset gas shortages. Ewekoro 1 plant migrated from 100 per cent reliance on gas and LPFO to about 40 per cement use of alternative fuels at the plant. Logistics and commercial turnaround plans are in place and enabling to restore market share."

Amid country-wide gas shortages in Nigeria, Lafarge Africa achieved record level fuel flexibility at its Ewekoro I and Sagamu plants. All plants are operating at optimal levels with capex provisions for 2017 aimed to consolidate energy optimisation at Ashaka, Ewekoro 2 and Mfamosing.

Mr Puchercos added: "Mfamosing line 2 was delivered ahead of time and above specification, and is now fully operational. The new Line contributed 338,000t in 4Q16 to cement production volume and is expected to deliver significant cost savings going forward."

Cement demand in Nigeria is expected to grow between 0-2 per cent for the full year, on account of the macroeconomic environment. Lafarge Africa expects to return operating EBITDA margins back to historical levels. It also envisages a capital expenditure of NGN31bn for Nigeria and South Africa operations, mainly to consolidate its energy optimisation plan for Ashaka's coal-fired captive power plant, alternative fuel use in Ewekoro 2 can coal in Mfamosing. It also plans to divest of non-core assets.