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Lafarge Africa moves to pay N13bn in dividends due to strong EBITDA margin, others

Successful right issue that was concluded in March this year and excellent EBITDA margin in possession are among the key indicators that encouraged leading cement and construction solutions providers, Lafarge Africa Plc declared a dividend of N1.50 per share totaling N13bn.

The blue chip group recently released its full year financial results for the period ending December 2017.

The proposed payout represents a 43% increase in growth relative to the dividend paid in 2016. Bruno Bayet, Chief Financial Officer of the company noted that the dividend will be paid from the 2012/2013 pioneer profit reserve

In addition, the company’s recurring EBITDA doubled to N57.6 billion. The CEO of Lafarge Africa Plc Michel Puchercos attributed the strong margins in the Nigerian business to cost initiatives and more favourable pricing.

Continuing, the chief executive averred that Lafarge Africa Plc’s industrial operations in 2017 were stable with plants operating at high reliability levels. He also noted that the energy optimization plan for the company has been successful with increased use of Alternative Fuel and Coal to offset gas shortages in operations in the West while plant operations in the eastern and northern part of the country relied mainly on gas and coal. He said these logistic, commercial and operational initiatives helped to sustain market share in the year under review.

According to him, the expected recovery in the macroeconomic environment in Nigeria is likely to have a positive impact in the overall cement market in Nigeria. Our Business turnaround actions will be consolidated further in 2018 through energy optimisation as well as commercial and logistic improvement. “In 2018 we shall implement a continuous improvement programme that will see us building on EBITDA margins above the 35% benchmark,” says Lafarge Africa’s CEO, Michel Puchercos. The capital expenditure expectation for Nigeria will be mainly devoted to Energy and Production Optimisation.

For South Africa the economy is expected to grow by 3% in 2018. The turnaround plan of the South African operations is focused on cost containment, commercial transformation and industrial stabilisation. The overall goal is to create value for shareholders through an attractive growth profile and good margins.

Lafarge Africa successfully raised N131bn by way of Rights Issue, the largest Rights Issue by size raised in Nigeria so far. Minority participation was in the 50s, while LafargeHolcim subscribed to the un-allotted portion. This brings the ownership of LafargeHolcim to 76.32% from 71.35% prior to the Rights Issue.