Lafarge Africa records N3.15bn PAT in Q1 2019

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  • Operating profit up 35% with profitability improved in all business segments
  • Net income positive in Q1
  • Significant reduction in net debt
  • Successful rights issue fully subscribed in Q1 2019 for N88,4bn
  • Divestment of South Africa operations signed on May 31st, for a cash consideration of N114,1bn


Group Quarter 1 2019

 (in million NGN) Q1 2019 Q1 2018   Var. (±%)
Net sales  78,512  80,643 -2.6%
Recurring EBITDA (pre-IFRS 16)  15,113  14,161 6,7%
Recurring EBITDA (post-IFRS 16) 18,686
Operating profit/loss  8,425  6,256 35.0%
Net income 3,145  (2,002)

Michel Puchercos, CEO of Lafarge Africa: “Our Strategy 2022 ‘Building for Growth’ in Nigeria is delivering the expected results with a strong increase in operating EBITDA and profit. Our momentum is very positive and is expected to be sustained in 2019.”

“South Africa continued the turnaround plan with significant improvement in Q1 2019 compared to the prior year.”

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“Our strategic decision to divest South Africa with a sale to another affiliate of the LafargeHolcim Group will strengthen our balance sheet.”

“The Rights Issue together with the divestment of our South African Operations will deleverage Lafarge Africa by c.N246bn, enabling to fully repay USD Shareholder Loan and short-term naira overdraft.”

“This will support Lafarge Africa’s ambition to accelerate the execution of its Strategy 2022 and to fully focus on the development of the Nigerian market.”


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On May 31st, Lafarge Africa has signed an agreement with Caricement B.V. an affiliate of the LafargeHolcim Group, for the divestment of its entire 100 per cent shareholding in Lafarge South Africa Holdings (Pty) Ltd for a consideration of US$317m. Closing of the Proposed Sale is expected in Q3 2019 and is subject to customary and regulatory approvals as well as the approval of Lafarge Africa’s shareholders’ meeting.

The Proposed Sale is expected to enhance the value of shareholders’ investments in Lafarge Africa.  The proceeds of the Proposed Sale (US$317m) will be used to completely extinguish Lafarge Africa’s shareholder loan of US$293 million as of July 31, 2019, and related interest due. This full repayment of the shareholder loan will protect and preserve Lafarge Africa’s net Income and cash flows.

The improvement in cash-flow and net income, resulting from the reduction in debt service outflows, will enable Lafarge Africa to consider additional investments in cement production capacity and to improve its market share in Nigeria. The Proposed Sale is expected to boost the Lafarge Africa’s profitability, through positive cash flow generation.

In summary, the conclusion of the Proposal Sale is expected to:

  1. boost Lafarge Africa’s cash-flow and net income, given the reduction in debt service outflows;
  2. eliminate fully all foreign currency denominated debt and cut annual interest expense by c.N9.9 billion on account of the full repayment of the foreign currency shareholder loan;
  3. enable Lafarge Africa to reinvest in (and expand) operations in existing plants;
  4. enable the management of Lafarge Africa to devote attention to its Nigerian operations;
  5. strengthen Lafarge Africa’s Balance Sheet.
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Subsequent to the closing of the Proposed Sale, the only remaining debt on the books of Lafarge Africa will be the 2nd Tranche of the Corporate Bond (N33.8 billion) with maturity in June 2021, and the CBN Power Intervention funds through Bank of Industry (N19.9 billion).

Read Also:  Cement Sector: Overview and Outlook


Lafarge Africa continues to execute Strategy 2022 – “Building for Growth” at full speed in Q1 with strong progress made in all four drivers of the strategy, delivering results as planned.

Growth – Switching gears to growth is the most fundamental principle of Strategy 2022. Nigeria is strongly contributing to this growth and acceleration of our improvement is expected in 2019 with new products, increased capacity, and our new Route-to-Market strategy.

Simplification & Performance – Visible progress was made towards ensuring best-in-class performance by improving and unifying our business processes and logistics across the country. This has made our business simpler and gives us access to data that will help improve our speed to market in 2019 and beyond. Our successful Go-live on SAP will be a strong enabler to our 2019 performance.

Read Also:  Lafarge Africa Potential Room For Growth

Financial Strength – The recent Rights Issue (100% subscribed) and the Sale of South Africa operations will deleverage Lafarge Africa Plc by c.N246bn. This will strengthen Lafarge Africa’s balance sheet while significantly reducing financing costs.

Vision & People – Our leadership team is fully established and empowered to deliver results. A simplified performance management system and incentive system is being implemented. We are building local capabilities for improved efficiency and performance in 2019.


  • Market demand is expected to remain strong in Q2
  • Implementation of our new strategy 2022 is expected to further improve operational and financial performance



Q1 2019 continued to show positive trends with the market up +6%. Despite a strong increase in January, market growth was affected by the delays in the context of February’s general elections.

Lafarge Africa’s Cement volumes were up +5% in Q1, impacted during the first week of January by our SAP Go-Live and in February by limited dispatch capacity. March sales were the highest in the last 3 years.

Net Sales of Nigeria operations grew in Q1 by 0.6% compared to last year, affected by price erosion following a capacity increase from the competition. Price increased announced after the quarter ended.

Recurring EBITDA reached N20,6bn (post-IFRS 16) supported by our new Route-to-Market strategy, our Energy and Alternative Fuel strategy and Performance Improvement plans on Logistics and Industrial. Our strict cost discipline on all Support functions delivering approx. N0,7bn savings.

South Africa

In Q1 2019, our cement volumes were flat in a depressed South African Cement Market, thanks to the execution of our commercial strategy. However, our Aggregate and RMX volumes were still down in Q1 due to delay in infrastructure spending. Cement Prices in ZAR were increased in February and March, but overall Q1 prices were affected by FX translation. Net Sales for the Q1 2019 dropped to N20,5bn, down 10.8%.

Cement Performance continued to show improvement, despite kiln shutdown. The Aggregate delivered positive EBITDA while the RMX activities significantly improved during the quarter. Overall, Recurring EBITDA (post-IFRS 16) for South Africa operations improved by 57% compared to last year and closed at N-1,6bn.

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Lafarge Africa records N3.15bn PAT in Q1 2019 - Brand SpurLafarge Africa records N3.15bn PAT in Q1 2019 - Brand Spur

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Lafarge Africa records N3.15bn PAT in Q1 2019 - Brand SpurLafarge Africa records N3.15bn PAT in Q1 2019 - Brand Spur

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