Sales at Lafarge Africa Plc grew in the third quarter and 9-month period ended September 2017 by 39 and 28 per cent respectively.
The company attributed the increase partly to the export of cement to Ghana adding that stable prices, fuel flexibility and, better logistics and commercial performance increased the company’s EBITDA by four times to 41.7 billion with margins stable at 30 per cent.
Michel Puchercos, CEO of Lafarge Africa said: “Our company continues to recover since we implemented the turnaround plan in September 2016 and have delivered a good performance even in a challenging market. As of September 2017, the cement demand in Nigeria was significantly lower than prior year. Nevertheless, operating EBITDA for our Nigeria operations was up four times at 41.7 billion and EBITDA margin stood at 30 per cent thanks to stable pricing environment, steady industrial operations, fuel flexibility, execution of our commercial and logistics performance improvement plan. We shipped the first batch of cement to the Ghana market, which was well accepted.
The South African economy exited a recession in second quarter 2017, supported by secondary and tertiary sectors. Cement revenue was up 30 per cent supported by stable pricing and the strengthening of the Rand against the Naira. However, operations were impacted in the quarter by industrial challenges at the Lichtenburg plant.”
Overall cement demand in Nigeria is expected to close the year lower than the prior year, on account of the economic slowdown in the first half 2017. In South Africa, the environment gradually recovers from a recession but the challenges of cement overcapacity persist. In this context, Aggregate & Concrete operations will support business performance.”
Puchercos maintained that “our EBITDA margin expectations in Nigeria for 2017 remains strong at the mid-30s, as we strengthen the performance on the basis of a robust route to market, efficient logistics operation, and cost optimization programme through fuel flexibility, reduction of FX exposure and administrative cost optimization.
Our South Africa operations would benefit from the aggregate & concrete business, as our cement operations stabilizes. Lafarge Africa remains committed to delivering strong performance and create value for our Shareholders in 2017”.