Chinenye Anuforo
Lafarge Africa Plc has reduced its debt by $1.1 billion in the last three years.
Addressing shareholders at the Annual General Meeting Monday in Lagos, its Chairman, Mr. Mobolaji Balogun, told shareholders that Lafarge expects that the reduction in the debt profile following the conclusion of the N89.2 billion Right Issue and the approval of the proposed sale of Lafarge South Africa Holdings (LSAH) will result into a substantial reduction in financing cost as from 2019.
Balogun assured shareholders that the board and management would continue to drive improvements in results.
He said: “Despite the challenging economic and regulatory operating environment, the company has continued to make significant progress on a number of fronts, thereby ensuring solid operating performance. The Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margins in the Nigerian operations stood at 27 per cent at close of the year, resulting from a stable pricing environment, stabilising industrial operations, the use of alternative energy and the implementation of our commercial and logistics performance improvement plan.”
Other items discussed at the AGM include the proposal by Lafarge Africa to sell Lafarge LSAH to LafargeHolcim Group. With the proceeds from the proposed sale, it is expected that Lafarge Africa’s shareholder loan as at July 31, 2019, will be completely paid off. The loan represents the only existing foreign currency loan in the books of the company. The proposal was eventually approved by an overwhelming majority of shareholders at the AGM.
On dividend, Balogun said: “On the basis of the results for the year, the Board is unable to propose dividends. With the sale of LSAH as proposed by the Board to shareholders, the only debt that will remain on the books of the company will be the second tranche of the corporate bond due for redemption in June 2021 and the subsidised loan in respect of the CBN Power Intervention Funds through the Bank of Industry. This significant reduction in debt holds prospects for dividend distribution in future”.
In his submission, the Managing Director of Lafarge Africa, Mr. Michel Puchercos, appreciated the understanding showed by the shareholders in approving the Board’s proposals. He maintained that Management is determined to deliver on the trust expressed by the shareholders.