With slow sales and significant increase in financial charges, Lafarge Africa has announced N30 billion loss in profit for the half year period ended June 30, 2016.
The cement manufacturing company had reported a N30.8 billion gain in prior half year attributed to increase sales and modest loss in finance charges that include foreign change charges.
It will be recalled that the management of Lafarge Africa had announced exchange loss of N28 billion arising from Dollar borrowings that might affect it profit.
Financial charges rose by 159 per cent from N1.8 billion in half year ended June 30, 2015 to N4.6 billion half year ended June 30,2016
Also, sales of Lafarge Africa dropped by 29 per cent to N107.36 billion as against N152.2 billion recorded in half year under review, with decline in profit, the company’s earnings per share moved from N5.86 to loss of N5.54.
However, the company in a statement signed by its company Secretary, Uzoma Uja, noted that the cement manufacturing company had borrowed in total sum of $395 million before the new CBN guidelines on foreign exchange.
According to the statement, “the impact of the naira devaluation is expected to be a N28 billion unrealized exchange loss arising from USD borrowings, which at the time of the devaluation consisted of $310 million shareholder loans and $85 million external loans.
These loans relate to United Cement Company of Nigeria Limited (Unicem) and were mainly set up prior to the acquisition by Lafarge Africa plc of its original 35 per cent stake in Unicem.
“Lafarge Africa Plc has since then increased its stake in Unicem and held at the time of the devaluation, 50 per cent of Unicem, which was fully consolidated.
“Lafarge Africa Plc now holds 100 per cent of Unicem. The N28 billion unrealized exchange loss will have no immediate impact on cash flow,” the company explained in its statement to Nigerian Stock Exchange.
Furthermore, total assets in six months rose by nearly nine per cent to N492.5 billion from N435 billion as at December 31, 20115.
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