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N16bn dividend awaits Lafarge shareholders

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By Peter Egwuatu

Lafarge Africa Plc shareholders are expected to reap from the company’s consolidation as its Board of Directors is expected to propose a dividend of N16 billion at its forth coming Annual General Meeting, AGM. Vanguard reliably gathered that the Board would proposed a dividend of N16 billion to its shareholders at an AGM expected to hold next week. It will be recalled that the shareholders last year gave the Board approval to consolidate the businesses of the company in Africa into a stronger group.

The creation of Lafarge Africa has transformed the company into a group which is well equipped to continue the acceleration of a group to withstand challenges in the market place. It was gathered that company’s current production capacity has grown from 4.5 million tons to about 12 million tons. In addition, 3.5 million cubic meters of ReadyMi coco creates and over 5.0 million tons of Aggregates have been added to the portfolio.The improvement shows that the company’s decision to consolidate has been a wise one.

Company’s profile:

naira moneyLafarge Africa Plc was renamed following the consolidation of Lafarge S.A indirect assets in Nigeria and South Africa into the erstwhile Lafarge Cement WAPCO Nigeria Plc. The assets that were transferred to Lafarge Cement WAPCO Nigeria Plc included: Lafarge South Africa Holdings (Pty) Limited; United Cement Company of Nigeria Limited, through Egyptian Cement Holding B.V.; Ashaka Cement Plc; and Atlas Cement Company Limited. Following the transactions, the name of the company was changed to Lafarge Africa Plc in order to reflect its new reach and positioning.

Lafarge S.A. of   France, controls 72.74 per cent of Lafarge Africa the remaining 27.26 l is held by Nigerian and foreign, institutional and individual investors. Lafarge S.A. of France is a world leader in building materials with a presence in 62 countries across the Globe. Consequently, Lafarge Africa is able to take advantage of and benefit from Lafarge S.A.’s management and technical expertise.

Business consolidation:

The business consolidation that took place last year happened following the endorsement given the shareholders at a meeting in Lagos. Speaking after the shareholders’ approval, Osunkeye had said, “The overwhelming majority of our minority shareholders were strongly supportive, which reflects that they see the strong value opportunity in the creation of Lafarge Africa. Lafarge Africa is not only a value enhancing transaction for shareholders but it will provide significant value to all stakeholders through the creation of a Nigerian listed Sub-Saharan Africa building materials giant that will be better able to support the development needs of our continent.”

Speaking in the same vein, Group Managing Director/ Chief Executive Officer, Guillaume Roux, said: “The creation of Lafarge Africa allows the company to continue in its drive to be the best in the areas in which it operates. The broader geographic coverage means that Lafarge Africa will be better positioned to serve its customers more widely. It also places the company in a stronger position to be able to benefit from the economic growth and development opportunities available in both Nigeria and South Africa.”

Financial Performance:

Lafarge Africa Plc, ended 2014 with an operational Profit afterTax of N37 billion, which is eight higher than prior year, after adjusting for one-offs. Cash of N49 billion was generated from the operations, while a dividend of N3.60 per share was recommended for the shareholders, up nine per cent above what was paid the previous year. Consolidated revenues were flat at N206 billion when compared to 2013. The Nigerian operations showed a growth of eighth cushioning the short term market challenges in South Africa. EBITDA was relatively stable at N55.3 billion in 2014 compared to N55.7 billion in 2013, with Nigeria growing by 16 per cent.

For the first quarter ended March 31, 2015, Lafarge reported a revenue of N57 billion in the first quart which is 15% higher than Q1 2014. Profit After Tax was N8.6 billion and N14.6 billion of cash was generated from operations. Commenting on the results, Osunkeye said “our company has delivered a good performance in spite of the general elections and market uncertainty. We remain highly committed to delivering a strong result in 2015 in line with our ultimate objective of improving value to our shareholders”.

New Chairman:

Osunkeye will retire voluntarily as chairman of the Board of Directors of Lafarge Africa Plc effective May 22,   having served as a director for 14 years, five out of which was as chairman.He will be succeeded by Mr. Mobolaji Balogun will succeed effective May 23. Balogun, a non-executive director, is also Chairman of the Board Finance and Strategic Planning Committee and a Member of the Audit Committee.

Balogun is the Chief Executive Officer of Chapel Hill Denham, one of the leading independent investment banks in Nigeria and a Director of Lafarge Africa Plc and NAHCO Aviance Plc. “I am delighted that the Board has appointed Balogun to succeed me as chairman. He has a breadth of experience across Finance, Strategy and Management and is very familiar with Lafarge’s business in Nigeria and Africa and I am sure he is the right person to chair the Board going forward, after the 2015 AGM.

We have made considerable progress to create a stronger and more diversified building materials company but there is still work to be done. Bolaji is very well equipped to lead Lafarge Africa Plc through the next stage of its growth. His experience and expertise will be invaluable and I wish him every success in the future,” Osunkeye said.

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