Following the profit warning Lafarge Africa Plc, issued to the market last week on its unaudited second quarter result for the period ended June 30, 2016.
The company has reported a loss after tax of N30,246.24 billion for the period under consideration, against profit after tax of N27,316.35 billion that was recorded same period in 2015, which is a sharp drop of 210.73 percent.
Loss before tax stood at N30,184.20 billion, which is a drop of 197.85 percent when compared with profit before tax of N30,847.72 billion posted same period in 2015. Finance charges was up by 159.46 percent to N4,559,42 against N1,757,28 that was used to service loans in 2015.
Revenue was also down by 29.45 percent to N107,364,80 billion against N152,178,87 billion in 2015. It would be recalled that Lafarge Africa Plc had sent a profit warning to the investing community that they will be reporting a lower earnings in their 2016 half year.
The company explained that the impact of the naira devaluation is expected to be a N28 billion naira unrealized exchange loss arising from US Dollars borrowings, which at the time of devaluation consisted of 310 million US dollars shareholders loans and 85 million US Dollars external loans.
According to the company, these loans relates United Cement Company of Nigeria Limited (Unicem) and where mainly set up prior to the acquisition by Lafarge Africa Plc of its original 35 percent stake in Unicem.
The notice stated that Lafarge Africa Plc has then increased its stake in Unicem and held at the time of devaluation, 50 percent of Unicem, which was fully consolidated that now makes Lafarge Africa owns 100 percent of Unicem.
However, Lafarge board has assured that the N28 billion unrealized exchange loss, will have no immediate impact on cash flow. While they are positive about the future outlook for Unicem, which is strategically located in Mfamosing, Calabar, in Cross Rivers State and it a major cement plant in the South-South and South-East region of Nigeria.
The plant has a capacity of 2.5mm tonnes and will double capacity with the commissioning of 2.5mm tonnes line during the second half of 2016. Lafarge recently concluded the issuance of a 60 billion naira bond, to refinance Unicem naira debt.