Naira Devaluation Affects Lafarge 2016 Half Year Result

Lafarge Africa Plc

Lafarge Africa Plc said they expects their 2016 unaudited second quarter result to be affected by the impact of naira devaluation against the US dollar resulting in an unrealized exchange loss.

The company in a notice to the Nigerian Stock Exchange (NSE) also said the current gas supply shortage is expected to impact volumes for this quarter. 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.

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