Strong profitability improvement in Q1 2019

  • Operating profit up 35 with profitability improved in all business segments
  • Net income positive in Q1
  • Significant reduction in net debt  
  • Successful rights issue fully subscribed in Q1 2019 for N88,4bn
  • Divestment of South Africa operations signed on May 31st, for a cash consideration of N114,1bn



press release

Michel Puchercos, CEO of Lafarge Africa: “Our Strategy 2022 ‘Building for Growth’ in Nigeria is delivering the expected results with strong increase in operating EBITDA and profit. Our momentum is very positive and is expected to be sustained in 2019.”

“South Africa continued the turnaround plan with significant improvement in Q1 2019 compared to prior year.”

“Our strategic decision to divest South Africa with a sale to another affiliate of the LafargeHolcim Group, will strengthen our balance sheet.” 

“The Rights Issue together with the divestment of our South African Operations will deleverage Lafarge Africa by c.N246bn, enabling to fully repay USD Shareholder Loan and short-term naira overdraft.”

“This will support Lafarge Africa’s ambition to accelerate the execution of its Strategy 2022 and to fully focus on the development of the Nigerian market.”



On May 31st, Lafarge Africa has signed an agreement with Caricement B.V. an affiliate of the LafargeHolcim Group, for the divestment of its entire 100 percent shareholding in Lafarge South Africa Holdings (Pty) Ltd for a consideration of US$317m. Closing of the Proposed Sale is expected in Q3 2019 and is subject to customary and regulatory approvals as well as the approval of Lafarge Africa’s shareholders’ meeting.

The Proposed Sale is expected to enhance the value of shareholders’ investments in Lafarge Africa.  The proceeds of the Proposed Sale (US$317m) will be used to completely extinguish Lafarge Africa’s shareholder loan of US$293 million as at July 31, 2019, and related interest due. This full repayment of the shareholder loan will protect and preserve Lafarge Africa’s net Income and cash flows.

The improvement in cash-flow and net income, resulting from the reduction in debt service outflows, will enable Lafarge Africa to consider additional investments in cement production capacity and to improve its market share in Nigeria. The Proposed Sale is expected to boost the Lafarge Africa’s profitability, through positive cash flow generation.

In summary, the conclusion of the Proposal Sale is expected to:

  1. boost Lafarge Africa’s cash-flow and net income, given the reduction in debt service outflows;
  2. eliminate fully all foreign currency denominated debt and cut annual interest expense by c.N9.9 billion on account of the full repayment of the foreign currency shareholder loan;
  3. enable Lafarge Africa to reinvest in (and expand) operations in existing plants;
  4. enable the management of Lafarge Africa to devote attention to its Nigerian operations;
  5. strengthen Lafarge Africa’s Balance Sheet.


Subsequent to the closing of the Proposed Sale, the only remaining debt on the books of Lafarge Africa will be the 2nd Tranche of the Corporate Bond (N33.8 billion) with maturity in June 2021, and the CBN Power Intervention funds through Bank of Industry (N19.9 billion).



Lafarge Africa continue to execute Strategy 2022 – “Building for Growth” at full speed in Q1 with strong progress made in all four drivers of the strategy, delivering results as planned.

Growth – Switching gears to growth is the most fundamental principle of Strategy 2022. Nigeria is strongly contributing to this growth and acceleration of our improvement is expected in 2019 with new products, increased capacity, and our new Route-to-Market strategy.

Simplification & Performance – Visible progress was made towards ensuring best-in-class performance by improving and unifying our business processes and logistics across the country. This has made our business simpler and gives us access to data that will help improve our speed to market in 2019 and beyond. Our successful Go-live on SAP will be a strong enabler to our 2019 performance.

Financial Strength – The recent Rights Issue (100 subscribed) and the Sale of South Africa operations will deleverage Lafarge Africa Plc by c.N246bn. This will strengthen Lafarge Africa’s balance sheet while significantly reducing financing costs.

Vision & People – Our leadership team is fully established and empowered to deliver results. A simplified performance management system and incentive system is being implemented. We are building local capabilities for improved efficiency and performance in 2019.



  • Market demand is expected to remain strong in Q2 
  • Implementation of our new strategy 2022 is expected to further improve operational and financial performance