Power & Energy

Lafarge Africa increases dividend by 9%, raise stakes in UNICEM, AshakaCem

Lafarge Africa Plc, promi­nent cement and building so­lutions provider, has exhib­ited a robust positive outlook for the year 2015 by raising its stakes in UNICEM and AshakaCEM, the company’s profitability pro­file also took a leap in 2014, with the company approving a N3.60 dividend for its shareholders rep­resenting nine per cent improve­ment over prior year’s.

Lafarge Africa, posted an op­erational Profit after Tax of N37 billion, which is eight per cent higher than prior year, after ad­justing for one-offs. Operations of United Cement Company Ltd (UNICEM) were included on an equity basis in Q4. Cash of N49 billion was generated from the operations. The Board of Direc­tors of Lafarge Africa at its meet­ing of March 11th 2015, approved a dividend of N3.60 subject to shareholders approval.

Raising stakes

Lafarge Africa Plc, formerly known as Lafarge Cement Wapco Nigeria Plc, is a combination of all Lafarge’s Nigerian operations – (AshakaCem Plc, UNICEM, At­las Cement Company Limited) and Lafarge South African Hold­ings Limited assets in order to create a stronger platform for growth in Sub-Saharan Africa, with value creating opportuni­ties. The transaction was con­cluded in September 2014.

On 7 November 2014, Nigerian Cement Holdings B.V. (NCH), a 50 per cent affiliate of Lafarge Africa Plc, entered into an agree­ment with Flour Mills of Nigeria, defining a roadmap to purchase Flour Mills of Nigeria’s 30 per cent investment in UNICEM (the 3rd largest cement manufacturer in Nigeria). Recently the com­pany announced the completion of the first phase of 15 per cent acquisition.

Being required in accordance with Section 131(1) (a) of the In­vestments and Securities Act, 2007, to make a Tender Offer to all other shareholders of Ashaka­Cem Plc. Consequently, the Board of Lafarge Africa granted approv­al for a Tender Offer to be made to all Qualifying Shareholders of AshakaCem Plc. The Mandatory Tender Offer was successful and is in the final stages of regulatory approval.

  • Lafarge Africa Plc (“Lafarge Africa”) received, and accepted, 534,144,592 ordinary shares of AshakaCem Plc (“the Company”) tendered by 3,641 Shareholders. This represents 23.85 per cent of the Company;

Lafarge Africa has allotted 150,725,822 ordinary shares of its shares as consideration to the Shareholders that accepted the Offer;

  • An additional cash consider­ation of N1,068,289,184 has also been paid to the Shareholders that accepted the Offer;
  • Following the conclusion of the Offer, Lafarge Africa now owns 82.46 per cent of Ashaka­Cem Plc.

Lafarge Africa Plc has an­nounced the completion of the Mandatory Tender-Offer to all other shareholders of Ashaka­Cem Plc, following receipt of the requisite regulatory approvals.

Under the terms of the tender offer, qualifying shareholders who accepted the offer were allot­ted 57 ordinary shares in Lafarge Africa for every 202 ordinary shares in AshakaCem Plc ten­dered. An additional cash pay­ment of N2.00 (Two Naira) per every ordinary share of Ashaka­Cem Plc purchased by Lafarge Africa during the acceptance pe­riod was also made to accepting shareholders.

The acceptance period for the tender offer opened on December 10, 2014 and closed on January 23, 2015 following an extension of five (5) working days to the offer period.

Commenting on the comple­tion of the transaction, the Chair­man of Lafarge Africa Plc, Chief Olusegun Osunkeye, CON, OFR said “This is a significant step in the conclusion of the consoli­dation process of Lafarge Africa Plc. I would like to express my appreciation to the AshakaCem shareholders whose participa­tion in the transaction (through the tender of their shares) has made this a very successful pro­cess.’’

In addition to this, Mr. Guil­laume Roux, the Group Manag­ing Director/CEO of Lafarge Af­rica Plc said: “We are delighted to have received a great response from AshakaCem Plc sharehold­ers and will continue to work to­wards maximizing shareholder value.”

Performance

In his statement, Osunkeye, said “it is with pleasure that we publish the first audited results of our newly transformed Com­pany. The good performance even in a volatile market affirms the strength of our new Company and our commitment to achiev­ing excellence.”

Commenting on the results, Roux mentioned that ‘’our Com­pany has shown impressive performance; our business com­bination plans have been well executed within set timelines. We are committed to improving op­erational performance by lever­aging on opportunities this pres­ents to us to deliver sustainable returns to our shareholders.”

Key Highlights for the pe­riod

  • Consolidated Revenues were flat at N206 billion when com­pared to 2013. The Nigerian oper­ations showed a growth of eight per cent 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.
  • Profit After Tax grew by eight per cent when adjusting for one-offs in 2013 and the UNICEM scope change. Profit After Tax was N35 billion in 2014.

Future outlook

Lafarge Africa Plc has shown remarkable performance in the year and states that it remains highly committed to driving busi­ness excellence. The company ex­pects cement demand to increase both in Nigeria and South Africa in 2015.

“In Nigeria, the demand growth should be supported by increasing needs for housing and infrastructures, but could be lower than normal growth levels given the exchange rate devel­opment. This should be partly cushioned through the South Af­rican cash flow. We remain very optimistic and highly committed to delivering innovative building materials while leveraging on the operational strength and pedi­gree of the Lafarge Group,” the company said in a statement.

About the author

Ada Ada

Leave a Comment

%d bloggers like this: