Michel Puchercos, Chief Executive of Lafarge Africa Plc, on Monday attributed the company’s return to half-year profit to the success of its turnaround efforts tagged: “Strategy 2022: Building for growth.”
According to the unaudited financials for the period ended June 30, 2019, presented to the Nigerian Stock Exchange (NSE), sales revenue was flat, while profit after tax came strong, helped by the N17.401bn reported in the three months ended June 30, 2019, representing a significant jump from just N639.093m reported in the corresponding period of 2018 (READ MORE).
Puchercos said Nigeria delivered to expectation “with strong volume growth, considerable EBITDA improvement, robust net income and operating cash flow development.
“We continue to deliver strong margins as a result of our turnaround and cost reduction strategy in Q2 with improvement in our commercial transformation, logistics performance, and industrial and energy efficiencies. Our ambition is to continue the acceleration of growth and earnings in 2019.
“South Africa continued the turnaround plan with significant EBITDA and operating profit improvement in Q2 2019 compared to the prior year,” he stressed.
Since the successful launch of the global roll-out of the new Strategy 2022 by Lafarge Africa, he continued, there has been “strong progress made in all four drivers of the strategy, delivering results as planned.
In a note to investors and shareholders through the NSE, Puchercos said “switching gears to growth is the most fundamental principle of Strategy 2022, (adding that) Nigeria is strongly contributing to this growth and acceleration of our improvement is expected in 2019 for Nigeria.
He listed other value drivers of the strategy to include simplification and performance, which also recorded visible progress “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.”
On financial Strength, the Lafarge Africa boss recalled that the recent rights issue, which was fully subscribed and divestment of its South African operations before the end of September, he believes, “will significantly deleverage Lafarge Africa Plc by about N239bn.
This, he stressed, “will strengthen the company’s balance sheet while significantly reducing financing costs.”
Another key element, the CEO explained, is the group’s vision and people, with a leadership team that “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.”
On the outlook for this year, Puchercos foresees softer cement growth compared to 2018; stable pricing environment; implementation of route-to-market and energy initiatives to continue to deliver; continuous focus on cash cost reduction to drive operational performance; and the divestment from South African operations in Q3.