CBN Forex Reforms Brighten Outlook For Lafarge

 CBN Forex Reforms Brighten Outlook For Lafarge

CbnAdjustment in the official value of the naira against major international currencies will affect the second quarter results of Lafarge Africa Plc, the company has said.
According to its latest profit update to the Nigerian Stock Exchange (NSE) at the weekend, the company has a total of $495 million in external borrowing on its book.
It said the figure comprised debts by UNICEM, one of its operating companies acquired last year.
Prior to the completion of the LafargeHolcim merger, Lafarge Africa had 53 per cent stake in UNICEM.
Besides the Southwest where WAPCO Lafarge is the dominant operator with two major factories in Ewekoro and Sagamu, UNICEM is a key supplier to the market in Southsouth.The update noted that the company’s Board of Directors is upbeat about the company’s prospects this year.
It said: “The impact of the naira adjustment is seen as a one-off event with durable future benefits. With the reform of the interbank forex market boosting the confidence and interest of foreign financial institutions in the Nigerian market, Lafarge Africa Plc is confident it can refinance UNICEM’S $495 loan by the end of 2016, thus making significant savings on interest payments.
“Lafarge Africa Plc, in June 2016, refinanced the naira component of the company’s debt when it issued a N60 billion bond, the largest in Nigeria’s corporate history.
“This was seen by analysts as a display of confidence in the company’s fundamentals and generally in the prospect of Nigeria’s construction sector.
“UNICEM is strategically located in Mfamosing, Calabar, in Cross Rivers State and is a major cement plant in the Southsouth and Southeast.
“It has a cement capacity of 2.5mm tonnes; Lafarge Africa Plc plans to inaugurate a 2.5m tonnes line during the second half of 2016, which will double UNICEM’s capacity.”


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