Economy
Lafarge Africa Vows to Sustain Cost Optimisation Initiatives
By Modupe Gbadeyanka
**Anticipates Slow Down in Growth Momentum
The management of Lafarge Africa Plc has said it expects the growth momentum witnessed in the cement industry in Nigeria lately to slow down this year.
The company said this anticipated decline will be caused by the coronavirus pandemic the globe is battling with at the moment. The virus has made many sectors to be on a standstill.
However, Lafarge Africa said it is mapping out strategies to ensure a minimal impact on its business in the 2020 financial year.
One of the key ways the firm said it considering is the implementation of its cost optimisation initiatives, which proved effective in the 2019 fiscal year.
Last year, the company cut down its administrative expenses 29.3 percent to N17.6 billion from N24.9 billion in 2018, due to a significant reduction in the directors’ costs to N35.5 million from N176.0 million, insurance from N331.2 million to N6.8 million, other supplies & spare parts from N1.0 billion to N156.9 million, rent from N836.2 million to N62.5 million, consultancy fees from N3.1 billion to N847.9 million, repair and maintenance from n736.8 million to N17.9 million, security cost from N414.7 million to N187.8 million, and travel from N875.7 million to N591.1 million.
Also, technical service fees were pruned to N3.9 billion from N6.3 billion and according to the note given by the company, Lafarge Africa is in the process of finalising a technical service agreement with Holcim Technology Limited, a related party which relates to Industrial Franchise.
This agreement, according to the cement firm, is awaiting registration with the National Office for Technology Acquisition and Promotion (NOTAP) in Nigeria and the provision is computed as 5 percent of Earnings before interest and tax (EBITDA) for both group and company subject to maximum of 2 percent of net sales.
Lafarge Africa promised to maintain these cost optimisation initiatives for a better 2020 despite the anticipated negative impact of the virus in the global space.
“As the Coronavirus (COVID-19) pandemic now impacts Nigeria, Lafarge Africa has taken the necessary measures to protect the health of its employees, customers, suppliers and other stakeholders.
“The construction sector and construction sites are generally more resilient than other sectors and Lafarge Africa has a strengthened balance sheet and is well equipped to weather the storm.
“However, we are closely monitoring the evolving situation and the impact of the COVID-19 pandemic on the Nigerian market.
“The Nigerian cement industry growth momentum is expected to slow down in FY 2020 compared to 2019 on the back of the COVID-19 pandemic and the challenging global macro-economic environment.
“We have launched an action plan Health, Cost & Cash and will continue to focus on the implementation of our cost optimisation initiatives during this period to minimise the impact on the business,” the company stated.
In the 2019 financial year, Lafarge Africa recorded a turnaround, which the CCEO, Khaled El Dokani, attributed to “cost-reduction strategy and the divestment of the South African business.”
El Dokani noted that, “The decrease in net debt has significantly strengthened our balance sheet and has placed us in a vantage position to face the future.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
