Shares of Lafarge Africa Rise as Management Assures Positive Outlook

By Dipo Olowookere

Shareholders of Lafarge Africa Plc have been assured of a positive performance in the 2020 financial year despite the challenges posed by the global health crisis.

The year has been plagued with the coronavirus disease, with the world economy struggling to breathe because of the virus.

In the most part of the second quarter of this year, many countries shut down their economies as part of efforts to contain the contagion.

But despite this, Lafarge Africa delivered a strong half-year performance, though its revenue for the second quarter understandably reduced.

Majorly, the balance sheet was strengthened by the company in the period under scrutiny to weather the COVID-19 crisis, with a strong improvement in net income recorded in the period.

Like earlier stated, though the net sales slumped to N56.9 billion from N59.9 billion in Q2 2020, there was a hike in the revenue in H1 2020 to N120.5 billion from N117.9 billion in H1 2019.

Lafarge Africa stated that it cut down its net financial debt to N15.1 billion in the first half of the year from N37.1 billion in the 2019 full year, which ended December 31.

In his reaction to the results, the CCEO of Lafarge Africa, Mr Khaled El Dokani, stated that: “Q2 results remained resilient with net sales of -5.1 per cent and recurring EBIT +29.7 per cent, compared to the prior-year period, despite the impact of the COVID-19 pandemic.

“The implementation of our Health, Cost and Cash (HCC) initiatives have delivered a considerable improvement in our performance.”

Commenting on its outlook, the cement firm said despite the impact of COVID-19 pandemic in H1 2020, medium to long-term outlook remains positive.

“With the gradual easing of the lockdown by the federal government, we will continue to focus on the business resilience to maintain a healthy balance sheet, while prioritising the health and wellbeing of our people, communities and other stakeholders,” the company said.

Business Post reports that on Monday, investors reacted positively to the numbers of the company, causing a huge demand for its shares at the stock exchange.

This pushed the price of the stock higher to N12 as at the time of filing this report from N10.95 it traded last Friday.

There are expectations that the price of the stock will hit the N15 territory before the end of the year going by its half-year figures.