Undeterred by the economic challenges faced in 2016, the board of Lafarge Africa plc offered its shareholders a dividend of N1.05 gross per share at its annual general meeting in Lagos, yesterday.
The dividend amounts to N5.8 billion, which represents 34.7 percent of net income after taxation.
Demand for cement which had grown steadily for the past five years up till 2015 flattened in 2016, when oil prices dropped remarkably consequently leading to the devaluation of the naira and limiting government expenditure, a critical driver of activity in the construction sector.
Growth was also subdued in South Africa during the same period, as the economy slowed down and imported cement flooded the market.
Following the economic slowdown in 2016 in the construction sector in Nigeria and in South Africa, Mobolaji Balogun, chairman of the company, commended the board and the management for taking measures to reduce the effect of the devalued naira, successful commissioning of the new line in Mfamosing and for the transformation of the company.
Benefits of the turn-around plan launched in the third quarter of 2016 were already counting in Q4 2016. According to the chairman, “We have increased local sourcing of critical materials to lower foreign exchange component of our operational costs. Finally, we are working on a new route to market initiative and improvements in logistics with increased vehicle turn-around and size of fleet of third party providers.”
Michel Puchercos, the country CEO of Lafarge Africa, remarked, “The plan is to increase the use of alternative fuel (biomass) and locally mined coal to lessen production disruptions due to gas supply shortages.
“Looking forward, the company sees opportunities for the domestic consumption of cement with growth in the second part of the year supported by initiatives through infrastructure and private initiatives.”
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