The board of director of Lafarge Africa Plc on Wednesday played a bitter-sweet on shareholders of the cement company as it recommended payment of N5.47 billion as cash dividends for 2016 business year in spite of noticeable decline in the performance of the company.
The board of Lafarge Africa announced that about N5.47 billion would be paid to shareholders as dividend for the 2016 business year, representing a dividend per share of N1.05 for the 2016 business year, 65 per cent below N3 paid for the 2015 business year.
However, the audited report and accounts of Lafarge Africa for the year ended December 31, 2016 showed that the net profit was due mainly to tax gain as the company suffered a pre-tax loss of N22.8 billion in 2016.
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Lafarge Africa’s turnover declined 18 per cent from N267.2 billion in 2015to N219.7 billion in 2016. Gross profit also slumped by 51 per cent from N82.5 billion to N40.7 billion. As against pre-tax profit of N29.3 billion in 2015, the company recorded a pre-tax loss of N22.8 billion in 2016. However, with tax gain of N39.7 billion in 2016, net profit turned positive at N16.9 billion in 2016, still lower than N27.2 billion recorded in 2015. Earnings per share consequently dropped from N5.74 in 2015 to N3.15 in 2016.
Lafarge Africa had during the immediate past year indicated it was considering raising new debt capital to refinance dollar-based debt of its subsidiary after change in Nigeria’s foreign exchange (forex) resulted in a forex loss of N28 billion.
The board of Lafarge Africa said the group suffered a forex loss of N28 billion due to dollar-based debt of its subsidiary, United Cement Company of Nigeria (Unicem) and directors were considering refinancing part of the dollar-based debt. Lafarge Africa recently concluded issuance of a N60 billion bond to refinance Unicem Naira-based debt.
Lafarge Africa forewarned investors that the cement group might record lower performance for the second quarter of this year as the foreign loans of Unicem weighed down the group performance.
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