In a regulatory filing, 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’s performance.
Lafarge Africa’s share price dropped by five per cent on Friday, July 8 and dipped further by 5.03 per cent on Monday to close at N60.45. The cement group in a profit-warning stated that the second quarter results of the year would be affected by the impact of the Naira devaluation against the dollar which resulted in N28 billion unrealised exchange loss.
The company added that the current gas supply shortage also impacted volumes for the quarter. Lafarge Africa stated that the N28 billion unrealised exchange rate loss arose from dollar-based borrowings, which at the time of the devaluation consisted of $300 million shareholder loans and $85 million external loans.
The cement group explained that the loans were related to United Cement Company of Nigeria (Unicem) Limited and were mainly set up prior to the acquisition by Lafarge Africa Plc of its original 35 per cent stake in Unicem.
Lafarge has since then increased its stake in Unicem and held at the time of the devaluation 50 per cent of Unicem, which was fully consolidated. Lafarge now holds 100 per cent of Unicem.
