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Lafarge Africa halts capex and warns of second-quarter sales drop

Published 19/05/2020, 15:52
© Reuters.
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By Chijioke Ohuocha
ABUJA, May 19 (Reuters) - Lafarge Africa WAPCO.LG will
freeze capital expenditure this year, Chief Executive Khaled El
Dokani said on Tuesday after the cement company forecast a drop
in second-quarter sales as the coronavirus pandemic hits demand.
Major infrastructure projects have been put on hold, El
Dokani said, citing Nigeria's lower oil revenue because of a
slump in oil prices, with the company's sales volumes also hit
by the country's coronavirus lockdown.
The Nigerian unit of Franco-Swiss building materials group
LafargeHolcim LHN.S did not provide a sales figure for the
second quarter. Sales for the corresponding period last year
were 81.78 billion naira ($227.2 million).
Nigeria on Monday said that a phased reopening of the
economy would go ahead more slowly than planned and that it will
impose targeted lockdown measures in areas that report rapid
increases in coronavirus cases. There have been 6,175 confirmed coronavirus cases in
Nigeria, with 191 deaths.
"COVID-19's impact on the 2020 results cannot be reasonably
estimated at this stage, but long-term prospects remain
positive," El Dokani said on an analysts call, adding that the
company has implemented cash-control measures.
Capital expenditure in the first three months of the year
stood at 2.9 billion naira, down from 6.9 billion naira in the
same period last year.
El Dokani said Lafarge Africa is aiming to ensure there is
no further capital expenditure for the rest of the year.
At the start of the year, the company had forecast growth in
its main Nigerian market as well as targeted exports.
Cement volumes in the first-quarter rose 8% and overall
sales of 63.7 billion naira were up 9.8%, El Dokani said, helped
by a 2% price rise that had taken effect in December.
($1 = 360.00 naira)

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