Cement maker Holcim has announced the $1 billion sale of its 83.8% stake in Lafarge Africa to China’s Huaxin Cement.
After roughly 65 years of operations in Nigeria, Swiss cement and other building materials’ maker, Holcim, on Sunday announced that it was set to leave the country.
The company said in a brief statement that it will exit its Nigerian business through the sale of its almost 84 per cent stake in Lafarge Africa to China’s Huaxin Cement in a deal valued at $1 billion.
Nigeria has in recent years developed huge local capacity in the manufacturing of cement, led by the Dangote Group and BUA Cement among others becoming market leaders in the business segment.
However, the extant transaction is expected to close in 2025, subject to regulatory approvals by the Nigerian authorities, the global building materials manufacturing company in the statement.
It is gathered that the agreement aligns with Holcim’s strategy to streamline its portfolio and focus on high-growth regions, including the coming spin-off of its North American business, likely for US listing in the first half of 2025.
Lafarge Africa Plc, formerly known as West African Portland Cement Company (WAPCO), began operations in Nigeria in 1959 as a joint venture between the Western regional government, Blue Circle, and United Africa Company of Nigeria.
Lafarge Africa Plc grew its pre-tax profit by 717 percent to N47.69billion in third-quarter (Q3) to September 30, 2024 compared to N5.84billion in Q3 of 2023. The cement maker/building solutions company’s recently released financials for the review period shows that its net sales rose to N183.920billion in Q3’24 from N91.400billion in Q3’23, up 101percent.
The N38.50 per share which Lafarge Africa closed on the Nigerian Bourse on Thursday October 30 represents an increase by 4.05 percent year-to-date (YtD). The Q3 scorecard also shows earnings per share (EPS: N/share) of 190.75 in Q3 as against 23.75 in Q3’23, up by 703 percent.
Also in the review third quarter, Lafarge Africa operating profit was N51.169billion from N17.064billion in Q3.23, up by 200percent. The company’s Profit After Tax (PAT) in the review Q3 period rose by 703 percent to N30.726billion from N3.826billion in Q3’23.
The Nigerian Infrastructure and Construction Sector is expected to continue to grow despite inflationary pressure on purchasing power. As a result, Lafarge Africa maintains its positive outlook, with market recovery expected in this fourth quarter (Q4) of 2024.
“We achieved strong top-line growth of 101 percent and 66 percent in Q3 and 9 months (9M), respectively. PAT improved on the back of operational efficiency amidst heightened cost pressure. Our performance was driven by strong output due to improved plant stability, enhancement in our supply chain operations and our cost management initiatives,” said Lolu Alade-Akinyemi, CEO of Lafarge Africa.
He further said, “Our strategic initiatives contributed significantly to our results despite macroeconomic challenges. We remain committed to our innovation drive and green growth acceleration, in line with our sustainability ambitions, while also delivering value to our stakeholders”.
