HALF YEAR RESULTS: LA FARGE AFRICA's TEARS

It is no more news that La Farge Africa PLC is one of those companies shedding tears because of blows from Naira floatation. That is because it sounded the alert recently but how painful is the wound inflicted?

Well from the mid year figures released last week, it was a blow that landed when La Farge Africa was trying to take control in the wake of difficult 2015.

The figures indicate that the Group was battling with increase in expenses by 12.9% to N12217.7m and cost of sale by 5.89% to N92225.1m while revenue decreased by 29.4% to N107364.8m when the blow from the Naira landed.

Added to these pressures was the leap in finance charges to N4559.4m from N1757.3m and left alone, it even looked set to land La Farge in loss but a manageable one.

Then bang! Within the half year loss from other operations that was N7550.4m by 2015 first half, rose to N28547.7m because of potential losses from Naira devaluation.

Potential because it will surface as the loans denominated in dollars are serviced and repaid on schedule. It could in fact be higher if the Naira continues to depreciate.

Hence for now, La Farge Africa is grappling with N1.21 loss on each N100 income compared to N20.3 gain previously.

The threat to continuing existence is real too just by looking at the N45460.7m deficit working capital compared to N15510.9m deficit same time in June.

So it looks, La Farge Africa, one of the companies that saved Nigeria from cement armada of yesteryears needs some support now like so many manufacturers hit by the free float of the Naira. If not, well the worst is yet to come.

LA FARGE AFRICA: Nbn
                 Half year
                   2016.       2015
Revenue    107.4.     152.2
Cost of sale 92.2.      98.0
Overhead     12.2.      14.0
Other inc.     28.5.      7.55
Fin. Cost      4.56.      1.76
Profit          (30.2).    30.8
Margin %  (1.21).      20.3
Working cap. (45.5) (15.5)

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