Rating Release
Agusto & Co. hereby affirms the Aa- rating assigned to Lafarge Africa Plc
The rating expires on 30 June 2024.
Agusto & Co. hereby affirms the Aa- rating assigned to Lafarge Africa Plc (“Lafarge”, “LAP” or “the Company). The rating reflects the Company’s strong and sustainable cash flow upheld by favourable payment terms with customers and suppliers, as well as its adequate working capital supported in part by its good equity funding buffer, low leverage and satisfactory profitability. The rating also takes cognisance of Lafarge’s leading position in Nigeria’s cement industry, its diversified portfolio of innovative building products and wide distribution network. Furthermore, the rating considers the Company’s qualified and experienced management team as well as the strong parental support it enjoys from Holcim Group (the world’s largest producer of cement). Nonetheless, the rating is tempered by the rising operating costs environment in Nigeria, exacerbated by the spike in energy prices, higher inflationary pressures and Naira devaluations with adverse impact on margins for cement operators. Lafarge Africa PLC is a member of Holcim Group (‘HCG’, ‘the Group’ or ‘Holcim’) – the world’s leading producer of building materials. HCG has a diversified portfolio of products including cement, aggregates, ready-mix concrete and asphalt amongst others and provides sustainable building solutions to a large customer base. The Group has a wide footprint in the global cement industry, with an installed capacity of 386.5 million metric tonnes per annum, operating across 80 countries. Holcim group is rated “Bbb+” by Standard and Poors and Baa1 by Moody’s with a stable outlook
