ABUJA, May 19 – Lafarge Africa 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 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)