Lonrho Africa Plc Reports a Full Year Pretax Loss

Lonrho Africa Plc 03-29-2007

Lonrho Africa plc (LAF) reported a full year pretax loss of £0.1m compared with a £2.2m profit the previous year.

This translated to a loss of 0.1 pence per share compared with earnings per share of 1.3 cents previously.

David Lenigas, Executive Chairperson and CEO of Lonrho, said: "In 2007 Lonrho will continue to target investments in lead sectors alongside interlinked opportunities and anticipates strong growth from its existing investments."

Lenigan said: "This year Lonrho has been strongly acquisitive and made a number of key investments in its target sectors. The Board believes that to create value for shareholders it needs to re-build what is already a well recognized brand with a strong reputation in Africa."

Lenigan said the dual-listed group's aim was to create hubs of business where the company already had key in-house financial and management expertise, through its key infrastructure projects, and to build up linked investments in emerging sectors across a resurgent Africa.

To date, this approach has led to a portfolio of interests in primary infrastructure projects, such as the Luba Freeport; in infrastructure support services, with two air carriers; a legacy investment in the Hotel Cardoso in Mozambique and investments in two developing mining companies.

"Lonrho is looking to invest in infrastructure projects throughout Africa that will benefit businesses and communities alike, and allow the Company to build hubs from them. We believe that infrastructure projects can be divided into hard asset and support services categories."

In May, Lonrho acquired 63% of Luba Freeport Limited in Equatorial Guinea which it is developing into the premier West African hub for both oil and gas, and transhipping.

"Luba represents our flagship investment to date. Luba presently serves most major oil companies in the region as a one-stop facility. We have commenced construction of a 60 000m² logistics facility for Mobil Equatorial Guinea Inc (MEGI) part of the world's largest oil company, ExxonMobil.

"Lonrho has also begun an extensive expansion program to improve quay-space and port facilities, employing Jurong Primewide, world leaders in port design and construction, and retaining Mace International, project management consultants to London 2012.

"We have already made strong inroads in the transportation sector. We have made our first foray into Kenya under the new strategy with an investment in Fly540, a new low cost airline based in Nairobi.

"This project offers strong expansion possibilities, as the number of passengers grows due to increased tourism and business travel in the region. We have ambitions to grow Fly540 into an international carrier servicing Eastern Africa by the end of 2007.

Lonrho also invested in Norse Air, an aviation business based in Mauritius and South Africa, with operations across the continent.

Lenigan said Lonrho believes that aviation fits well into its strategy as it strives to make investments that will positively impact on African business and communities alike.