Lafarge Africa PLC - Lower pricing stings Q1 earnings
WAPCO reported a loss after tax of N1.9 billion in Q1’16 results following a disappointing performance across Group operations. WAPCO appears to have lost some market share over the period as volume across its Nigeria operations was down 5% y/y to 1.7 million MT. WAPCO operations volume was down 4% y/y following plant maintenance, AshakaCem volume up 12% y/y amidst stable plant operations whilst UNICEM volume down 12% y/y. We note that rival, DANGCEM, grew volume by 45% y/y over the same period. Nigeria revenue performance over the quarter was much weaker in context, down 30% y/y to N39 billion as the impact of the price cut implemented by DANGCEM (Sept 2015) became more apparent. We think WAPCO delayed on implementing the price adjustment, and imagine that this could have driven the loss in market share. The South African subsidiary (LSAH) continued to face competitive pressure from new entrant with the region contributing 58% of Group loss reported for the period.
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