Lafarge Africa Plc (WAPCO) demonstrated robust resilience in 2024FY despite significant macroeconomic headwinds, delivering strong revenue growth and overall financial performance. The company effectively managed costs and drove bold innovation, launching three new products during the year. We believe the company will continue this profitability trajectory. WAPCO's profitability is expected to continue its positive trend in 2025FY, driven by projected increases in sales volume stemming from F...
For the first quarter, Lafarge recorded strong revenue growth of 50% y/y to ₦137.7 billion, driven by improved sales volumes, and higher cement prices. On the other hand, cost of sales increased by 59% y/y to ₦72.1 billion. Despite management’s efforts to rein in the cost pressures, cost of inputs such as fuel, power, and raw materials (+61% y/y: ₦45.5 billion) was exacerbated by the rising inflationary pressures and the continuous weakening of the currency. In light of this, gross margin ...
H1:2023 financial statement for Lafarge Africa Plc. revealed a 5.95% YoY growth in revenue to NGN197.68bn. On the other hand, production cost of sales (adjusted for depreciation) rose marginally by 2.94% YoY to NGN81.02bn while total operating costs (ex-dep) advanced 9.76% YoY to NGN51.14bn. Despite the surge in finance income (+2,215.32% YoY to NGN4.44bn) and consequently, improvement in Profit Before Tax (PBT), Profit After Tax (PAT) declined by 5.16% YoY to NGN35.48bn. We associate the declin...
Higher Tax Obligations Overshadow Decent Cost Minimization Strategy Cash Crunch and Electioneering Activities Suppress Topline Growth Lafarge Africa Plc. witnessed a tepid growth in Revenue amid Domestic headwinds. The major cement players (DANGCEM, BUACEMENT and LAFARGE) were not immune to the adverse effects of Naira scarcity and political uncertainty that prevailed during Q1:2023. Revenue grew marginally by 1.34% (YoY) to NGN91.82bn (vs NGN90.60bn in Q1:2023). On the other hand, Profit Afte...
Burgeoning Cost Shear Bottom Line Growth FX Scarcity, Elevated Prices Erode Topline Growth Lafarge Africa Plc. witnessed significant increase in Revenue in 2022FY, as topline grew by 27.3% (YoY) to NGN373.25bn (vs NGN293.09bn in 2021FY). This is on the back of upward price review during the year. For clarity, Cement sales grew 27.0% YoY while sales of Ready mix and Other Products surged 41.7% YoY in 2022FY. On the 19th 0f August 2022, during a chat with the CFO, he stated management’s plan to ...
Lafarge Africa PLC recently released its unaudited H1’22 results, reporting an impressive bottom-line growth of 32% y/y to ₦37.4 billion, supported by strong and rising cement demand and reduced finance costs. Higher input costs constrain marginsLafarge recorded double-digit revenue growth for the sixth consecutive quarter, with a significant jump of 31% y/y in topline for the Q2’22 period, consolidating Revenue for the H1’22 period at ₦186.5 billion. The positive topline performance ...
Lafarge Africa PLC recently released its unaudited Q1’22 results, reporting a strong bottom-line growth of 92% to ₦17.5 billion, underpinned by sustained volume growth and strong demand.The current administration’s plan to complete construction activities ahead of the election period and the sustained demand for housing infrastructure supported cement volumes during the period, buoying topline by 27% y/y to ₦90.6 billion. On the other hand, cost of sales jumped by 20% y/y to ₦48.4 billion,...
Cost Optimization supports topline growthFor the Q4 period, revenue came in 46% higher y/y at ₦73.8 billion culminating in a 27% y/y growth in FY’21 Revenue to ₦293 billion. The strong topline growth was supported by increased sales volumes (sales grew 6.1% higher y/y, driven by public and private sector demand as well as the releasing of 700,000 tonnes of previously constrained production capacity at the Ewekoro and Ashaka plants) and a 19.2% increase in average cement price.Although cost...
Overall cement sales by the three key players in Nigeria increased 11% over 9M 2021 to 22mt, from 20mt last year. This was just above our expectation of 10% for the period. The high growth rate was aided slightly by the low base over the first half of 2020, during the peak of the Covid lockdown. In Q3 21, cement sales declined 3% yoy to 6.8mt (in line with our forecast), due to the unusually high cement sales in Q3 last year which were boosted by the post Covid recovery and unusually light ra...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
We update our model following the release of Lafarge Africa's Q1 21 result. The major adjustments include the upward revision in our revenue per tonne and cost per tonne estimates. This left a net zero impact on our model, as our target price was left unchanged at NGN32. We reiterate our Buy recommendation on the stock with an expected total return of 58%, which includes a dividend yield of 5% (assuming NGN1 dividend/share) based on current pricing of NGN20.85. Our adjusted FY 21 EPS forecast...
Earnings lifted by strong volume and operating efficiency Lafarge Africa Plc. recently released its Q1’21 financial scorecard, showing an impressive YoY growth in top line and bottom line by 12.21% and 13.26% to N71.47bn and N9.14bn respectively. A closer look at the result revealed that revenue was primarily supported by increased volumes as gross margin weakened by 96bps YoY to 26.71% while gross profit expanded by 8.32% over the same period. We suspect the lingering inflationary cost press...
In this report, we highlight our positive outlook on Nigeria's cement market. The country's large infrastructure and housing deficits, combined with current low cement consumption per capita, paint a positive picture for the sector. The sharp recovery in Nigeria's cement consumption post-Covid was impressive, taking both producers and analysts by surprise. Cement volumes rose 13% yoy to 26Mt in 2020, and demand was (and still is) so strong that many of the cement distributors (not producers) ...
Nigeria’s cement market remained resilient post-Covid, according to our market sources and Lafarge Africa’s rep. Lafarge Africa’s Q3 20 results showed an impressive growth in sales by 31% yoy to NGN59bn, driven solely by volume growth (+30% yoy to 1.3mt). The impressive volume growth was despite Lafarge’s plant maintenance shutdown in the quarter, as minimal rains in the typically heavy rainy season fostered construction activities. However, the growth in top line did not cascade as strongly ...
We find that the value in Lafarge Africa (WAPCO NL) has deepened significantly since the decoupling of its South Africa business in July 2019 and since the change in the company’s CEO in January 2020. We update our numbers, which translate to an increase in our target price to NGN31 from NGN25. Apart from the 167% upside from current market price and a potential dividend yield of 13% (assuming 70% payout), the stock also trades quite cheap on multiples. The deep value in WAPCO is evident in t....
Lafarge Africa reported post divestment PAT of NGN4.73bn in Q3 19, against a loss of NGN6.47bn in Q3 18, which included its South Africa subsidiary. The company’s performance is currently ahead of our FY 19 forecast largely due to its stronger-than-expected EBITDA margin (32.7%), versus our expected 24.2% for the full year.
Q3'19 Earnings Preview Coming off a strong 2018, the Nigerian cement market has continued to expand in the first half of 2019, largely supported by private sector demand. However, when compared to the c.11% growth in cement sales in 2018, 2019 kicked off at a slower pace. Cement sales in H1’19 were estimated to be 11.5 million MT, up a mild 3% y/y amidst a dearth of public sector expenditure. We expect weak cement consumpt...
Nigeria H2'19 Outlook - Feeble feet on thorny grounds Narrow opportunity window amid easing global monetary conditions: A sense of urgency is required for Nigeria to derive optimal benefits from the sudden increase in global liquidity conditions occasioned by the switch to accommodative monetary policy by central banks in developed markets. IMF projections indicate, that global GDP growth could ease to 3.3% for FY’19 due to weaker growth in the...
Lafarge Africa reported PAT of NGN9.0bn in H1 19, versus a loss of NGN3.9bn in H1 18. The group’s performance is currently ahead of our FY 19 forecast of PAT at NGN11.9bn, excluding the pending sale of Lafarge South Africa Holdings (LSAH). Lafarge Africa’s performance was largely driven by: 1) the improvement in EBITDA margin to 23.8% from 17.1% in H1 18 and, 2) the 41% yoy decline in finance cost on the back of the recently completed NGN90bn rights issue, which contributed to the 25% declin...
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