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Lafarge Africa annual profit surges by 98.8% to N30.8 billion in 2020

Lafarge Africa Plc declared a 98.8% year-on-year growth in profit.

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Lafarge Africa Plc, one of the largest manufacturers of cement in the country recently declared a 98.8% year-on-year growth in profit to N30.8 billion for the financial year of 2020, when compared to the N15.5 billion reported in 2019.

This strong bottom-line growth can be linked to the cost optimization strategy deployed by the cement maker to reduce loss arising from unproductive assets.

This move led to the improvement in the company’s recurring EBIT margin (Earnings Before Interest and Taxation), as it increased from 16% in 2019 to 20% in 2020.

Lafarge’s revenue expanded by 8.3% year-on-year to N230.6 billion, driven by the strong demand for cement. The growth in the company’s revenue arising from the sales of cement offset the decrease in revenue from the sales of aggregates and concrete in 2020.

  • Revenue generated from the sales of cement increased by 9.14%, while the revenue Lafarge generated from the sales of aggregate decreased by 25.47%.
  • The company’s earnings per share increased by 98.9% year-on-year, from 96 kobo to 191 kobo.
  • Free Cash Flow (FCF) increased by 2.6% year-on-year to N47.4 billion from N46.2 billion.
  • In line with this, Lafarge announced a N1.00 per share dividend for the shareholders, subject to appropriate withholding tax and approval at the company’s AGM on Friday 30th April 2021.
  • The cement company generated a net cash flow of N63.74 billion from its operating activities lower than 2019 figures (N80.23 billion).

Commenting on the company’s financial performance Khaled El Dokani, CEO of Lafarge Africa stated:

Our “HEALTH, COST & CASH” action plan delivered results in 2020 amidst the COVID-19 pandemic, which triggered inflationary and Naira devaluation pressures and production challenges.”

Full-year 2020 results remained resilient, with net sales of +8.3%, recurring EBIT of +30.8% and net income of +98.8%. We are proud of our people, who stand with our communities, and of our sustainability commitments to accelerate the net-zero pledge through affordable clean energy and our agri-ecology footprint.”

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Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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Markets

Bulls enjoy slight victory at the NSE

The NSE ASI saw a bullish move supporting Wednesday’s gains and showing bullish dominance since the start of the week.

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The Nigerian Stock Exchange market posted gains at the end of the trading session today, making it the fourth day of a bullish run. The All-Share Index increased by +0.01% to close at 39,131.80 from 39,128.34 index points. CUTIX made the top of the gainers list.

  • Nigerian Stock Exchange market value currently stands at NGN 20.48Tr. Its Year-to-Date (YTD) returns currently stands at – 83%.
  • The market closed in profit as CUTIX led 17 Gainers, and 15 Losers topped by EKOCORP with a slightly bullish movement by the NSE ASI.

Top gainers

  1. CUTIX up +7.00% to close at N2.14
  2. PZ up +6.93% to close at N5.40
  3. LINKASSURE up +5.00% to close at N0.84
  4. COURTVILLE up +4.35% to close at N0.24
  5. OANDO up +3.96% to close at N3.15

Top losers

  1. 1. EKOCORP down -10.00% to close at N5.40
  2. SUNUASSUR down -9.09% to close at N0.60
  3. HONYFLOUR down -8.45% to close at N1.30
  4. SOVRENINS down -8.00% to close at N0.23
  5. UNITYBNK down -6.78% to close at N0.55

Outlook

The NSE ASI saw a bullish move supporting Wednesday’s gains and showing bullish dominance since the start of the week.  However, the following stocks are on our watchlist: PZ, Guaranty, Access bank, STANBIC, HONYFLOUR, GUINNESS and Flourmills.

  • Nairametrics advises cautious participation in the stock market in this era of growing uncertainties.

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Markets

The NSE Banking Index plunges as Zenith Bank dips

The NSE Banking Index trended bearish at the end of the trading session today; 5 gains were posted opposing 3 losses and 2 stalemates.

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The NSE Banking Index trended bearish at the end of the trading session today; 5 gains were posted opposing 3 losses and 2 stalemates. The Index finished in the red with a loss of -0.04% pushing the Index point down to 357.76 from 357.89

UBA topped the gainers with a +2.07% increase. Technical analysis showed that UBA share price saw a noticeable upward trend from the start of the trading session pushing the price from its previous day’s close of N7.25 to N7.40.

Wema bank also posted gains of +1.75% pushing the price from the previous day’s close of N0.57 to N0.59 at today’s close of market. Wema Bank technical analysis shows a slightly correlated trend with that of UBA for today’s trading session.

EcoBank saw a +1.01% gain at the end of the trading session today. Price was moved from its previous gains of N4.95 to N5.00 showing a N0.05 increase that was sufficient enough to earn EcoBank 4th place on the gainers’ side at the end of the trading session today.

Access Bank escaped the bear’s claws with a +0.67% profit at the end of the trading session, technical analysis shows massive consolidation today before price moved from N7.50 to N7.55.

GTBank was also saved after posting a profit of 0.16% pushing the price to N31.30 from its previous N31.25.

Fidelity Bank held top spots on the losing side of today’s trading session with a noticeable decline from -1.77% pushing the price downwards from N2.26 to N2.22.

Jaiz Bank saw a noticeable bearish turn of -1.59% holding the price at N0.62 from N0.63.

Zenith Bank was next to feel the claws of the bear as it took a hit of -1.35% pushing price downwards from N2.30 to N2.00. Union Bank and Sterling Bank both saw a stalemate at the end of the trading session today to hold at N5.00 and N1.60 respectively.

SSKOHN

Outlook

  • Market sentiments indicate that tomorrow might see a bullish recovery with 6 gainers being opposed to 3 losers and 3 stalemates.
  • Nairametrics advises cautious participation in the market amid growing uncertainties.

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