Culled—Proshare
July 28, 2020
by Proshare Research
Key Highlights
- The firm’s revenue grew by 2.3% in H1 202o while it dropped by -5.1% in Q2 2020
- Finance cost dropped by 67% to N4.43bn in H1 2020 from N13.33bn in H1 2019.
- Its PBT grew by 86% to N28bn while its PAT also grew by 156% to N23.33bn in H1 2020.
- Operating margin expanded in Q2’20 as a sharp contraction in office and general expenses bolstered the impact of cost-efficiency
- Net asset dropped slightly by -0.24% in Q2 2020 compared to Q1 2020 while it improved by +54.60 YoY in Q2 2020 compared to Q2 2019.
Revenue and Product Line Review
Lafarge Africa Plc grows revenue by 2.3% in H1 2020. The revenue increased to N120.5bn in H1 2020 from N117.9bn in H1 2019. However, the firm recorded revenue of N56.8bn in Q2 2020 as against N59.9bn in Q2 2019. This represents a drop of -5.1% YoY.
The dip in earnings in Q2 2020 was driven by a decrease in the sales of Cement by -4% while revenue from the firm’s Aggregate and Concrete products also dipped by -64%.
Chart 1: Lafarge Africa Plc Revenue Q1 2019 – Q2 2020
Source: Proshare Research, Company Financials
Profitability
Lafarge’s Profit Before Tax improved by 86% in H1 2020 to N28.76bn from N15.45bn in H1 2019 while its PBT also grew in Q2 2020 to N19.4bn from N10.9bn in Q2 2019. This represents a growth of 78%.
Chart 2: Lafarge Africa Plc PBT Q1 2019 – Q2 2020
Finance Cost
Lafarge Africa’s finance cost remained relatively low in Q2 2020 compared to the corresponding quarter of Q2 2019. The YTD figure stood at N4.43bn in H1 2020 as against N13.33bn in H1 2019. This represents a 67% drop YoY. All through 2019, the firm’s finance cost has kept growing quarterly as it shuffled from N8.32bn in Q1 2019 to N20.18bn in Q4 2019.
Chart 3: Lafarge Africa Plc Finance Cost Q1 2019 – Q2 2020
Source: Proshare Research, Company Financials
Net Assets
Lafarge Africa’s net assets dropped slightly by -0.24% in Q2 2020 to N352.14bn compared to N352.98bn in Q1 2020. Year-on-year, its net assets improved by +54.60 to N352.14bn in Q2 2020 compared to N227.78bn in Q2 2019.
Chart 4: Lafarge Africa Plc Net Assets Q1 2019 – Q2 2020
Source: Proshare Research, Company Financials
Ratio Analysis
Current Ratio
Lafarge Africa remains highly liquid as its current ratio stood at 71.6% in Q2 2020 as against 91.68% in Q1 2020 and 75.31% in Q2 2020 respectively. However, its current ratio relatively below the figure for the two comparing periods.
Chart 5: Lafarge Africa Plc Current Ratio Q1 2019 – Q2 2020
Source: Proshare Research, Company Financials
Acid Test Ratio
Its acid test ratio stood at 45% in Q2 2020 from 46% in Q1 2020 and 42% in the corresponding quarter of Q2 2019. This further buttressed the current ratio as it suggests that the firm has enough liquidity to meet its short-term debt.
Chart 6: Lafarge Africa Plc Acid Test Ratio Q1 2019 – Q2 2020
Source: Proshare Research, Company Financials
Share Price Movement
The share price of Lafarge Africa has so far shed -14.29% YTD as against -7.67% YTD loss recorded by the NSEASI as of July 27th, 2020. This shows that the share price of WAPCO has underperformed the ASI by 6.62% so far in 2020.
In the last one year, the share price has recorded -16.67% loss.
Chart 6: Lafarge Africa Plc One Year Share Price Movement
Source: Proshare MARKETS
Key Financials & Statistics
Source: Proshare Research, Company Financials
