May 4, 2026/InvestmentOne Report

Lafarge Africa Plc delivered a robust 34.84% YoY increase in revenue to NGN334.88bn, with earnings advancing by 101.37% YoY, supported by strong sales performance, hinged on improved volumes, enhanced plant stability, and distribution efficiency. Consequently, earnings per share expanded to NGN6.08 in Q1:2026, from NGN3.02 in the corresponding period of 2025.  Meanwhile, Cost of sales (COS) rose modestly by 3.20% YoY to NGN129.39bn, reflecting favourable pricing dynamics which further supported the topline expansion.

A breakdown of COS showed that production variable cost increased by 2.60% YoY to NGN88.47bn, while maintenance fixed cost rose by 21.60% YoY to NGN12.24bn. In contrast, production fixed cost declined by 11.10% YoY to NGN19.15bn. Following the relatively muted COS growth amid strong revenue expansion, gross profit surged by 67.10% YoY to NGN205.49bn, with gross margin expanding by 1,184bps to 61.36% in Q1:2026.

We expect Lafarge Africa Plc to sustain its strong performance in 2026, as it leverages Huaxin Building Materials Ltd industrial and technical expertise to further improve operations and unlock efficiency gains. In addition, we anticipate strong consumer demand for cement, underpinned by continued market expansion from Nigeria s infrastructure and construction sector. Notably, Lafarge Africa Plc remains focused on capturing volume growth opportunities across its operating markets, while maintaining cost discipline to preserve margins.

Ongoing expansion projects at the Ashaka plant in Gombe State and the Sagamu plant in Ogun State are progressing steadily and are expected to support medium to long term capacity growth. Upon completion, installed capacity at Ashaka and Sagamu is projected to reach 2.00MMTPA and 3.50MMTPA, respectively, potentially lifting the group s total capacity to 14.00MMTPA. Accordingly, we place a STRONG BUY rating on WAPCO, supported by its solid growth outlook, improving operational efficiency, and sustained demand tailwinds.

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