June 3, 2026/Cordros Report

In this note, we update our 2026E estimates and outlook for Lafarge Africa Plc (WAPCO) following the release of its Q1-26 results.  We now forecast 2026E revenue growth of 33.2% y/y (Prev.: +26.1% y/y), alongside EBITDA margin expansion of 396bps y/y to 44.0% (Prev.: +10bps y/y to 40.1%) and EPS growth of 60.6% y/y to NGN27.23/s (Prev.: +31.5% y/y to NGN22.30/s). The upward revision to our estimates primarily reflects a stronger demand outlook, with sales volumes now projected at 7.25 million tonnes (Prev.: 6.98 million tonnes), supported by increased fiscal spending, uptick in infrastructure & construction activities, and sustained demand for premium cement products. Profitability is also expected to benefit from ongoing cost efficiency initiatives, including increased use of alternative fuels and CNG trucks. Accordingly, we raise our target price to NGN368.25/s (Prev.: NGN240.54/s), implying an upside potential of 7.7% relative to the current market price of NGN342.00/s, and reiterate our “HOLD” rating on the stock. That said, we believe additional upside could emerge from further improvements in working capital efficiency, lower capex intensity (<25.0%), and stronger free cash flow conversion. Based on our revised 2026E estimates, WAPCO is currently trading at 12.6x P/E and 8.2x EV/EBITDA, vs. MEA peer averages of 15.0x and 11.5x, respectively.

Higher volume assumptions lifts earnings forecast: We revise our 2026E revenue growth forecast upwards to 33.2% y/y (Prev.: +26.1% y/y), reflecting higher projected sales volumes (+15.0% y/y to 7.25 Mt | Prev.: +10.8% y/y to 6.98 Mt) alongside an uptick to our price assumption (+15.8% y/y to NGN196,000.00/tonne | Prev.: +13.8% y/y to NGN192,500.00/tonne). At the same time, we now forecast a 23.3% y/y increase in COGS (Prev.: +24.6% y/y). The downward revision to our cost growth assumptions reflects lower projected production fixed costs (+21.7% y/y vs. +44.4% y/y prior) and maintenance expenses (+22.1% y/y vs. +40.2% y/y prior), which offset upward revisions to our energy cost (+14.5% y/y vs. +7.0% y/y prior) and raw material cost (+42.4% y/y vs. +37.7% y/y prior) assumptions. Consequently, we now expect EBITDA margin to expand by 396bps y/y to 44.0% (Prev.: +10bps y/y to 40.1%). Finally, we now forecast EPS growth of 60.6% y/y to NGN27.23/s (Prev.: +31.5% y/y to NGN22.30/s).

Free cash flow now expected to remain positive: We now expect WAPCO to maintain positive free cash flow generation in 2026E despite elevated expansion related capex. Our revised expectations reflect stronger OCF projections, supported by improved profitability and better working capital management. Specifically, we now forecast OCF of NGN474.35 billion (Prev.: NGN384.63 billion), while we revise our capex expectations lower to NGN390.52 billion (Prev.: NGN403.30 billion), reflecting a more moderate pace of expansion spending. Consequently, we now forecast free cash flow of NGN83.83 billion (FCF margin: 5.9%) in 2026E, compared to our prior expectation of negative NGN18.67 billion (FCF margin: -1.4%).

Valuation: Our target price is NGN368.25/s, derived from a 50/50 blend of DCF and sector relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN302.20/s) and FCFE (NGN292.96/s) estimates, assuming a 22.0% WACC, and a 4.0% terminal growth rate. Similarly, our multiple based FV was derived from a blend of EV/EBITDA (NGN469.33/s) and P/E (NGN408.50/s) estimates, utilising MEA peer averages for both factors (11.5x and 15.0x, respectively) as multipliers.

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The International Finance Corporation (IFC), Nigerian Exchange Group (NGX Group), and the Lagos Chamber of Commerce and Industry (LCCI) have unveiled the Nigeria Gender Country Program (NGCP) at a high-level virtual CEO Roundtable convened to advance private sector action on gender equality and inclusive economic growth.

The session brought together chief executives and senior business leaders from NGX-listed companies, IFC client organisations, and LCCI member companies to introduce the programme’s strategic framework, align stakeholders around a shared agenda, and mobilise support ahead of its formal launch.

The NGCP builds on the momentum of Nigeria2Equal and other initiatives that have advanced workplace inclusion, women’s leadership, entrepreneurship, and sustainable finance across Nigeria’s private sector. Designed as a more integrated and collaborative platform, the programme seeks to scale impact through coordinated action among development institutions, business leaders, regulators, and the organised private sector.

Anchored on three strategic priorities, the programme aims to increase women’s representation in leadership, improve access to quality employment, and expand access to productive assets—including finance, technology, and markets—for women and women-led businesses.

Delivering the keynote address, Dr. Emomotimi Agama, Director General of the Securities and Exchange Commission (SEC), underscored the private sector’s critical role in accelerating gender-inclusive growth.

“Gender inclusion is fundamentally an economic growth imperative. Closing gender gaps can unlock billions of dollars in value for Nigeria while strengthening business performance and national competitiveness. We must therefore move beyond viewing inclusion as a corporate social responsibility initiative or compliance exercise, and instead recognise it as a strategic driver of productivity, innovation, and sustainable economic growth,” he said.

Commenting on the initiative, Temi Popoola, Group Managing Director/Chief Executive Officer of NGX Group, described the NGCP as a strategic platform for scaling women’s economic participation through stronger collaboration among the private sector, development institutions, and market stakeholders.

“The Nigeria Gender Country Program presents a significant opportunity to deepen impact and accelerate progress across corporate Nigeria. By expanding women’s access to leadership opportunities, quality employment, finance, technology, and markets, we can unlock substantial economic value while building a more competitive, inclusive, and resilient private sector. At NGX Group, we believe the capital market has a critical role to play in advancing these outcomes through stronger governance, transparency, and stakeholder engagement,” he said.

Also speaking at the session, Christian Mulamula, IFC Head of Office in Lagos, highlighted the strong business case for gender inclusion.

“Closing the gender gap is one of the most significant opportunities to strengthen competitiveness and productivity. Across Africa, gender inequality is estimated to cost up to $2.5 trillion. Through the Nigeria Gender Country Program, IFC is working with the private sector to expand women’s leadership, improve access to better jobs, and increase opportunities for women-led businesses. Building on Nigeria2Equal, this initiative focuses on practical, measurable solutions that help businesses grow while advancing inclusive growth,” he said.

In her remarks, Dr. Chinyere Almona, Director General of LCCI, noted that the programme’s success would depend on leadership accountability and sustained commitment from business leaders, particularly in embedding gender inclusion into organisational strategy and execution.

The partners are expected to formally launch the Nigeria Gender Country Program at a physical event scheduled for July 9, 2026, where stakeholders will further advance implementation of the programme’s strategic priorities.

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June 3, 2026/Cordros Report

EQUITIES

The domestic bourse posted its third consecutive loss as the losses in MTNN (-7.0%), WAPCO (-10.0%), and FIRSTHOLDCO (-6.8%) drove a 1.4% decline in the All-Share Index to 243,132.61 points. Consequently, the Month-to-Date and Year-to-Date returns settled lower at -2.9% and +56.2%, respectively.

The total volume traded advanced by 57.1% to 922.97 million units, valued at NGN42.27 billion, and exchanged in 69,332 deals. STERLINGNG was the most traded stock by volume at 264.59 million units, while MTNN was the most traded stock by value at NGN17.61 billion.

Sectoral performance was broadly bearish as the Insurance (-2.8%), Industrial Goods (-1.6%), Banking (-1.5%), Consumer Goods (-0.3%) and Oil and Gas (-0.1%) indices declined.

As measured by market breadth, market sentiment was negative (0.3x), as 14 tickers gained relative to 43 losers. WAPCO (-10.0%) and ZICHIS (-9.8%) recorded the highest losses of the day, while ABBEYBDS (+9.9%) and INTENEGINS (+9.9%) led the gainers.

CURRENCY

The official FX rate appreciated by 0.1% to NGN1,363.00/USD.

MONEY MARKET & FIXED INCOME

The overnight lending rate expanded by 2bps to 22.2%, following debits from OMO PMA (NGN3.04 trillion).

The Treasury bill secondary market traded on a bullish note as the average yield contracted by 2bps to 17.5%. Across the curve, the average yield contracted at the short (-1bp), mid (-1bp) and long (-2bps) segments due to the demand for the 92DTM (-1bp), 169DTM (-15bps) and 323DTM (-25bps) bills, respectively. Similarly, the average yield contracted by 6bps to 20.9% in the OMO segment.

The FGN bond secondary market traded on a bearish note, as the average yield expanded by 11bps to 15.9%. Across the benchmark curve, the average yield expanded at the short (+25bps), mid (+2bps), and long (+5bps) segments following selloffs of the MAR-2027 (+113bps), JUN-2033 (+9bps) and JUN-2038 (+38bps) bonds, respectively.

Kindly see below our Mutual Fund prices and returns as of today.

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