Lafarge Africa Plc H1 2020 Result: A Fall In Expenses Buoy Earnings

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Tuesday, July 28, 2020 / 2:01 PM / by Proshare Research / Header Image Credit: Business Day

 

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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

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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

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Source: Proshare Research, Company Financials

 

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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

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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

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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

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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

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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

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Source: Proshare MARKETS

 

Key Financials & Statistics

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Source: Proshare Research, Company Financials

 

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Related News - Cement Sector

  1. Nigeria Cement Market's New Chess Play; Understanding The Market Dynamics
  2. Nigeria's Cement Market Battles: Lafarge Africa Plc in Focus
  3. Nigeria's Cement Market Battles: Dangote Cement in Focus
  4. Nigeria's Cement Market Battles: CCNN in Focus

 

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Related News - Lafarge Africa Plc

  1. Lafarge Africa Plc Declares N23.33bn PAT in Q2 2020 Results, (SP:N10.95k)
  2. Lafarge Africa FY'19 and Q1'20 Results Review: Pre-tax Earnings Improves as Finance Cost Drops
  3. WAPCO Declares N8.1bn PAT in Q1 2020 Results,(SP:N10.70k)
  4. WAPCO To Hold 61st Annual General Meeting on June 3, 2020; Attendance By Proxy
  5. Mr. Mobolaji Balogun Retires as WAPCO Board Chairman; Appoints Adebode Adefioye As Replacement
  6. Lafarge Africa Plc FY'20 - Coronavirus: A Spanner in the Works?
  7. WAPCO Notifies Of Board Changes
  8. WAPCO Notifies of Board Meeting And Closed Period For Q1 2020
  9. New Lafarge Africa CEO Khaled El-Dokani Visits NSE, Assures Market Of Optimum Performance
  10. WAPCO Declares N15.5bn PAT in 2019 Audited Results; Proposes N1.00k Final Dividend; (SP:N8.95k)
  11. WAPCO Notifies of Board Meeting and Closed Period
  12. Lafarge Africa Plc Notifies of The Resignation of Mr. Jean-Philippe Benard From Its Board
  13. Michel Puchercos Resigns As GMD Of Lafarge Africa Plc; Appoints Khaled Abdelaziz El Dokani
  14. Lafarge Africa Q3 2019 Results Review: Shares Significantly Undervalued
  15. Lafarge Africa Appoints Lolu Alade Akinyemi As CFO
  16. Lafarge Africa Plc Q3 2019 - LSAH Sale... Good Riddance
  17. Lafarge Africa Plc 9M 2019 - Reaping Benefits of LSAH Sale
  18. Lafarge Africa Declares N20.57bn PAT in Q3 2019 Results,(SP:N14.70k)
  19. Alleged SEC Probe of Lafarge Africa: We Are Not In Receipt Of Any Letter From SEC - Lafarge
  20. Lafarge Africa Plc Rescheduled Court-Ordered Meeting To Hold On August 23rd, 2019
  21. Bruno Bayet Resigns As CFO Of Lafarge Africa Plc
  22. WAPCO Declares N9.01bn PAT in Q2 2019 Result,(SP:N13.10k)
  23. WAPCO to Hold 60th AGM on July 22 2019
  24. WAPCO Announces Delay in Filing of the Company's Q1 2019 Unaudited Financial Statements
  25. WAPCO Declares N2.0bn Loss in Q1 2018 Result,(SP:N45.95k)

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