Lafarge Africa Plc. (WAPCO) made an impressive comeback in 2020, retuning to growth after two consecutive years of revenue decline. The company demonstrated its resilience in navigating the tough business environment (caused by COVID-19) as it grew sales volume by 5.70% YoY. In spite of the 25.47% dip in sales from the aggregate and concrete segment, a 9.14% growth in the cement segment and NGN102.28mn realized from sale of mortar amounted to a total revenue of NGN230.57bn – up 8.25% from NGN213.00bn in 2019FY. The strong performance comes on the back of the company’s improved route-to-market, the relatively short rainy season and the gradual pick up in economic activities post-lockdown. However, we note that the company had some production challenges in Q4:2020, which led to the plodding growth (+1.51% YoY) in revenue for the quarter. In 2021, we do not expect further operational disruptions following management’s guidance that the challenges has been resolved. Also, we expect strong cement demand in Nigeria, given the modest improvement in macroeconomic conditions and the higher allocation to Government CAPEX. Going forward, we see the company pulling its weight in the industry, through its continuous efforts towards improving its route-to-market and upon the debottlenecking of its plants. Thus, in 2021FY, we project a revenue of NGN251.65bn – an improvement of 9.14% YoY.
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