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Tag: Lafarge Wapco

  • Lafarge WAPCO to absorb UNICEM

    Lafarge WAPCO to absorb UNICEM

    Lafarge WAPCO Cement  has said it will take  control of United Cement Company of Nigeria. (UNICEM) to boost its market share.

    In a statement, the cement company confirmed that it has entered into an agreement with Flour Mills of Nigeria to purchase a 30 per cent stake in UNICEM.

    The deal will give Lafarge’s Nigerian Cement Holdings complete control of the country’s third-largest cement manufacturer. “Pursuant to the agreement, a first 15 per cent tranche would be acquired in the first quarter of 2015, while the second 15 per cent tranche is scheduled to be acquired by February 2016 at the latest,” Lafarge said.

  • Cement grade: Lafarge WAPCO slams SON over unfair regulation

    Cement grade: Lafarge WAPCO slams SON over unfair regulation

    The Managing Director of Lafarge WAPCO Nigeria, Mr. Joe Hudson has expressed regrets that the Standards Organisation of Nigeria (SON) has chosen to adopt an incorrect process in arriving at cement grades.

    Speaking at the pre-annual general meeting (AGM) of the firm in Lagos, he berated SON for reneging on agreement reached by all parties on cement grades, insiting that  for any change to take place, a process agreeable to all parties needed to be adopted and not taking a position meant to advance the interest  any of the concerned parties.

    While noting that there are three types of cement grades made for different purposes, Mr. Hudson took exception to a situation where people are compelled to buy a particular grade of cement for selfish reasons.He insisted that there are no substandard cement in the country.

    According to him, the much criticised 32.5 grade cement is the best suited for building construction and plastering especially with the reported 18 million housing deficit in the country.

    He said his firm actually first came up with the 42.5 grade with the introduction of power-mix used for heavy construction such as bridges and other specilaised constructions.

  • Lafarge introduces speed limit trucks

    Lafarge introduces speed limit trucks

    To control over speeding by its drivers, Lafarge has introduced trucks with particular speed limit to its haulage contractors.

    Lafarge WAPCO General Manager (SC) Olufemi Ransome-Kuti made this known at the launch of the Lafarge Drivers’ Academy at Lafarge Estate in Arigbajo, Ogun State.

    Ransome-Kuti said 80 per cent of the violations recorded are linked to over speeding, hence the need to procure trucks that would not drive beyond a particular speed limit.

    The event featured presentation of certificates to 30 drivers that graduated from the academy.

    “This set is just for the take-off, 1,500 drivers are expected to be trained by the academy. This is one of the measures taken by Lafarge to reduce accidents on the roads. We also control what they do outside, with monitoring functionality of the engine while driving through in-built device. Drivers tend to loose their mind and join peer group used to over speeding, so, we are trying to be one step ahead of them,” he said.

    Managing Director/Chief Executive Officer Managing Director/Chief Executive Officer Lafarge WAPCO Mr Joe Hudson said the company’s road safety performance is the best in the country.

    Having achieved this, Hudson said the company is looking forward to beat the international standard.

    The academy, he said, is critical to achieving the best for Lafarge drivers.

    Minister of Transport, Senator Idris Umar, called on other organisations that are into haulage to emulate Lafarge or partner with the company to reduce accidents on the roads.

    Represented by Olusegun Asekhamen, Senator Umar said the need for sanity on the roads is topmost priority of the ministry.

    He said efforts are being made to reduce pressure on the roads by modernising the railway sector that would cater for bulk cargoes.

    He described Lafarge initiative as laudable, saying the need for proper training of the drivers can never be over emphasised.

    “Most accidents on our roads are the direct results of carelessness, bad habit, and poor judgments on the part of our drivers which have resulted in colossal loss of lives of our people…” he said

  • Lafarge Wapco grows earnings by 92 per cent

    Lafarge Wapco grows earnings by 92 per cent

    Lafarge Cement Wapco Nigeria grew net earnings by 92 per cent last year, prompting the board of directors of the cement company to increase dividend payout by 175 per cent.

    The Board of Directors in a notice to investors indicated it has recommended increase in dividend per share to N3.30 for the 2013 business year as against N1.20 paid for the previous year.

    Key extracts of the audited report and accounts of Lafarge Cement for the year ended December 31, 2013 showed that profit after tax grew by 92 per cent to N28.2 billion in 2013 as against N14.7 billion recorded in 2012. Profit before tax grew by 30 per cent from N21.3 billion to N27.7 billion. Turnover increased by 12 per cent to N98.8 billion as against N87.9 billion in 2012. The company witnessed significant reduction in interest expenses N5.5 billion to N3.8 billion as a result of the reduction in interest charges due to the full repayment of the Naira syndicated bank loans. Consequently, basic earnings per share grew from N4.90 to N9.42; an increase of 92 per cent.

    Chairman, Lafarge Cement Wapco Nigeria, Chief Olusegun Osunkeye, said the latest earnings report shows a steady growth and demonstrates the strength of the company in delivering value to shareholders and to other stakeholders.

    Managing Director, Lafarge Cement Wapco Nigeria, Mr Joe Hudson, attributed the improved results to a strong focus on performance culture.

    According to him, the effective implementation of innovative and value adding solutions for customers had continued to differentiate Lafarge WAPCO from competition.

    Chief Financial Officer, Lafarge Cement Wapco Nigeria, Mr. Fred Amobi described the performance as a very good performance noting that it was a reflection of careful execution of the company’s various process and cost improvement strategies during the year.

    According to him, the cash management initiatives resulted in a very strong balance sheet.

    He assured that the company remains positioned to deliver value on its promise to shareholders.

    Lafarge, the parent company of Lafarge Cement Wapco Nigeria, has said it plans to double its production capacity in Nigeria as part of a new expansion programme that would see additional investments by the foreign majority shareholders in its Nigerian subsidiaries.

    Lafarge is the majority core investor in two publicly listed companies-Lafarge Cement Wapco Nigeria Plc and Ashaka Cement Plc, and Calabar-based Unicem.

    Executive Vice Chairman and Country Chief Executive Officer, Nigeria and Benin, Mr. Guillaume Roux, who noted that Lafarge had recently increased its capacity from three million metric tonnes to eight million metric tonnes, said the group would be making new investments in the next few years to double its capacity and strengthen its position as a leader in the Nigerian cement industry.

    He pointed out the historic importance of Lafarge Wapco as the oldest cement company in Nigeria and the operational spread of the group’s business from the south to the north adding that the expansions will also be across the regions.

    He underscored the importance of Nigerian market to the Lafarge global operations noting that the group has continuously demonstrated its commitments to the long-term development of its business and the Nigerian economy by sustained investments, development of new innovative solutions and building of Nigeria’s indigenous know-how and capacity.

    “We will make a lot of new investments in the next few years,” Roux said.

    He said contrary to recent speculations about presence of low-grade cement products in Nigeria, there could be no low-grade cement in the country as Nigeria has the most modern cement industry in Africa.

    He assured shareholders of good returns on their investments.

  • Analysts place ‘buy’ on Lafarge Wapco

    Analysts place ‘buy’ on Lafarge Wapco

    Lafarge Wapco Cement Nigeria Plc can still ride above its N96 per share all-time high share price to join the exclusive list of stocks with three-digit share prices, analysts have said.

    Experts at FSDH Merchant Bank said the cement manufacturing company still has an upside potential of some 21.08 per cent above its market price.

    They said Lafarge Wapco makes a good buy because of its fundamentals in recent period.

    Shareholders in Lafarge Wapco earned N2.02 in distributable earnings in the first three months of this year as the cement manufacturing company optimised marginal sales through increased cost efficiency.

    Interim report and accounts of Lafarge Wapco for the first quarter ended March 31, 2013 showed that basic earnings per share, the net earnings that could be distributed to shareholders if the company so decides, increased by 49 per cent to N2.02 as against N1.36 recorded in the comparable period of 2012.

    The report showed marginal sale growth of 3.1 per cent, but improved cost management leveraged pre and post-tax profits by 21 per cent and 49 per cent respectively.

    Turnover stood at N23.32 billion in the first quarter of 2013 as against N22.61 billion in comparable period of 2012. Profit before tax rose from N5.96 billion to N7.2 billion. Profit after tax also increased from N4.1 billion to N6.1 billion.

    Market analysts indicated that the first quarter report underlined a robust outlook for the cement company, which recently announced 107 per cent increase in net earnings for the 2012 business year.

    Audited report and accounts of Lafarge Wapco for the year ended December 31, 2012 showed that profit before tax doubled from N10.3 billion in 2011 to N21.3 billion in 2012. Profit after tax also jumped from N8.64 billion to N14.71 billion, indicating earnings per share of N4.90 for 2012 as against N2.88 recorded for 2011.

    Turnover grew to N87.97 billion in 2012 as against N62.50 billion in 2011. Gross profit rose from N19.3 billion to N32.4 billion. Lafarge Wapco is paying a dividend per share of N1.20 for the 2012 business year.

    “The percentage of turnover, profit before tax, and profit after tax in the first quarter of 2013 to its audited turnover, profit before tax and profit after tax for the period ended December, 2012 are 26.51 per cent, 33.86 per cent and 41.26 per cent, respectively. Given the current run rate, Lafarge WAPCO should perform better than last year,” FSDH stated.

    According to analysts, the strength of the company is backed by a global brand name and strong international presence, coupled with expansion plans and new improved facilities. Its proximity to the source of raw materials, strong root in the Nigerian market, as well as the increased import duty on imported cement, have put the company at an advantageous position.

    Analysts noted that they had revised earlier five-year forecast for Lafarge Wapco and used the Discounted Free Cash Flow (DCF) model to arrive at a fair value of N100.60 for the company per share.

     

  • NSE market capitalisation appreciates by N132bln

    NSE market capitalisation appreciates by N132bln

    Activities on the Nigerian Stock Exchange (NSE) closed on Tuesday on the  upbeat note with  the market capitalisation appreciating by N132 billion as a result of price gains by some blue chips.

    The News Agency of Nigeria (NAN) reports that the market capitalisation rose by 1.25 per cent to close at N10.692 trillion from the N10.56 trillion achieved on Tuesday.

    Also, the All-Share Index, which opened at 33,080.83, rose  by 359.74 points to close at 33,440.57.

    Nestle recorded the highest price gain of N10.50 to close at N890 per share.

    It was trailed by Dangote Cement with a gain of N5.88 to close at N162, while Lafarge Wapco appreciated by N5.01 to close at N77 per share.

    CAP gained N3.87 to close at N42.57, while Guinness rose by 68k to close at N265.28 per share.
    Conversely, FBN Holding led the losers’ table, dropping N1.82 to close at N18.11 per share.

    Union Bank and Eterna Oil followed with a loss of 29k each to close at N8.31 and N2.65 per share, respectively.

    UBA lost 18k to close at N6.80, while FCMB dropped 17k to close at N4.13 per share.

    In all, investors bought and sold 419.25 million shares worth N3.71 billion traded in 5,183 deals, indicating an increase of 112.63 per cent.

    This was in contrast with a turnover of 197.17 million shares valued at N2.76 billion transacted in 4,820 deals on Monday.

    Unity Bank was the toast of investors with an exchange of 107.10 million shares worth N69.15 million.

    Access Bank came second on the activity chart, accounting for 69.15 million shares valued N658.89 million, while Diamond Bank traded 35.05 million shares worth N203.19 million.

  • Any more headroom for Lafarge Wapco?

    Lafarge Wapco opened this week on demand with a year-to-date return of about 30 per cent, some 11 percentage points above stock market’s average return of 19.2 per cent. At a price of N76 per share, the cement stock has traded around its high of N76.79.

    The return complemented full year return of 34.9 per cent in 2012. It had closed 2012 at N58.53 per share. The general pricing trend had gathered momentum in recent years, trading within a high and low of N46.17 and N29.55 before closing at N40.70 in 2010. In 2011, the price peaked at N48.05 and finally closed at N43.25. Its year-to-date return of 22.8 per cent also signaled resurgence above the market average, bucking the trend in the previous year when it fell below market’s average return of 35.4 per cent.

    Against the lull and downtrend that had pervaded the market this month, Lafarge Wapco has shown stronger resistance than most cement stocks. At market’s opening position, Lafarge Wapco recorded the highest capital gains of 12.6 per cent as against increase of 6.1 per cent by Dangote Cement. Ashaka Cement, also a member of Lafarge Group, opened with lowest gain of 3.96 per cent. Cement Company of Northern Nigeria (CCNN), the lowest-priced stock in the segment, was high on positive sentiments with a return of 9.4 per cent. The performance of Lafarge Wapco and CCNN became even more significant in the light of the cautious market milieu that has characterised this earnings month. The All Share Index (ASI), the common value-based index that tracks prices of all equities, opened this week with a marginal month-to-date return of -1.31 per cent, underlining the caution and optimism that have moderated market forces as investors await most annual reports and dividend recommendations for the immediate past year.

    Waiting for the earnings

    But the next few days would determine the immediate and short to medium term pricing trend for Lafarge Wapco. The board of Lafarge Wapco met last week to deliberate on the audited report and accounts for the year ended December 31, 2012. Directors, at the meeting, considered probable dividend that would be paid to shareholders. Though the shareholders at the general meeting have the overriding power to approve or reject board’s dividend recommendation, the general meeting hardly overrides the board. The market is expectedly anxious to hear the board decisions.

    Market pundits and investors appeared to have factored recent earnings reports into Lafarge Wapco’s pricing trend. Recent audited reports and interim reports have shown gradual improvements in the fundamentals of the cement company. There is almost unanimity of expectations of dividend increase, giving recent earnings reports. Interim report and accounts for the third quarter ended September showed that net profit after tax jumped to N10.82 billion in 2012 as against N7.02 billion recorded in comparable period of 2011. Profit before tax had doubled from N8.57 billion to N16.34 billion. Turnover also improved considerably from N44.55 billion to N69.84 billion. Earnings per share for third quarter 2012 stood at N3.61 as against N1.06 in comparable period of 2011.

    Already, the 2012 third-quarter performance has surpassed the full-year performance for 2011. And 2011 had equally seen significant increase in overall performance. On the back of growths in sales and profit in 2011, the board of Lafarge Wapco increased gross dividend from N750 million for 2010 to N2.25 billion for 2011. This represented increase in dividend per share from 25 kobo to 75 kobo. Some 26.5 per cent of net earnings were distributed to shareholders as cash payouts for the 2011 business year as against 15.3 per cent paid out in previous year. Audited report and accounts for 2011 had shown that total turnover rose from N43.84 billion in 2010 to N62.50 billion. Gross profit grew by 47 per cent from N13.31 billion to N19.6 billion. Though profit before tax was pressured by mid-line costs, it managed a 21 per cent growth to close 2011 at N10.22 billion as against N8.46 billion in 2010. Profit after tax also rode on the back of significant reduction in tax provisions to N8.51 billion in 2011, an increase of 74 per cent on N4.88 billion posted in 2010. Basic net earnings per share correspondingly increased from N1.63 to N2.83. But beyond outward figures, the intrinsic profit-making capacity of the company had remained under pressures. While gross profit margin improved marginally from 30.4 per cent in 2010 to 31.4 per cent in 2011, the more-decisive pre-tax profit margin slipped from 19.3 per cent in 2010 to 16.3 per cent. Also, while return on equity, bolstered by the tax gains, improved from 10.1 per cent to 15.2 per cent, return on total assets dropped from 7.1 per cent to 6.7 per cent.

    Outlook

    The recent third-quarter report showed stronger underlying fundamental strength. Pre-tax profit margin stood at 23.4 per cent by September 2012 as against 19.2 per cent recorded in corresponding period of 2011 and 16.3 per cent recorded for the full year ended December 2011. Both the hardcore outward and underlying figures and sundry issues of dividend policy and sustainable growth favour increase in dividends. Substantial increase in dividend payout alongside strong fundamentals would strengthen the assumption of sustainable growth and increasing benefits of the company’s recent expansionary investments.

    The industry outlook remains as robust as ever. With the recent announcement of an increase in tariff on imported cement by the Minister of Trade and Investment, Mr Olusegun Aganga, domestic cement manufacturing companies would further consolidate their market shares. Lafarge Wapco is reasonably well-positioned in this regard, with its increased capacity and its two cement manufacturing plants located within the fastest growing hub of cement users. Besides, the reactivation of railway services, which Lafarge Wapco has signed on to, opens opportunity for cheaper and wider up-market distribution. Economy of scale, international partnership and global link as member of world’s largest cement group, experience and corporate stability should enable Lafarge Wapco to compete better than many other competitors; and thus be able to repel threat pose by shrinking national barriers and leverage its market share.

    Besides, investors would particularly look out for a growth trend that suggests improved benefits from the recent strategic investments. With the coming on stream of its 2.2 million metric tonnes new cement plant, which raised the company’s total capacity to 4.4 million metric tonnes per annum, Lafarge Wapco is expected to further consolidate its performance in the years ahead. Investments in power generation and utilisation- a major cost element in cement production, are also expected to provide stable platform for the realisation of the growth potential. But these revolve around the directors’ handling of the company’s leveraged financing structure. These would be the underlying variables shaping the cement stock’s price discovery in the period ahead.