Shares of Lafarge Africa have surged by over 31% month-to-date as of the market opening on November 19, 2024, driving its year-to-date performance to over 60%.
The rally comes after Lafarge Africa’s release of its third-quarter 2024 financial statement, which reported a 101% increase in net sales, growing from N91 billion in Q3 2023 to N183 billion in Q3 2024.
Lafarge Africa also reported a pre-tax profit of N47 billion, a significant 717% year-over-year increase from the N5 billion recorded in the same period last year, bringing its 9-month pre-tax profit to N94 billion.
Since the results were unveiled on October 29, 2024, bullish price action has driven the stock up by over 31%, pushing it past the N50 mark during early trading on November 19, 2024.
Market trend
Lafarge Africa started the year at N31.50, riding the moderate bullish momentum from the previous year. By the end of January, it had climbed to N36 after briefly spiking to N51 before it closed lower.
- In February, the bullish momentum waned as the stock dipped to close in the red at N31.95, with a market volume of 75 million shares traded. March saw a revival of bullish activity, though it was short-lived, as April ended with another red close.
- From May onward, Lafarge Africa experienced a slow but steady upward consolidation, with consistent bullish price action that, despite its gradual pace, allowed the stock to close above N38 by the end of October.
- However, following the release of the company’s financial results on October 29, 2024, investor sentiment surged dramatically, propelling the stock to new heights as it gained over 31% and closed above N40 during the week starting November 10.
As of the early hours of trading on November 19, the stock has soared an additional 20% week-to-date, with a market volume of 18 million shares, driving its year-to-date performance up by over 60%.
Possible drivers of bullish sentiment
Lafarge Africa’s recent activities and performance offer some context to the rising bullish sentiment around its stock.
- In the first quarter of 2024, the company introduced Water-shield Cement, a product designed to address water permeability in buildings and improve structural durability. It is suitable for both new constructions and remedial works, such as fixing rust stains or seepage, as the company continues to focus on its core product offerings.
- This focus is reflected in its financial results for the nine months ending September 30, 2024, which showed a 66% year-over-year increase in sales, rising from N289 billion to N479 billion.
- Cement sales remained the main contributor, accounting for over 95% of the revenue, with aggregates and concrete making up the rest.
- Nevertheless, Lafarge Africa is set to introduce Supa Whyte, a gypsum plaster (POP) product designed for decorative applications, marking another step in the company’s effort to broaden its construction offerings, though its market reception remains uncertain.
- These developments, along with the company’s strong financial growth, are likely factors driving investor interest in the stock.
Lolu Alade-Akinyemi, CEO of Lafarge Africa, highlighted the company’s performance, stating, “We achieved strong top-line growth of 101% in Q3 and 66% for the nine months ended September 2024.”
He further added, “Profit after tax improved, driven by operational efficiency despite heightened cost pressures. Our results were supported by strong output from improved plant stability, enhancements in supply chain operations, and our ongoing cost management initiatives.”