By Bamidele Famoofo
The outlook for Lafarge Africa Plc (WAPCO), one of Nigeria’s leading cement producers and provider of innovative and sustainable building solutions in 2026 is mixed.
On the revenue side, the Holcim’s Group subsidiary is expected to grow by 26.1% but in cash flow, deficit is projected to reach N18.67 billion.
The free cash flow deficit of N18.67 billion in 2026E is due to the planned USD250.00 million expansion capex spend, with capex intensity projected at 30.0%. Nonetheless, financial analysts at Cordros Securities raised their year-end target price for the stock to N240.54/share (Prev: N218.33/share).
The uplift in target price is primarily supported by profit expansion and stronger relative valuation outputs. However, the stock was downgraded to a “HOLD” given the limited upside of 12.5 % from the current price (N213.90). Additionally, the higher capex is likely to constrain room for DPS growth; as such, it is expected the company will maintain its 2025FY DPS of N10.00/Share in 2026E (Div yield: 4.7%).
The management of Lafarge Plc has confirmed to stock analysts from Cordros Securities that the 4.50MTPA capacity expansion at the Sagamu and Ashaka plants has commenced, with completion expected within 12 months and funding to be fully supported by internally generated cash.
Additionally, revenue and EPS growth of 26.1% and 31.5% are expected in 2026E as experts forecast revenue growth of 26.1% y/y in 2026E, underpinned by a 10.8% y/y increase in sales volumes to 6.98 million tonnes and a 13.8% y/y rise in average realised price to c.N192,500.00/tonne. Over 2026E–2030E, revenue is forecast to grow at a CAGR of 22.5%.
“We model a 24.9% y/y increase in cost of sales and a 24.3% y/y rise in OPEX. The increase in COGS reflects higher energy costs (+7.0% y/y | 33.1% of total COGS), alongside a sharper increase in raw material costs, (+37.7% y/y | 28.8% of COGS). For OPEX, growth is largely attributable to distribution expenses, which we expect to rise by 24.0% y/y (65.0% of OPEX). Consequently, we project a modest 10bps y/y EBITDA margin expansion to 40.1%. Below the operating line, we forecast a 50.3% y/y moderation in net finance gain to NGN9.56 billion, reflecting lower average investable cash balances through the year. Overall, we project EPS growth of 31.5% y/y to NGN22.30 (2026E – 2030E CAGR: 26.3%),” Cordros noted.
For the audited financial year ended December 31, 2025, Lafarge Plc, announced a revenue milestone of N1.1 trillion in 2025, representing a 53% surge from N696.8 billion recorded in the corresponding period of 2024.
Following a review of the results, the company recorded an increase in Profit After Tax (PAT) which rose from N100.1 billion in 2024 to N273 billion representing a 173% increase. The management of Lafarge explained that the performance was underpinned by volume-led growth, disciplined cost optimization across operations, enhanced plant stability, improved distribution efficiency, retail expansion, and efficient financial management.
