The outlook for Lafarge Africa Plc (WAPCO), one of Nigeria’s leading cement producers and providers of sustainable building solutions, remains mixed heading into 2026.
While the company is projected to deliver robust revenue growth of 26.1%, analysts expect it to face a free cash flow deficit of N18.67 billion.
The anticipated shortfall is largely attributed to a planned $250 million expansion capital expenditure programme, with capex intensity forecast at 30.0%. Despite this, financial analysts at Cordros Securities have raised their year-end target price for the stock to N240.54 per share from N218.33.
The upward revision reflects expectations of profit expansion and improved valuation metrics. However, the stock has been downgraded to a “HOLD” rating, with analysts citing a limited upside of 12.5% from the current price of N213.90.
Higher capital expenditure is also expected to restrict dividend growth. As a result, analysts forecast that the company will maintain its 2025 full-year dividend per share of N10.00 into 2026, implying a dividend yield of 4.7%.
Management confirmed to Cordros Securities that work has commenced on the 4.50 million tonnes per annum capacity expansion at the Sagamu and Ashaka plants. The project is expected to be completed within 12 months and funded entirely through internally generated cash.
Looking ahead, analysts project revenue and earnings per share (EPS) growth of 26.1% and 31.5% respectively in 2026. This outlook is underpinned by an expected 10.8% year-on-year increase in sales volumes to 6.98 million tonnes, alongside a 13.8% rise in average realised prices to approximately N192,500 per tonne. Over the 2026–2030 period, revenue is forecast to grow at a compound annual growth rate 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 31 December 2025, Lafarge Africa reported revenue of N1.1 trillion, representing a 53% increase from N696.8 billion in 2024.
Profit after tax also rose significantly, climbing from N100.1 billion in 2024 to N273 billion, a 173% increase. Management attributed the performance to volume-driven growth, disciplined cost optimisation, improved plant stability, stronger distribution efficiency, retail expansion, and effective financial management.
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