The race to sell-offs for portfolio rebalancing ahead of the 2023 elections and migration to fixed-income securities following the CBN’s recent interest rate hike resulted in shares of Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc losing as much as N1.216 trillion in the third quarter of the year.
This is despite that the sector witnessed an improved performance in half year 2022 on various parameters like credit growth, asset quality, and profitability.
Pre-election years are typically characterized by negative sentiments, which cause foreign investors to flee.
Market experts believe that domestic Investors’ sentiment is usually weak as they seek to reduce their market exposure when elections draw closer. The intensity of the impact is usually a function of the degree of political tension and uncertainty generated by political activities.
According to data obtained by Nairametrics from the NGX which focused on the performance of the cement firms’ stocks during the third quarter that ended September 30, 2022, BUA Cement Plc, Dangote Cement Plc and Lafarge Africa Plc lost a whopping sum of N1.216 trillion as bear run deepened on the NGX.
These stocks were selected based on their price performance from quarter to date and are represented by the percentage lost.
Lafarge Africa Plc – (7.19%)
The share price of Lafarge Africa Plc decreased by 7.19% during the period under review, from N26.40 per share to N24.50 per share, reducing the market capitalisation to a loss of N30.605 billion or 7.19% to close at N394.640 billion at the end of September 2022 from the opening figure of N425.254 billion on July 1.
In its unaudited half-year, H1 financial results submitted to the Nigeria exchange group limited (NGX) showed the group’s Profit After Tax (PAT) rose by 32.1% to N37.4 billion as of June 30th, 2022 from N28.3 billion achieved in the corresponding period.
Also, Profit Before Tax reported during the period stood at N46.9 billion as of June 2022 from N36.8 billion in H1 2021, reflecting a 27.6% growth.
A review of the company’s H1 unaudited results released on NGX to the investing public for the period under review also showed that revenue grew by 29% to N187 billion from N145 billion reported in Half year ended June 30, 2021
Earnings per share (EPS), recorded during the period under review stood at 232 kobo in H1 2022 from 176 kobo recorded the previous year.
The company’s total assets as of June 30th 2022 stood at N568 billion from N526.8 billion as of December 31st 2021, an increase of 7.8%.
Lafarge Africa (Formally WAPCO) closed its last trading day (Tuesday, October 25, 2022) at N22.25 per share on the Nigerian Stock Exchange (NGX), recording a 1.3% drop from its previous closing price of N22.55. Lafarge began the year with a share price of N23.95 but has since lost 7.1% off the price valuation.
Dangote Cement Plc- (10.91%)
The shares of Dangote Cement Plc witnessed a negative run during the quarter. The Cement firm listed on the NGX and the most capitalized cement company has lost 10.91% in share price during the third quarter, from N275.00 to N245.00. The negative sentiment drove down the market capitalization to lose N511.215 billion to stand at N4.174 trillion at the close of trading on September 30, 2022, from an opening figure of N4.686 trillion at the beginning of the quarter trading on July 1.
Dangote Cement Plc reported a 17% increase in revenue to N808.04 billion in its half-year (H1) unaudited financial statement for the period ended June 30, 2022, compared with N690.55 billion reported in the corresponding period of 2021.
The Cement giant closed H1 2022 with a profit before tax (PAT) of N264.89billion in H1 2022 from N281.25 billion in H1 2021.
Speaking on the results, Chief Executive Officer of Dangote Cement, Michel Puchercos, said: “Despite the elevated inflation due to a very volatile global environment, the first half of 2022 has been positive. We recorded increases in revenue and EBITDA that drove strong cash generation across the Group. We recorded revenue of N808.0 billion up 17% compared to last year and Group EBITDA of N373.2 billion, up 6.3% with an EBITDA margin of 46.2%”
Dangote Cement closed its last trading day at N245.00 per share on the Nigerian Stock Exchange (NGX). Dangote Cement began the year with a share price of N257.00 but has since lost 4.67% off the price valuation.
BUA Cement Plc-(27.68%)
Shares of BUA Cement Plc also witnessed negative sentiment during the quarter of the year. The cement firm lost 27.68% in price during the third quarter, from N71.90 to N52.00. The company witnessed sell pressure which drove down the market capitalization to lose N673.901 billion to close at N1.760 trillion at the close of trading on September 30, 2022, from an opening figure of N2,434 trillion at the beginning of trading in July.
The unaudited financial statement of the company for the period ended 30 June 2022 revealed 51.73% growth in turnover to N188.56 billion from N124.28 billion reported the previous year.
Profit after tax of N61.36 billion was reported for the 6 months, up by 41.4% from N43.4 billion reported the previous year.
Earnings per share (EPS) of BUA Cement increased year on year by 41.4% to N1.81 from the EPS of N1.28.
BUA Cement closed its last trading day (Tuesday, October 25, 2022) at N68.20 per share on the Nigerian Stock Exchange (NGX), recording a 10% gain over its previous closing price of N62.00. BUA Cement began the year with a share price of N67.05 and has since gained 1.72% in price valuation.