Nigeria | NGX

Nigerian Breweries (NB) Plc consolidated its Q4 2020 performance in Q1 2021, signaling a new normal. Having grappled with the impact of the strain in household income and the halt in on-trading activities, Revenue growth was slow, up only 4.3% y/y in FY 2020. As of Q1 2021, however, Revenue grew significantly, up 27.0% y/y t0 N105.68bn. Similarly, and defying the general rise in cost and expense lines, Profit After Tax was up 38.6% y/y to N7.66bn in the period.

Following the two consecutive weeks of gains, the NSE saw some profit taking, halting the bullish streak to close at 38,324.0 points while market capitalization settled at N19.9bn in the past week, representing a 2.9% w/w decline. As a result, YTD loss worsened to 4.8%. Activity level weakened during the week, as average volume and average volume traded declined by 33.3% and 45.0% w/w to close at 209.1m units and N3.2bn, respectively.

In Q1 2021, Lafarge Africa reported a 12.2% y/y increase in Revenue to N71.5bn, driven by Cement Sales (up 12.3% y/y to N69.9bn) and Aggregates & Concrete (up 7.9% y/y to N1.6bn). Supported by controlled Opex (-16.3% y/y) and steep decline in Finance Cost (-18.2% y/y), Profit Before Tax rose to N12.8bn in Q1 2021, up 36.1% y/y from N9.4bn in Q1 2020. Thus, Net Income grew by 13.3% y/y to N9.1bn in Q1 2021 from N8.1bn in Q1 2020. EPS rose to N0.57/s in Q1 2021 (Q1 2020; N0.50/s).

Dangote Sugar reported a significant (41.5% y/y) growth in revenue in Q1 2021, as the firm continues to gain more grounds in the Nigerian market in line with our expectations. Net Income grew 30.3% y/y to N8.30bn for Q1 2021. We forecast sustained Revenue growth in 2021 but we expect elevated cost to moderate growth in bottom-line for FY 2021.

Dangote Cement outpaced our topline expectations as the Revenue grew significantly, up 33.5% y/y to N332.7bn in Q1 2021 from N249.2bn in Q1 2020. The growth in Group Revenue was supported by stronger volume growth (+18.7% y/y) and better price per tonne (+12.4%) y/y from both its Local and Pan African operations. Despite significantly higher Finance Cost (+180.7% y/y), Pre-tax Income remained resilient, up 47.7% y/y to N130.1bn in Q1 2021 from N88.1bn in Q1 2020 bringing EPS to N5.29/s in Q1 2021 (Q1 2020; N3.60/s).

Sustained buying interest in the Nigerian equity market supported a bullish weekly close for the second consecutive week. Notably, the benchmark All Share Index (ASI) closed higher on all trading days of the week during the holiday-shortened week. The NSE-ASI appreciated by 0.8% w/w to close at 39,494.7 points while investors’ wealth improved by N147.6bn to print at N20.6tn.YTD loss moderated to 1.9% at the close of the week. Activity level weakened during the week, as average volume and value traded declined 21.0% w/w and 19.9% w/w to print at 280.1m units and N3.2bn, respectively.