Industrial sector rebounds, records over 73% year-to-date gain

The industrial goods segment has bounded back from its 2023 ranking as the worst-performing sector on the Nigerian Exchange Limited (NGX), achieving a year-to-date return of 73 per cent and the best-performing on the bourse.

Barely five months into the year, the sector outperformed the all-share Index and the four other segments, recording 72.95 per cent gain, contrary to the paltry 12 per cent appreciation it posted at the end of the 2023 financial year.

Companies under the sector include Dangote Cement, BUA Cement, Berger Paints, CAP, Notore Chemical, Beta Glass, Meyer and Lafarge WAPCO. Operators said Dangote Cement, Lafarge and BUA Cement have remained the attraction in the sector due to their fair pricing and active intervention by the majority shareholders.

A review of the performance of other sectors showed that the NGX consumer index has returned 38 per cent gain to investors while the oil and gas rose by 20.8 per cent. The ASI and insurance index appreciated by 18 per cent and 31.7 per cent. The banking index has so far posted a negative 6.83 per cent.

In 2023, the index showed a growth of 2.21 per cent in the first quarter. However, the growth declined to 1.42 per cent in the second quarter resulting in a moderate first-half gain of 3.66 per cent. It posted a marginal 0.25 per cent gain in August and 12 per cent in 2023. As of May 12, 2023, the index was still at negative 1.50 per cent.

Surprisingly, the sector had recorded a significant leap from 2023 performance with firms under the sector hitting over 100 per cent appreciation, despite the impact of foreign exchange revaluation losses incurred last year.

Dangote Cement is currently the most valuable stock on the NGX with a market capitalisation of N11.2 trillion, which makes up about 20.3 per cent of the entire Nigerian Exchange equity market.

The share price of Dangote Cement closed on Wednesday at N656.7. The company began the year with a share price of N319.9 and has gained 105 per cent on that price valuation, ranking it third on the NGX in terms of year-to-date performance.

BUA Cement is currently the fourth most valuable stock on the NGX with a market capitalization of N4.85 trillion, which makes up about 8.81 per cent of the overall equities sector.

The company’s closed transactions on Wednesday at N143.2. It started the year with a share price of N97 and has gained 47.6 per cent, ranking it 11th on the NGX in terms of year-to-date performance.

Lafarge Wapco is currently the 17th most valuable stock on the NGX with a market capitalization of N540 billion, constituting about 0.98 per cent of the overall NGX capitalisation.

The firm closed trading on Wednesday, May 15, 2024 at N33.5 per share. Lafarge Wapco began the year with a share price of N31.5. The stock has recorded 6.35 per cent appreciation, ranking it 49th on year-to-date performance of stocks on the nation’s bourse.

Head, Equity, Planet Capital, Dr Paul Uzum, said the companies in the industrial goods sector are made up of mainly Dangote cement, Buacement, and Wapco, noting that Dangcement, which represents over 50 per cent of that index has gained over 100 per cent since the beginning of the year.

“BUA Cement equally recorded some significant price movement. I think the movement came as a result of direct intervention from the majority shareholders who were worried about their valuation in the light of the massive devaluation of the naira,” he said.

Dangote Cement recorded an improvement in all performance measurement indicators with group revenue rising by 36.4 per cent to ₦2,208.1 billion while Profit after tax (PAT) was up by 19.2 per cent to ₦455.6 billion. Earnings per share went up by 18.8 per cent at ₦26.47.

The firm is garnering more market share across the continent with pan-Africa volumes going up by 12.7 percent to 11.3Mt. Group Managing Director, Dangote Cement, Arvind Pathak, speaking on the results said the positive full-year outcome is a combination of the strength in the diversity of its operations across Africa and a sustained drive to contain cost amidst an accelerating inflationary environment.

The Group also achieved double-digit growth in revenue at ₦2.208 trillion, while Group EBITDA reached a record high, increasing 25.1 per cent to ₦886 billion.