Conoil Nigeria Plc, Medview Airline Nigeria Plc, and Lafarge Africa Plc are Financial Derivatives Company’s least favourite stocks as companies as election tenterhooks force investors to hold onto their money.
We have decided to dig deep into the financial statement of these firms, with a view to providing investors with more information that will enable them make strategic investment decision.
Lafarge Africa is beleaguered by huge debt and rising leverage ratio after it incurred foreign exchange losses relating to the acquisition of UNICEM.
Also, competitions from rival firms like Dangote cements and Cement Company of Northern Nigeria (CCNN) has resulted in slow sales.
Lafarge Africa’s recorded debt to equity ratio of 7.50 percent in the third quarter of 2014, but the ratio has been rising steadily as it finally touched down at 380.17 percent as at September 2018. This means that the company is highly geared and the proportion of debt in the capital structure of the firm is high.
The cement maker’s profit was N31.75 billion in 2014, but it recorded a loss of N10.37 billion as at September 2018.
It plans to future profit and reduce its debt burden by raising capital from existing shareholders.
“Lafarge is struggling with low efficiency, weak fundamentals and stiff competition,’’ said analysts at Financial Derivative Company.
Medview Airline’s recorded its first loss in three years as it continues to struggle with receding sales. The company made a loss of N1.52 billion as at September 2018 from a profit of N1.1 billion the previous year.
The airline operator is not well positioned to take advantage of the open sky agreement, according to Financial Derivative Company.
