March 20, 2018/Cordros Update
- DANGCEM just published 2017FY results. Group revenue of NGN805.6 billion (+31% vs. 2016FY) and PAT of NGN204.3 billion (+43% vs. 2016FY) are behind Bloomberg consensus’ NGN810.4 billion and NGN249.9 billion, respectively.
- EBITDA came in at NGN388.2 billion, +51% vs. 2016FY, and ahead of consensus’ NGN380.3 billion
- Sales volume, at 21.9 million tonnes, was lower by 7% vs. 2016FY, and behind the 22.3 million tonnes we estimated.
- Dividend per share of NGN10.50 was proposed, equating to a yield of 4% on the latest price.
- Nigerian revenue and EBITDA grew by 30% and 52% respectively, while net profit contracted by 17%. Sales volume was down by 16% while effective tax rate (ETR) was higher by 1200 bps.
- Non-Nigerian revenue and EBITDA grew by 34% and 45% respectively, while loss after tax (LAT) reduced from NGN163 billion in 2016FY to NGN50.4 billion. Volume grew by 9%, gross and EBITDA margins improved, while ETR was lower by 200 bps.
- For Q4-17, Group revenue and EBITDA grew by 16.8% y/y and 20% y/y respectively, while net profit contracted by 79% y/y.
- PBT grew by 116% y/y, so the significantly higher effective tax rate of 84% (vs. credit in Q4-16) was responsible for the earnings contraction.
- Volume in Q4 grew by 3.7% y/y and 10.2% q/q.
- In Nigeria, revenue and EBITDA grew by 15% y/y and 16% y/y respectively, while PAT fell by 84% y/y, also as a result of significantly higher effective tax rate of 84% (vs. a credit in Q4-16).
- Nigerian volume was down by 4% y/y but grew by 12% from Q3-17.
- Non-Nigeria revenue and EBITDA grew by 20% y/y and 180% y/y respectively, while loss after tax stood at NGN570 million, vs. NGN20.9 billion in Q4-16.
- Non-Nigerian volume grew by 16% y/y and 9% q/q.
- At first glance, Q4-17 result is impressive, in our view.
