April 10, 2026/Cordros Report

In this report, we update our views and estimates for DANGCEM for 2026E following the release of its  2025FY results. During the period, the company reported revenue growth of 20.3% y/y, EBITDA margin expansion to 46.0% (+741bps y/y) and EPS growth of 101.3% y/y to NGN59.86. For 2026E, we expect a recovery in demand across both the Nigerian and Pan-African markets as macroeconomic conditions stabilize. We also anticipate an uptick in cement prices to mitigate persistent cost pressures, further exacerbated by ongoing tensions in the Middle East. Specifically, we project sales volume growth of +8.0% y/y, higher cement prices (+7.7% y/y), revenue expansion of +16.3% y/y, EBITDA margin of 46.5% (+54bps y/y), and EPS growth of +28.7% y/y to NGN77.02. Accordingly, we raise our target price to NGN850.80/share (Prev: NGN723.58/share) and maintain a “HOLD” rating on the stock. We also forecast a 2026E DPS of NGN60.00 (Dividend yield: 7.4%). On our estimates, DANGCEM is trading at 2026E P/E and EV/EBITDA of 10.5x and 6.1x, respectively, vs MEA peer averages of 14.1x and 9.5x, respectively.

Higher Volumes and Pricing to Drive Earnings Expansion in 2026E: We project aggregate revenue growth of 16.3% y/y in 2026E, driven by an 8.0% y/y increase in sales volumes to 29.66 million tonnes and a 7.7% y/y rise in average realised price to c.NGN168,000.00/tonne (USD125.00/tonne). On a regional basis, we forecast revenue growth of 13.7% y/y in Nigeria, supported by a modest 0.5% y/y increase in sales volumes to 17.77MT and a 13.1% y/y increase in average cement prices. In the Pan-African segment, we project revenue growth of 13.2% y/y, underpinned by an 8.5% y/y increase in volumes to 11.89MT and a 4.3% y/y uplift in pricing. Over the 2026E–2030E period, we forecast average revenue growth of 15.4%. Elsewhere, we model a 12.6% y/y growth in cost of sales and a 17.8% y/y rise in operating expenses. The increase in COGS reflects elevated energy costs (+15.3% y/y; 42.7% of total COGS), alongside higher raw material costs (+13.0% y/y; 23.7% of COGS). OPEX growth is primarily driven by haulage costs, which we expect to rise by 15.3% y/y (55.9% of OPEX). Consequently, we project a modest EBITDA margin expansion of 54bps y/y to 46.5%. Below the operating line, we forecast a 37.1% y/y decline in net finance costs to NGN151.91 billion, reflecting both a lower debt balance and lower interest rates. Overall, we project EPS growth of 28.7% y/y to NGN77.02, with a 2026E–2030E CAGR of 17.6%.

Capacity Expansion to Support Medium-Term Volume and Export Growth: DANGCEM plans to expand its footprint through a phased 25.00MT capacity addition by 2030E. We believe the planned footprint expansion, will support sales volume uplift and drive export volume growth leading to higher export contribution to revenue over our forecast horizon. Specifically, we project a 6.8% CAGR in sales volumes to c.38.00MTPA, supporting a 27.5% CAGR in export revenue to above NGN1.00 trillion by 2030E, with contribution expected to increase to 12.7% (2025: 7.7%). 

Valuation: Our target price is NGN850.80/s, derived from a 60/40 blend of DCF and sector relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN683.36/s) and FCFE (NGN578.57/s) estimates, assuming a 22.1% WACC, 25.3% CoE and 4.0% terminal growth rate. Similarly, our multiple based FV was derived from a blend of EV/EBITDA (NGN1,275.08/s) and P/E (NGN1,086.04/s) estimates, utilising MEA peer averages for both factors (9.5x and 14.1x, respectively) as multipliers.