May 20, 2026/Cordros Report
We revise our estimates on DANGCEM following the release of its Q1-26 results, which showed a stronger than expected recovery in cement volumes across both the Nigerian and Pan African markets. The recovery in volumes was supported by improving macroeconomic conditions across key operating markets, higher fiscal spending, uptick in construction activities, and stronger export volumes. We expect these trends to remain supportive through the rest of the year.
Accordingly, we raise our 2026E group volume forecast to 30.96 Mt (Prev: 29.66 Mt), comprising Nigeria volumes of 18.53 Mt (Prev: 17.77 Mt) and Pan African volumes of 12.42 Mt (Prev: 11.89 Mt). Consequently, we increase our 2026E revenue growth forecast to 19.7% y/y (Prev: +16.3% y/y), raise our EBITDA margin estimate to 46.9% (Prev: 46.5%) and project EPS at NGN82.94 (Prev: NGN77.02). Following these revisions, we raise our target price to NGN1,077.80/s (Prev: NGN850.80/s) and maintain our “HOLD” rating on the stock. On our 2026E estimates, DANGCEM is currently trading at a 14.2x P/E and 8.3x EV/EBITDA, vs MEA peer averages of 16.1x and 8.9x, respectively.
Higher volume assumptions lift revenue and earnings forecasts: We raise our aggregate revenue growth forecast to 19.7% y/y in 2026E (Prev.: +16.3% y/y), driven primarily by higher expected volume growth (+12.7% y/y to 30.96 Mt | Prev: +8.0% y/y to 29.66 Mt), while we slightly lower our average realised price growth assumption to 6.2% y/y to c.NGN166,000.00 (Prev.: +7.7% y/y to c.NGN168,000.00). On a regional basis, we now forecast Nigeria revenue growth of 17.9% y/y (Prev.: +13.7% y/y), reflecting an upward revision to volume growth expectations to 18.53 Mt (Prev: 17.77 Mt), alongside a 13.3% y/y increase in average prices to NGN188,000.00 (Prev.: +13.1% y/y to NGN189,000.00). For Pan Africa operations, we now project revenue growth of 14.7% y/y (Prev.: +13.2% y/y), supported by a 13.4% y/y increase in volumes to 12.42 Mt (Prev.: +8.5% y/y to 11.89 Mt) and a 1.1% y/y increase in average realised prices to c.NGN134,000.00 (Prev: +4.3% y/y to c.NGN138,000.00).
Elsewhere, we now forecast COGS growth of 14.5% y/y and OPEX growth of 20.6% y/y (Prev.: +12.6% y/y and +17.8% y/y, respectively), reflecting expectations of higher energy and haulage costs. Nonetheless, we raise our EBITDA margin projection to 46.9% (Prev.: 46.5%). Below the operating line, we forecast a 13.9% y/y decline in net finance costs, reflecting a lower debt balance, while EPS is projected to grow by 38.6% y/y to NGN82.94.
Pan African margin pressure to persist in 2026E: While we forecast Pan African revenue growth of 14.7% y/y in 2026E, EBITDA is expected to decline by 9.7% y/y, with EBITDA margin contracting by 430bps y/y to 15.9%. This reflects higher operating costs across the region, particularly energy, freight, and distribution expenses, alongside a more competitive market structure which limits the company’s ability to pass costs to consumers relative to Nigeria. Nonetheless, group EBITDA margin is forecast to expand by 89bps to 46.9%, supported by margin expansion in Nigeria (+206bps y/y to 61.7%).
Valuation: Our target price is NGN1,077.80/s, derived from a 50/50 blend of DCF and sector relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN938.17/s) and FCFE (NGN788.92/s) estimates, assuming a 18.7% WACC, 20.7% CoE and 4.0% terminal growth rate. Similarly, our multiple based FV was derived from a blend of EV/EBITDA (NGN1,248.80/s) and P/E (NGN1,335.33/s) estimates, utilising MEA peer averages for both factors (8.9x and 16.1x, respectively) as multipliers.
