Cement Company of Northern Nigeria Plc. | Upward Revision to Estimates on Strong 9M-17 Results

We revise forecasts for CCNN following impressive 9M-17 results, and roll forward estimates and valuation to 2018. On net, we raise our TP for the stock by 28% to NGN9.52/share and upgrade rating to HOLD. The revision to our estimates was driven by improved EBITDA and EBITDA margin (+113% and +774 bps respectively in 9M-17) on (1) higher realized sales volume and stronger selling price and (2) improved energy cost (-10% YtD and -35% q/q cost/tonne in Q3).

On net, we raise our EBITDA and net profit forecasts by 33% and 38% respectively for 2017F, and by 14% and 16% average respectively for 2018-2019F. CCNN's annualized 9M-17 EBITDA and net profit are 38% and 36% ahead of Bloomberg's consensus' 12-month estimates.

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