Proshare Logo
   Market Date: 20-08-2014   
Agriculture All One Min News Archives Bonds Cap Mkt Sentiments Capital Market CASHLESS NIGERIA Commodities Corporate Earnings Daily & Weekly Market Updates Enterpreneurship ETFs Forex Frauds & Scandals General Global Market Insurance Investors NewsBeat Islamic Finance Mergers & Aquisitions Money Market Mortgage Mutual Funds Nigeria Economy Oil Sector Opinions and Analysis Pensions People Personal Finance Politics Power Products & Services Professionals Property Public Offers Private Placements Regulators REITs Stock PICKS Taxation Telcos Travel & Tours Unlisted OTC MARKET World of Business

Cement Company of Northern Nigeria FY'10 Earnings Review

Category: Investors NewsBeat


  Read (4169)
Cement Company of Northern Nigeria FY'10 Earnings Review

 

 

Thursday, April 14, 2011 5:47 PM, Vetiva Research
 
Cement Company of Northern Nigeria (CCNN) Plc FY'10 Earnings Release Reporthighlights:
 
Analysis of result
CCNN’s FY’10 turnover came in at N11.18 billion, closely in line with our forecast of N11.20 billion (0.17% variance). On a yearly comparison, top-line declined as expected by 6%. We believe turnover was held steady by volume as prices most likely remained stable in the year. Given the closeness of our turnover forecast with the actual performance, we surmise that the company recorded an average utilisation rate of 77% in 2010 (as against 82% in 2009). Furthermore, reported figures show that CCNN’s cost of sales (N7.067 billion) is 6% higher than our forecast (N6.664 billion); hence, as against our expectation of about 41% gross profit margin, FY’10 gross profit margin came in at 37%. However, pre-tax profit (N1.752 billion) came in significantly ahead of our forecast of N1.147 (52% variance).
 
Investment Thesis
Despite the positive surprise in CCNN’s FY’10 bottom-line performance, we maintain a cautious outlook given that the fundamental business case is still unchanged.Essentially, the company’s capacity constraint, unclear expansion plans, huge energy costs and the resultant low margins are our biggest areas of worry as regards CCNN’s long term potential. In addition, the aggressive expansion and wide distribution of Dangote Cement would continue to pose major threats to CCNN’s historic dominance of the North West Region – hence increasing pressure on the company’s market share is inevitable.
 
Revisions to our forecasts
Though our fundamental assumptions on CCNN remain the same, we have duly adjusted our forecasts to incorporate future occurrence of increasing non-operating income. Though we are yet to ascertain the cause of the boost in FY’10 bottom-line from the company’s management, we surmise that it likely comes from other non-operating income which historically (between 2006 and 2009) has been a constant feature and averaged about 8% of sales. Hence our revised FY’11 turnover remains unchanged at N11.93 billion but after tax profit has been revised upwards to N1.353 billion (previous: N827 million)
 
Valuation
After adjusting for FY’10 numbers, we obtained a new target price of N8.17 and an implied range of N7.40 – N9.10. At CCNN’s current price of N10.23, the stock is trading at a significant premium (c.21%) to our new target price. Thus, we maintain aSELL rating on the stock.
 

https://www.proshareng.com/investors/company.php?ref=CCNN



Tags: , 



Comment With Your Facebook or Yahoo! ID


Latest news


News on Investors NewsBeat

About Us

Who We Are
Our Team & Partners
Corporate Governance
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Newsletter
Contact Us
Message from CEO
Resources

News & Features
The Analyst / Market Data
Investor Relations Portal
The Regulator
Economy & Politics
WebTV
Training Portal
Events Calendar
NewsStands - Online Reputation

Products and Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Service
Investor Relations Services
Alert & Subscription Services
Share Support Services
Proshare Consult
Event & Seminar Coverage
Market Directory
File a Complaint
News & Analysis

#1minNews
News from TheANALYST
Video News from WebTV
Money Market Updates
Opinions & Analysis
Nigerian Economy
Market Data
The Regulator
Newsletters
Discussion Forum
Policy

Subscriber Agreement
Privacy Policy
Data Policy
Disclaimer
Copyright Policy
Trademarks
Comments in Site
Advertising Code
Conflict of Interest
Content Partnership
3rd Parties

Online Trading and Execution
Training
Legal Support Services
Web/Technology Services
File a Complaint