CCNN Plc. 9M’18- Positive Momentum Sustained, PAT Up By 97% Y/Y

CCNN Plc. 9M’18- Positive Momentum Sustained, PAT Up By 97% Y/Y

Dear Client/Reader,

CCNN continued its superb performance in 9M’2018 as revenue grew by 44% to N19.6bn in contrast to the N13.6bn that was recorded in the same period last year. The substantial rise in revenue resulted from 47% increase in sale of cement by the company. Gross profit also increased significantly by 65% from N5.2bn to N8.6bn undeterred by a 30% rise in cost of sales. The impressive topline led to the growth in bottom-line as PBT and PAT grew by 100% and 97% respectively while EPS also increased from N1.62 in 9M’2017 to N3.19 in 9M’2018. With the merger of CCNN and BUA cement which is expected to continuously provide a compelling opportunity to capture significant synergies and create value for shareholders of the company in terms of stronger competitive advantage and improvement in both topline and bottom-line going forward, we maintain our medium to long term “BUY” recommendation on the stock of CCNN with a fair value of N35.26.

Key Multiples/Ratios

  Book Value Per Share- 13.41

 Gross Profit Margin- 44.10%

  Net Profit Margin-  20.50%

  Return on Equity – 23.80%

  OPEX/Sales ratio- 14.76%

  Return on Asset-    13.13%

  Cost of Sales Margin- 55.91%

  Price to Book Value- 1.28x

  Year-to-Date Change- 80.53%

Please find attached CCNN 9M’18 result analysis.

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