₦airaland Forum

SpaceX:
remove tinubu out of the equation and she won't go anywhere in life.

ogawisdom:
Is it not presently over valued presently at 150 based on the known figures

ositadima1:
Let me focus strictly on Dangote Sugar, because once you strip away market momentum, the numbers tell a much more constrained story.

Starting with operating performance. In Q3-2025, Dangote Sugar generated about ₦43bn in operating profit (EBIT), while finance costs were roughly ₦30bn in the same quarter. That immediately tells you something important: about 70% of operating earnings was absorbed by interest expense. So even before talking about growth or valuation, the business is operating under heavy financial pressure.

If you annualise Q3 operating performance conservatively, EBIT comes to roughly ₦170bn. Applying a normal Nigerian corporate tax rate of 30%, normalized after-tax operating profit (NOPAT) is approximately ₦119bn. That is the sustainable earning power of the operations before reinvestment and financing effects.

Now look at what those earnings are generated on. As of September 2025, total assets stood at about ₦1.02 trillion, with cash of roughly ₦80bn. Removing cash gives operating assets of approximately ₦936bn. When you divide normalized NOPAT by invested capital, you get an operating return:

₦119bn ÷ ₦936bn ≈ 12.7% ROIC

That number matters only when you compare it to the cost of capital.

To estimate the cost of capital, start with equity. Nigeria’s long-term risk-free rate is around 15%. Add an equity risk premium of about 10%, and apply a beta of roughly 1.1 for a leveraged consumer industrial business. That gives a cost of equity of:

15% + (1.1 × 10%) ≈ 26%

Now look at debt. Based on reported finance costs and outstanding borrowings, Dangote Sugar’s pre-tax cost of debt is roughly 18–20%. After the tax shield, that comes down to about 13%.

Given the company’s capital structure, roughly 70% debt and 30% equity in economic terms, the weighted average cost of capital works out to:

(30% × 26%) + (70% × 13%) ≈ 17% WACC

This comparison is critical. Dangote Sugar’s ROIC of ~12–13% is below its WACC of ~17%. That means, on a purely economic basis, the business is not currently creating value with growth. At best, it is treading water.

Growth also requires reinvestment. Even assuming a modest 4% long-term growth rate, and using the current ROIC level, the reinvestment requirement is:

Reinvestment rate ≈ g ÷ ROIC
≈ 4% ÷ 12.7% ≈ 31%

Applied to NOPAT, that means Dangote Sugar must reinvest roughly ₦37bn every year just to sustain low-single-digit growth. That reinvestment comes before any free cash is available to capital providers.

After reinvestment, free cash flow to the firm is approximately:

₦119bn − ₦37bn ≈ ₦82bn

That is enterprise-level cash flow, before debt service. And this is where the balance sheet becomes decisive.

Financial liabilities are still above ₦736bn, while cash is under ₦80bn, leaving net debt of roughly ₦650bn. With this level of leverage, a significant portion of enterprise cash flow is structurally redirected to lenders. The Q3 interest burden already demonstrates this reality in practice.

Cash flow confirms the picture. Despite reporting profits, operating cash flow remains weak and at times negative, meaning the business is still not self-funding. It continues to rely on refinancing, short-term borrowing, and working-capital movements rather than internally generated surplus cash.

This is why enterprise value on its own can be misleading here. Yes, EV captures the whole business, but when ROIC is below WACC and leverage is high, enterprise value does not automatically translate into equity value creation. The economics are constrained by financing, not optics.

On backward integration, the financial statements are very clear. Biological assets are about ₦18–19bn, which is less than 2% of total assets, and that figure has not grown meaningfully year-on-year. Inventories, at around ₦130bn, are still dominated by imported raw sugar and refined stock. Gross margins remain around 19–20%, which suggests that local sourcing has not yet reduced FX exposure or input costs in a material way.

If backward integration were already working at scale, we would expect to see ROIC rising, margins expanding, or operating cash flow improving. None of those shifts are visible yet in the numbers. For now, backward integration remains a long-term strategic promise, not a current economic driver.

So when Dangote Sugar is highlighted based on Q3 performance or enterprise value, I think the math needs to be acknowledged. The business is operating with ROIC below WACC, heavy reinvestment needs, and a leveraged balance sheet. Any upside case is therefore macro-dependent, on lower interest rates, FX stability, and time, rather than already embedded in the operating fundamentals.

That distinction is important if we’re being honest about what the numbers are actually saying.

Numbers first, narratives later.
-- ositadima1

Coolcash1:
Glad I made this decision.

Funds invested in gold and silver. Made huge returns I won’t have in years on NGSE.

Be a smart investor and not a dummy that confines himself only to a single market. Capital flows to where returns are guaranteed and risk rewarding. Practice portfolio rebalancing and asset diversification.

FYI: it’s still not late to join the precious metals bullish run as it’s about gathering momentum for another leg up…Silver expected to hit $500/ounce whilst it’s big brother projected to end the year at $8000/ounce.

Enough said!

essentialone:
Why is Airtel Plc always giving Notifications of Transaction in Own Shares?

aj8:
“An eighty year old lady may not look so great in high-heeled shoes”

mikeapollo:
Some of the newly acquired in 2025 will deliver profits in 2026. Access is not acquiring or expanding to make losses!

mikeapollo:
Access will make 100% capital gain before or at year end. No amount of bashing or bitter-coating can stop it, although I have not bought yet.
They did a lot of acquisitions in 2025, which usually come with write-off of legacy debts in the acquiree, acquisition expenses etc. which could depress their profits. But 2026 will be different.

aj8:
Papa Emma, some of us are terribly undiscerning of sarcasm. Please have mercy on us. I personally would like to know when you are being sarcastic. Some of us have such high regards for your wise counsel and believe me I have taken hold blindly of some of your statements only to learn later it was just you being sarcastic. Would it hurt so much sir?

emmanuelewumi:
Still fully Invested, see myself as a part owner of a wonderful business. Bought additional 2 tranches in 2026

Will stop buying whenever my holdings can generate a minimum dividend income of N10 million from the business

Deadlytruth:
According to Pastor Tunde Bakare, one of the most costly acts of kindness is when you toil and labour very hard for years making sacrifices and bearing unspeakable pains in pursuit of a dream, and when that dream finally materializes, rather than enjoy it yourself you, in the name kindness, hold it out to someone who was never part of the sacrifices and the pains, and then say "Come and take". He added that even God himself will not be happy with that your kindness.
So you want those of us who have suffered almost nine years of the pains of losing hundreds of thousands and even millions in Fortis amidst pain and fear of delisting to, at this time of opportunity to reap, just call you and say; come and take, just because we want to deliver 100k units to move price up? Abeg if the moneybags in Fortis are not ready to release 100k bloc units, let it remain where it is. We the ordinary shellholders are not in a hurry. After all we did nine years inside it already. Lol.

yMcy56:
ARADEL in last minute leap...
Closed @850
This is what we are saying, that sometimes some people's analysis are not always indepth....

Seems there's bull in market today ....

Oasisblue:
Lol. How do you folks interprete financial results? You call this not good? Really?
The balance sheet has moved from a mid-cap profile to a mega-cap powerhouse.
Total Assets: Surged by 495% to ₦10.42 trillion (FY 2024: ₦1.75 trillion). 
Property, Plant & Equipment (PPE): Jumped to ₦5.01 trillion from ₦676.6 billion, reflecting the acquisition of productive oil and gas assets. 
Decommissioning Liabilities: Increased significantly to ₦1.46 trillion, a long-term obligation associated with the newly acquired fields. 
Total Equity: More than doubled to ₦3.48 trillion, primarily due to the addition of non-controlling interests from the new subsidiaries.

wiki15:
I noticed that. Seems every "expert" is doing "expert" for their own band wagon. SMH

emmaodet:
Honestly, i am not really impressed with the result.
70% of the profit before tax comes from ''other income'' and ''share of profit from associate''
They have a worrying receivables of 2.56 trillion, borrowing ballooned to 1.7 trillion from just 40 billion previous year, decommissioning liabilities of 3.35t, payables increased from 120b to 2.9 trillion.
In the share holders equity, non-controlling interest is now above 50%.
Ever since they came to Ngx, i think they have learnt the act of playing with the books unlike them.

aj8:
For Universal, factor….

https://doclib.ngxgroup.com/Listings-site/corporate-disclosure-site/Documents/Universal_Insurance_Plc_Notice_of_Extraordinary_General_Meeting_.pdf

mikeapollo:
I dey inside another controversial stock so I no fit talk.
Let everybody dey defend im territory

KarlTom:
Instead of saying takeover, they are speaking grammar...

https://doclib.ngxgroup.com/Financial_NewsDocs/45950_AUSTIN_LAZ_AND_COMPANY_PLC-AUSTINLAZ_PRESS_RELEASE__CORPORATE_ACTIONS_FEBRUARY_2026.pdf

chimex38:
I will give you some tip if you can tip me to buy Tip.

Be careful though, cuz at just the tip of it, I might just be at my tipping point. Why?

Cuz I just gave a tip to a bartender whos removing the tip from my bottle. Hope I ain't too tipsy?

Just sipping a sip at a time from the tip

#cruise
#Dont take me serious
#Do your DD on stocks.

Streetinvestor2:
Debt can be a leverage in business as long as u can service the interest. And still have something for yourself no matter how small.It is allowed in business. You can never be classified as holder of none performing debt or be rated as bad by rating. If you believe otherwise go and ask the minister of finance of present government.

floval:
Guys, I’m considering investing ₦2 million in the short term, and I’m currently looking at Access Bank and Oando. What would you suggest? Your responses and recommendations would be greatly appreciated.

mikeapollo:
They are going to raise fresh equity, convert some trade payables to equity, and issue other long-term concessionary debt instruments with more favourable interest rates. Oando has been relying on a lot of short term bank loans with high interest rates and that is what is causing the huge annual finance costs. That needs to change.

emmanuelewumi:
I will write about the negative vibes others can write about the positive vibes of Oando


Shareholders fund is negative N553 billion

Debt is N3 Trillion

Finance cost is N59 billion

Working Capital is negative N3.2 Trillion

Net operating cash flow is negative N147 billion

Free Cash Flow is negative N259 billion.

KarlTom:
Listed shares ~ 12,431,412,004
Treasury = 4,279,042,004
OS = 8,152,370,000

PuristForest:
Leave Access and Oando, Buy univinsure

ppogba:
Any prophet that sees a merger of GT with another bank should rather go back to the school of prophets.

The same GT that refused to cherry pick since the time of Soludo through the time of Sanusi when it was fashionable to do so MAY LIKELY NEVER contemplate a merger.

This are the kind of " over my dead body" situations for the founding fathers of the bank.

Sunrisepebble:
I can confirm he has been buying GTB but not sure if it’s for merger purposes

faoogoke:
It seem Otedola is acquiring more FBN shares in anticipation of seeing through merger with GTB.

Still speculative though.

Kaczynski:
Dude needs to fire his security advisor . His investment strategies are not so good.

aj8:
Custodian should do above 60.00 but buy below 40 . Estimate 6 months.