₦airaland Forum

SonofElElyonRet:
$20m... Drawdown over 3 year period i.e 2024 to 2027

Dug up below

Lagos, Nigeria, August 15th, 2024 - Japaul Gold and Ventures plc. (JAPAULG.O.NL) announced today that it has secured a capital commitment of $20 million in the form of a Share Subscription Agreement (SSF) from Gem Global Yield LLC SCS (GGY).

Under the terms of the agreement, Japaul Gold will be able to draw down funds by issuing equity shares to GGY for a three-year period. The Company will control the timing of such draw downs and has no minimum draw down obligation.

Japaul Gold is previously known for providing offshore support services to the oil and gas industry and in the Nigerian oil and gas sector. It is now into the exploration and production of gold, tin, and copper among other critical minerals.

This $20 million proceeds from GEM's commitment to complete ongoing mine acquisitions and begin production of gold, copper, lead and zinc mines at Eti-Oni, in Osun State; Northern Nigeria, and other gold mines at Taruga District in Taraba State, Nigeria.

"We are very excited by the GEM commitment as it offers opportunities to scale up our operations and efforts in engaging in the global market space," stated Mr. Jegede Paul, the Chairman of Japaul Gold.

awesomeJ:
No thanks, you need the luck more, i never need any luck[b][/b].

you can hoard all the dollars you want, it's your money.

deathwing:
Abeg why do the bids and offers disappear at around 2:20pm even though trade is ongoing. Sometimes you set a trade at this time and it immediately REJECTS. Is it an NGX thing or cardinal stone thing?

Malubi:
Can i have list of good stock brockers please

sboga:
omo
dis one na public service message

as una dey read dis post, make u clear eye pay attention
we une dey read dis investos from diff tine zones dey enter d region to buy the emtpy-hen
dem dey code d entrace wid small products wey dey inside dia conglomerate business group...buh d real target dey d empty-hen...d reason dem no go disclose till d fat lady sings na not to push up d price to 2000 like a push up bra
d fat lady go sing looud dis year
dem dey come frm d east nd d west
france uk india china dem go find over the empty hen dis year
800 price go seem like a bag rice from 2005
and also d dark is still comin....but dis one na confam jist....see d volumes naw naw...
i dey give u platinum gist
lyk i dey say before...in dis game...ur a soldier na me b d genaral..we no b mates
i dey try to uplift my peopp dazzalll....if u like go buy lobbish..
isorite...see u in couple of months when the empty hen cross 1200...by may las las if not sooner

Malubi:
Can i have list of good stock brockers please

Digitron:
Mehn, it is annoying. I use other app to check the bids sha

PuristForest:
MTNN - Are the Big Bears Coming

https://www.youtube.com/watch?v=YA7b7v8xap8

Agbalowomeri:
Is this an hour delay in data feed that I'm seeing or na my palm wine eyes?

Agbalowomeri:
Is this an hour delay in data feed that I'm seeing or na my palm wine eyes?

PuristForest:
MTNN - Are the Big Bears Coming

https://www.youtube.com/watch?v=YA7b7v8xap8

emmanuelewumi:
Nahco making us proud

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

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

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

Agbalowomeri:
Let the optimism push it higher.

deathwing:
Abeg why do the bids and offers disappear at around 2:20pm even though trade is ongoing. Sometimes you set a trade at this time and it immediately REJECTS. Is it an NGX thing or cardinal stone thing?

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

emmanuelewumi:
What will you say about Sahcol.

Current PE is 16.3, if they pay 90% of earnings as dividends the dividend yield will be 5.5%, if they can continue to their earnings and dividends by 30% for the next 5 years that will be about 20% dividend yield based on the current stock price

Dividend yield plus earning growth divided by current PE

5.5+30

ogawisdom:
It's alright, I am keeping NAHCO as long as they are creating good value.

ogawisdom:
It's alright, I am keeping NAHCO as long as they are creating good value.

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

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

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

KarlTom:
ARADEL. +2.44%
CONOIL. -4.73%
ETERNA. +6.45%
OandO. +0.13%