Dangote Sugar reported a significant (41.5% y/y) growth in revenue in Q1 2021, as the firm continues to gain more grounds in the Nigerian market in line with our expectations. Net Income grew 30.3% y/y to N8.30bn for Q1 2021. We forecast sustained Revenue growth in 2021 but we expect elevated cost to moderate growth in bottom-line for FY 2021.
Dangote Cement outpaced our topline expectations as the Revenue grew significantly, up 33.5% y/y to N332.7bn in Q1 2021 from N249.2bn in Q1 2020. The growth in Group Revenue was supported by stronger volume growth (+18.7% y/y) and better price per tonne (+12.4%) y/y from both its Local and Pan African operations. Despite significantly higher Finance Cost (+180.7% y/y), Pre-tax Income remained resilient, up 47.7% y/y to N130.1bn in Q1 2021 from N88.1bn in Q1 2020 bringing EPS to N5.29/s in Q1 2021 (Q1 2020; N3.60/s).
Sustained buying interest in the Nigerian equity market supported a bullish weekly close for the second consecutive week. Notably, the benchmark All Share Index (ASI) closed higher on all trading days of the week during the holiday-shortened week. The NSE-ASI appreciated by 0.8% w/w to close at 39,494.7 points while investors’ wealth improved by N147.6bn to print at N20.6tn.YTD loss moderated to 1.9% at the close of the week. Activity level weakened during the week, as average volume and value traded declined 21.0% w/w and 19.9% w/w to print at 280.1m units and N3.2bn, respectively.
Last week, the domestic equities market erased all the gains from the prior week, primarily triggered by losses in large cap counters across the Industrial and Telecoms sector. The benchmark NSEASI shed 1.6% w/w to settle at 39,198.75 points as market capitalization fell to N20.5tn while YTD loss worsened to 2.7%. Activity level was mixed as total volume traded declined by 8.2% w/w, whilst total value traded was up 32.0% w/w.
In the past week, the National Electricity Regulatory Commission (NERC) highlighted plans to review electricity tariffs for eleven (11) discos. The potential tariff hike stems from the Multi-Year tariff review, which allows the NERC to apply minor reviews to the tariff template every six (6) Months. Reviews can be applied to the pricing template to reflect changes in the parameters such as inflation, exchange rate, and available generation capacity and capital expenditure. The NERC noted it would consult with stakeholders before applying a hike.
Recently, International Breweries Plc (INTBREW) published its audited FY-2020 financial result. According to the report, Revenue rose by 3.4% y/y to N136.8bn, as strong Revenue recovery in H2-2020 pulled Revenue numbers higher, reflecting the impacted of reduced restrictions on on-trade channels and social activities. Nevertheless, huge operating leverage continues to weigh on the company’s performance denting improvement in capital structure. Overall, the company’s Loss before and after-tax reduced to N20.2bn and N12.1bn respectively in FY-2020. Below, we review the company’s performance and provide our expectations for the year.
