Three of Nigeria’s four biggest cement makers had their recommendations cut by HSBC Holdings Plc on concern fuel shortages in Africa’s biggest oil-producing nation will cause earnings to “disappoint.”
Militant attacks have disrupted pipeline supplies from the Niger Delta oil region, cutting output from four state-run refineries and causing the West African nation to rely on imports to meet 80 percent of daily domestic needs. Fuel shortages have worsened since November after companies including Exxon Mobile Corp. and Total SA stopped importing oil into the country because of debt owed to them by the government.
Nigerian cement producers “have been operating with unreliable and expensive fuel supplies for around 18 months,” London-based analyst Umulinga Karangwa wrote in an e-mailed note dated today.
Benue Cement Co., Nigeria’s biggest cement maker by market value, and Cement Co. of Northern Nigeria Plc had their recommendations cut to “neutral” from “overweight” while Ashaka Cement Plc was reduced to “underweight” from “neutral,” Karangwa wrote. Ashaka’s price estimate was reduced to 11 naira from 13.60 naira while Cement Northern’s was cut to 17 naira from 19 naira.