CCNN earnings recover on strong prices

The Cement Company of Northern Nigeria (CCNN) reported sizeable growth across all profit lines in the first quarter of 2017. In line with trend observed across other industry players, strong cement prices (up around 70 per cent YoY) weighed on CCNN’s cement volume but still provided greater positive impact on topline as revenue rose 22 per cent YoY to NGN4.4bn (US$13.9m), Vetiva Research said in a note on CCNN's results.

Energy supply, particularly LPFO, remained stable over the quarter (allowing for stable cement production) thanks to lower demand from bigger cement producers who increased usage of gas, the research house added. Amidst these, 1Q17 gross profit doubled to NGN1.6bn, 38 per cent ahead of Vetiva's estimate.  Notwithstanding a surge in OPEX (up 114 per cent YoY), EBIT over the three-month period remained strong, up 84 per cent YoY to NGN727m. Overall, 1Q17 profit after tax rose 112 per cent YoY to NGN514m, supported by lower effective tax rate (25 per cent versus 1Q16: 32 per cent) and a low 2016 comparison base. (Source: Proshare Nigeria Ltd)