• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Business News

Sticky cost structure mars Nascon Allied Industries’ profit margins

Meristem by Meristem
May 24, 2019
in Business News, Company Results, Stock Market
NASCON’s Q1:2019 financial result
Share on FacebookShare on TwitterShare on Linkedin

Flattish Growth amidst Mixed Sales Performance: NASCON’s Q1:2019 financial result showed some marginal improvement as its revenue grew by 0.77% to N6.82 billion relative to N6.78bn in Q1:2018. The company recorded impressive growth in its Western and Eastern markets’ sales, which rose by 47.26% and 12.74% respectively.

The recorded growth was driven by its diversification to corporate clients rather than retail customers. However, sales from its Northern market, which currently accounts for 58.90% (vs 69.90% in Q1:2018) of revenue, declined by 15.90% (N4.01 billion vs N4. 73 billion).

The company has resumed vegetable oil production at its Ota Plant with locally-sourced crude palm oil. It is planning to resume tomato paste production by the end of Q2:2019. In the near term, we expect these collective factors coupled with the location of its new 250,000mt salt factory at Apapa, which gives it access to industrial salt users in the region, to steer topline growth, as such we maintain our revenue forecast of NGN27.05bn in 2019FY, a growth of 5.00% over 2018FY.

RelatedStories

NASCON

Nascon names Aderemi Saka as Deputy Managing Director, appoints company secretary 

February 28, 2025
Dangote Sugar

Dangote Sugar merger with NASCON to be completed via scheme of consideration

August 30, 2023

Steady Increase in Cost of Sales Stifles Profitability: Profits margins remain strained, largely due to the mounting cost of sales which rose by 8.38% (N5.09 billion vs N4.69 billion in Q1:2018). The minimal increase in revenue did not impact the cost to sales as it weakened to 74.46% (vs 69.42% in Q1:2018).

We note that the cost of raw materials rose by 4.69% due to the company’s exposure to foreign exchange rate and other associated costs. Operating expenses also maintained its upward trend, rising by 9.57% while the OPEX to Sales settled at 10.70%. Accordingly, gross profit and net profit dropped by 16.49% and 34.59%, settling at N1.73 billion and N0.69 million, respectively.

Drop in Net Margin Dampens ROE: Return on Equity settled lower at 32.19% in Q1:2019 (vs 44.86% in Q1:2018). Although asset turnover and financial leverage declined to 0.84 and 2.46 (vs 0.87 and 2.49 in Q1:2018) respectively, much of the pressure came from the weak net margin, which dipped to 15.69% from 20.64% a year ago. In line with our expectations of higher revenues, we forecast a marginal increase of 2.41% in the company’s 2019FY net profit to N4.02 billion from N3.93 billion in FY 2018.

Recommendation: The company’s performance is in line with our projections, as such, our expected EPS and target PE are unchanged at NGN1.52 and 11.75x respectively, which leaves our target price for Dec 2019 at NGN17.86. This gives an upside potential of 5.06% to its closing price of NGN17.00 on May 23, 2019. We, therefore, recommend a HOLD.
Company.


Contact Information
Brokerage and Retail Services
topeoludimu@meristemng.com (+234 905 569 0627)
abisoyeoludipe@meristemng.com (+234 708 000 7861)


Follow us for Breaking News and Market Intelligence.
Tags: Nascon Allied Industries PlcNASCON’s Q1:2019 financial result
Meristem

Meristem

Related Posts

NASCON
Appointments

Nascon names Aderemi Saka as Deputy Managing Director, appoints company secretary 

February 28, 2025
Dangote Sugar
Company News

Dangote Sugar merger with NASCON to be completed via scheme of consideration

August 30, 2023
Nascon confirms Thabo Mabe as managing director, Fatima Aliko-Dangote as non-executive director
Appointments

Nascon confirms Thabo Mabe as managing director, Fatima Aliko-Dangote as non-executive director

May 30, 2023
NASCON records  84% increase in profit
Corporate Updates

NASCON records 84% increase in profit

May 30, 2023
Dangote Cement
Company News

Nigeria’s largest conglomerate, Dangote Group, spends N1 trillion on input cost in 2022

March 24, 2023
Nascon Allied Industries Plc: Increase in sale of goods boosts revenues.
Dividends

Nascon Allied Plc announces final dividend payment of N0.40 to shareholders

March 4, 2022
Next Post
Nigeria's Coastal Rail Project

Transportation receives fresh boost as FG okays $2.3 billion coastal rail project

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • BREAKING: FG declares Tuesday as public holiday to honour the late former President Buhari
  • Nigeria’s broadband penetration crawls to 48.81% in May, few months to 70% target
  • NucleusIS rebrands as RIGO, unveils ambitious plan to digitize Africa’s healthcare economy 

Follow us on social media:

Recent News

Breaking

BREAKING: FG declares Tuesday as public holiday to honour the late former President Buhari

July 14, 2025
Broadband infrastructure

Nigeria’s broadband penetration crawls to 48.81% in May, few months to 70% target

July 14, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics