Financial Modeling

Equity research · NGX: DANGCEM

Dangote Cement PLC — Equity Research Model

Key result · Implied ₦141 vs. ₦493 share price → Sell

Case study by Blessing Osamudiamen, ACA · Chartered Accountant & Financial Analyst

Implied share price: ₦141
Share price, 31 Dec 2024: ₦493
WACC: 24.2%
Implied downside: −71%

1 · Problem statement

What is Dangote Cement worth, and does its ₦493 share price (31 Dec 2024) offer upside?

2 · Methodology

Three-statement forecast for 2025–2029 driving a DCF at a 24.2% WACC, after auditing and correcting the model's formula errors.

Restructured the reported 2022–2024 statements into one consistent model layout.
Drove the 2025–2029 forecast from an input sheet: growth, cost ratios, working capital and capex.
Linked the income statement, balance sheet and cash flow — the balance sheet balances every year.
Discounted free cash flow at a 24.2% WACC with a 1.9% terminal growth rate, after tracing and correcting formula errors.

Excel
3-Statement Model
DCF
CAPM / WACC
Sensitivity
Model Audit

3 · Key findings

2024 revenue rose 69% to ₦2.19tn with a 38.5% EBITDA margin and ₦1.03tn net profit.
Revenue grew 82% from 2022 to 2024, but gross margin fell from 67.6% to 59.5%.
Finance income was 66% of 2024 profit before tax — earnings lean on non-operating income.
Across WACC of 22–26.5% and terminal growth of 1.9–8%, the implied price ranges ₦131–₦178; no case reaches ₦493.

4 · Strategic recommendations

Reconcile growth and discount rate: forecast growth of 10–12.5% sits below the 17.95% risk-free rate.
Review capex and tax inputs: capex is fixed at 3× depreciation and tax at 32% (2024 effective rate: 12.7%).
Value the subsidiary stakes, carried at cost (₦249bn); group accounts would capture their full value.

The “so what?”

Reported earnings are strong, but the corrected DCF values DANGCEM at ₦141 against ₦493 — a Sell call, 71% below the market price.

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