Renaissance Capital Raises Dangote Refinery’s Valuation By 33.4% to N700

Renaissance Capital Africa (RCA) has raised its valuation of Dangote Petroleum Refinery and Petrochemicals FZE to N700.41 per share, representing a potential 33.4 per cent upside from the refinery’s initial public offering (IPO) price of N525 per share.

The investment research firm attributed the revised valuation to stronger refining margins and better-than-expected financial and operational performance in the first nine months of 2026, with revenue, earnings before interest, taxes, depreciation and amortisation (EBITDA), and net profit all exceeding its projections.

In an update at the weekend titled: “Stronger Refining Margins Drive Earnings Outperformance,” RCA highlighted the refinery’s robust earnings growth and improving financial position as key factors underpinning its more optimistic assessment.

For the nine months ended September 30, 2026, Dangote Petroleum Refinery reported revenue of $22.5 billion and net profit of $4.7 billion, marking a significant turnaround from the $117.2 million loss recorded in the corresponding period of 2025.

Revenue increased by 144 per cent from $9.2 billion in the preceding year, while EBITDA surged nearly nine-fold to $5.5 billion from $627.6 million.

The refinery’s operating cash flow also rose more than ten-fold to $3.68 billion, reflecting its growing capacity to generate cash from operations amid stronger refining margins and improved performance.

The improved earnings translated into a stronger balance sheet, with the company moving from a net debt position of $1.73 billion as of September 2025 to a net cash position of $651 million by September 2026.

The shift, alongside the stronger cash flow, it said, points to an improvement in the refinery’s liquidity and financial resilience as it consolidates its position in the domestic and international petroleum products markets.

RCA’s revised valuation offers a more bullish assessment of the refinery’s prospects following its strong nine-month performance.

However, the projected upside depends on the sustainability of refining margins, operating performance and broader market conditions.(Thisday)