LAGOS, Nigeria — Renaissance Capital Africa (RCA) has raised its Dangote Refinery valuation to ₦700.41 per share, a 33.4% premium to the ₦525 IPO offer price, after the refinery’s nine-month earnings beat its estimates.
The upward revision, in a company update dated October 16, 2026 and titled “Stronger refining margins drive earnings outperformance”, lifts the previous estimate of ₦619.47 by 13.1%. It implies an equity value of $63 billion on 120.13 billion existing shares.
After adding net Dangote Refinery IPO proceeds of ₦2.11 trillion and 4.1 billion new shares, RCA’s valuation stands at ₦694.28 per share, a 32.2% premium to the offer price.
Nine-month results behind the Dangote Refinery valuation
Dangote Petroleum Refinery and Petrochemicals FZE reported a net profit of $4.73 billion for the nine months to September 30, 2026, reversing a net loss of $117.2 million a year earlier.
- Revenue: up 144.5% to $22.48 billion, against RCA’s estimate of $21.07 billion
- EBITDA: $5.52 billion from $627.6 million, against an estimate of $4.10 billion, with the margin widening to 24.6% from 6.8%
- Net profit: above RCA’s estimate of $2.82 billion
- Financial position: net cash of $650.8 million, against net debt of $1.73 billion a year earlier, with cash holdings of $6.69 billion
The outperformance was largely a third-quarter story. Revenue reached $8.57 billion, 19.7% above RCA’s estimate. EBITDA hit $2.92 billion, 94.8% above the $1.50 billion forecast and above the $2.60 billion posted in the first half. The EBITDA margin rose to 34.1% from 18.7%.
Cash operating costs of $5.65 billion came within 0.2% of the estimate, suggesting better refining margins, not lower costs, drove the result. RCA added that crude cost lags and hedging may also have contributed.
Refining margins surge across key markets
RCA attributed the beat to a sharp rise in refining cracks in the third quarter, particularly in the Atlantic Basin.
- US Gulf Coast jet fuel and gasoil cracks averaged $75.59 and $72.57 per barrel, against $56.40 and $44.40 in the second quarter.
- The US Gulf Coast refining margin reached $62.08 per barrel in September, the highest in RCA’s data, which begins in July 2025.
- In Rotterdam, RCA’s closest benchmark for the refinery’s Brent-linked crude, the average margin rose to $42.51 from $24.50.
Kanyi Daily reports that RCA cited OPEC as attributing the rally to tight middle-distillate supplies, with supply losses in Eastern Europe, strong US diesel exports to Europe, low inventories and refinery maintenance supporting prices.
Petrol, diesel and jet fuel made up 86% of the refinery’s second-quarter product yield, so it is well placed to benefit. About 88% of its June jet fuel output exceeded Nigeria’s domestic demand and went to international buyers. The refinery reported that it was Europe’s largest jet fuel supplier in July and August.
RCA raises 2026 earnings forecasts
RCA lifted its full-year 2026 gross refining margin forecast to $35.81 per barrel from $27.55. It raised its revenue forecast 7.4% to $30.24 billion and its EBITDA projection 34.6% to $7.24 billion.
Net income on a run-rate basis rose 47.4% to $5.32 billion. Using reported nine-month profit plus its fourth-quarter estimate, RCA projects full-year net income of $5.98 billion. The forecasts imply fourth-quarter EBITDA of $1.72 billion, 41% below the third quarter, because cracks are expected to moderate. Forecasts for 2027 to 2029 are unchanged.
Only about 8.5% of the ₦80.94 per-share increase came from the 2026 forecast changes. The rest reflects the net cash position, a later valuation date and revised exchange-rate and discount-rate assumptions.
Dangote Refinery IPO price against peers
At ₦525, RCA puts the refinery’s pre-listing market capitalisation at ₦63.07 trillion, or $47.22 billion at ₦1,335.50 to the dollar. After deducting net cash, the offer price implies an enterprise value-to-EBITDA multiple of 6.43 times estimated 2026 earnings and 7.31 times projected 2027 earnings.
Both are below the 7.74 times weighted average for RCA’s refining peers. RCA’s own valuation implies 8.61 times 2026 EBITDA, a premium it attributes to the refinery’s scale and low cash operating costs, which management puts at $2.40 to $2.50 per barrel.
Expansion timeline and risks to the valuation
The base case assumes the second train is commissioned in January 2030, lifting capacity from about 700,000 to 1.4 million barrels per day. Management targets 2029, with expansion spending of about $14.3 billion, partly funded by IPO proceeds. RCA estimates a 2029 start would lift the valuation to ₦731.80 per share, while a delay to 2031 would cut it to ₦671.83.
RCA cautioned that the results announcement gave headline figures without production volumes, realised prices or a cost breakdown below EBITDA. It will revisit its estimates when the full nine-month accounts are published.
It named refining margins, taxation and exchange rates as the main risks:
- The Middle East conflict is the biggest swing factor for margins, and an easing of tensions could cause cracks to fall.
- Terminal value accounts for 72.1% of enterprise value, so the valuation depends heavily on how long elevated margins last.
- RCA assumes an effective tax rate of 12.1%, below the 15% minimum management has provided for.
- Every 1% move in the naira changes the valuation by about ₦7 per share.
The report was for information only. It was not independent investment research and was not a recommendation to buy or sell securities.
