Period Under Review: Half Year 2026
Current Share Price: N140.00
Latest Final Dividend: N6.25
Latest Interim Dividend: NIL
Estimated Beta Value: 0.52x
Estimated Fair Value: N195
Analyst: Jeariogbe Tunde Segun
The Company
NAHCO Plc (Nigerian Aviation Handling Company Plc) was incorporated on December 29, 1979, as a private limited liability company to provide aircraft handling services at Nigerian airports. It commenced operations in 1981 following the Federal Government’s decision to commercialize aviation ground handling services previously managed by the Federal Airports Authority of Nigeria (FAAN). Over the years, the company expanded its operations beyond passenger and ramp handling to include cargo handling, aircraft cleaning, aviation security, crew transportation, warehousing, and other aviation support services, making it one of the leading ground handling companies in the country.
In 2005, NAHCO was privatized, marking a significant milestone in its growth and operational efficiency. The company was subsequently listed on the Nigerian Exchange (NGX), giving it access to capital for expansion and modernization. Today, NAHCO operates in major airports across Nigeria and serves numerous international and domestic airlines.
Through continuous investment in modern equipment, staff training, and technology, the company has maintained a strong reputation for safety, reliability, and operational excellence, while expanding into logistics and export processing to support Nigeria’s growing aviation and trade sectors.
NAHCO Investment Report
NAHCO Plc delivered an impressive financial performance for the half-year ended June 30, 2026, driven by sustained growth in its aviation ground handling and cargo businesses. Turnover increased by 9.36% to ₦35.36 billion from ₦32.33 billion in the corresponding period of 2025, reflecting improved business activities and stronger demand for its services. Operating profit also rose by a 23.22% significant to ₦14.53 billion, an indication that the company’s core operations remained resilient despite a 25.38% increase in cost of sales. More importantly, lower operating expenses, depreciation, and finance costs helped strengthen earnings quality.
The company’s profit remained robust, with Profit Before Tax (PBT) rising by 21.84% to ₦14.37 billion, while Profit After Tax (PAT) grew by 22.15% to ₦10.85 billion, compared to the ₦8.88 billion recorded in the first half of 2025. The 43.27% reduction in operating expenses, depreciation by 38.79%, and finance costs by 21.31% demonstrates effective cost management and improved operational efficiency. Although net finance income declined, the impact on overall earnings was limited due to the strong performance of the core business operations.
From an investment perspective, NAHCO Plc continues to demonstrate a strong earnings momentum, healthy profit margins, and efficient cost control, making it an attractive company for medium- to long-term investors. The consistent growth in revenue and profits suggests that it is well positioned to benefit from increasing air travel, cargo movement, and export activities in Nigeria. Investors should, however, monitor future operating costs and macroeconomic factors such as inflation and foreign exchange volatility.
Overall, the 2026 half-year result supports a BUY recommendation for long-term investors, as the company’s fundamentals remain strong with potential for sustained earnings growth and attractive shareholder returns.
NAHCO Plc’s Statement of Financial Position for the half-year ended June 30, 2026 reflects a stronger balance sheet and better financial stability. Total assets increased by 17.20% to ₦51.69 billion, driven largely by the 27.50% growth in non-current assets, indicating the continued investment in operational infrastructure and long-term capacity expansion. Current assets also rose by 6.34%, supporting the company’s liquidity position. On the liabilities side, total liabilities grew marginally by 1.14%, while non-current liabilities declined by 5.06%, suggesting prudent debt management and a reduction in long-term obligations. Consequently, net assets expanded significantly by 41.92% to ₦24.66 billion, while retained earnings surged by 50.13% to ₦21.93 billion, reflecting the company’s ability to generate and retain profits for future growth.
From an investment standpoint, NAHCO’s balance sheet demonstrates its improving financial strength, supported by a growing asset base, controlled liabilities, and the substantial growth in shareholders’ funds. The strong increase in retained earnings provides management greater financial flexibility to fund expansion, modernize equipment, and sustain dividend payments without excessive borrowing. Although the increase in outstanding shares may slightly dilute earnings per share, the company’s overall financial health remains robust. When the foregoing are combined with its strong half-year earnings performance, NAHCO Plc remains fundamentally attractive, supporting a BUY recommendation for medium- to long-term investors seeking exposure to Nigeria’s expanding aviation and logistics sector.
Financial Strength/Solvency Ratio
NAHCO Plc’s financial strength improved considerably during the half year ended June 30, 2026, reflecting a stronger and more resilient capital structure. The company’s Debt Ratio declined to 52.29% from 60.60% in the corresponding period of 2025, indicating that a smaller proportion of its assets is financed by liabilities. Similarly, the Debt-to-Equity Ratio improved significantly to 1.10x from 1.54x, suggesting a reduced dependence on debt financing and a healthier balance between borrowed funds and shareholders’ equity.
Furthermore, the Equity Ratio strengthened to 47.71% from 39.40%, highlighting the increasing contribution of shareholders’ funds to financing the company’s assets. The stock’s Beta of 0.52 also indicates relatively low price volatility compared with the overall market, making it less risky for conservative investors.
From an investment perspective, these solvency indicators reinforce the positive outlook for NAHCO Plc. The combination of declining leverage, improving equity financing, and low market volatility suggests the company is becoming financially stronger while maintaining a conservative risk profile. This improved capital structure enhances its capacity to finance future expansion, withstand economic uncertainties, and sustain earnings growth. When considered alongside the company’s strong half-year earnings performance, NAHCO Plc remains fundamentally attractive and supports a BUY recommendation for medium- to long-term investors seeking stable growth and relatively lower investment risk.
Profitability Analysis
NAHCO Plc recorded a stronger profit in the first half of 2026, demonstrating its ability to convert revenue into higher earnings despite operating in a challenging business environment. The company’s EBIT Margin improved to 41.10% from 36.47% in the corresponding period of 2025, while the Pre-Tax Margin increased to 40.64% from 36.47%. These improvements indicate the healthy combination of the prevailing enhanced operating efficiency, better pricing power, and effective cost management. Although the Cost of Sales-to-Turnover Ratio rose to 46.69% from 40.73%, reflecting higher direct operating costs, the company successfully maintained strong profitability through disciplined expense control and increased operating income.
The company’s returns on investment remained impressive. Return on Assets (ROA) improved to 20.98% from 20.13%, demonstrating greater efficiency in utilizing its asset base to generate profits. The Effective Tax Rate remained stable at 32.46%, slightly lower than the 32.80% recorded in the previous year, which supported the growth in net earnings. While Return on Equity (ROE) moderated to 43.98% from 51.10%, the ratio remains exceptionally strong, reflecting the company’s continued ability to generate substantial returns for shareholders despite a larger equity base arising from retained earnings.
From an investment perspective, NAHCO Plc continues to exhibit strong profit fundamentals that support a positive long-term outlook. The improvement in operating and pre-tax margins, coupled with robust returns on assets and a still-high return on equity, confirms the company’s strong earnings capacity and operational resilience. Although rising cost of sales warrants close monitoring, the company’s ability to sustain superior margins and generate consistent profits positions it favourably within the aviation services sector. Overall, the profitability metrics reinforce a BUY recommendation for medium- to long-term investors, as NAHCO remains well positioned to deliver sustainable earnings growth, attractive shareholder value, and stable dividend prospects.
Efficiency Analysis
NAHCO Plc recorded an improvement in its operating efficiency during the first half of 2026, driven primarily by stronger cost management. The Operating Expenses-to-Turnover (OPEX/TO) Ratio declined significantly to 12.48% from 24.07% in the corresponding period of 2025, indicating that the company required a much lower proportion of revenue to cover operating expenses. This reflects enhanced operational discipline and improved cost efficiency. However, the Turnover-to-Total Assets (Asset Turnover) Ratio moderated slightly to 0.68x from 0.73x, suggesting that while the company expanded its asset base, revenue growth did not increase at the same pace. Meanwhile, the Working Capital Ratio improved to 1.05x from 1.02x, indicating that current assets remain sufficient to cover short-term obligations and support day-to-day operations.
From an investment perspective, NAHCO’s efficiency indicators remain encouraging despite the slight decline in asset turnover. The substantial reduction in operating expenses relative to revenue is expected to continue supporting higher profit margins and earnings growth. Although Working Capital Turnover slowed as the company maintained a stronger liquidity position, this is not necessarily a negative development, as it provides greater financial flexibility to support future expansion and absorb business shocks. Overall, the company’s operational efficiency, combined with its strong profitability and solid balance sheet, reinforces a BUY recommendation for medium- to long-term investors seeking sustainable earnings growth and stable shareholder returns.
Investment/Valuation Analysis
NAHCO Plc’s valuation metrics reflect a company that continues to deliver earnings growth despite a significant appreciation in its share price. At the release of the half-year 2026 results, the stock traded at ₦148.50 each, representing a 35.00% increase from ₦110.00 in the corresponding period of 2025. Earnings Per Share (EPS) improved by 6.88% to ₦4.87, while Book Value per Share (BVPS) rose by 24.18% to ₦11.07, reflecting sustained profitability and a stronger equity base. The increase in book value underscores management’s ability to create long-term shareholder value through retained earnings and prudent capital management.
The stock’s valuation multiples suggest that investors have become more optimistic about the company’s future growth prospects. The Price-to-Earnings (P/E) Ratio increased to 30.50x from 24.15x, indicating that the market is willing to pay a higher premium for NAHCO’s earnings due to its consistent financial performance and growth outlook. Consequently, the Earnings Yield moderated to 3.28% from 4.14%, reflecting the faster rise in share price relative to earnings growth. Meanwhile, the Price-to-Book Value (PBV) ratio increased slightly to 13.41x, confirming that the market continues to value the company well above its accounting book value. The sharp decline in CAPEX per Share to ₦1.73 from ₦7.53 may indicate that major capital investments undertaken in previous periods are beginning to yield returns, reducing the need for heavy capital expenditure in the current period.
From an investment perspective, NAHCO Plc remains a fundamentally strong company with attractive long-term growth prospects. While the current valuation suggests that much of its near-term growth expectations have been priced into the stock, the company’s strong earnings momentum, expanding shareholders’ equity, sound balance sheet, and improving operational efficiency continue to support a positive outlook. Investors seeking long-term capital appreciation may continue to accumulate the stock, although short-term investors should be mindful of the relatively high valuation multiples. Overall, NAHCO Plc retains a BUY recommendation for long-term investors, with expectations of sustained earnings growth, stable dividend payments, and continued value creation as Nigeria’s aviation and logistics sectors expand.
Valuation
The current market price of ₦148.50 is very close to the estimated fair value based on a 15x forward P/E, suggesting the stock is fairly valued. If NAHCO sustains its current earnings growth and the market continues to assign a premium valuation due to its strong fundamentals, the stock has the potential to trade within the ₦175–₦195 range over the next 12 months. Therefore, the estimated intrinsic (fair) value is about ₦175 per share, implying an upside potential of approximately 18% from the current market price. This supports a BUY for long-term investors while short-term investors should expect periodic price corrections given the stock’s relatively high valuation.
Final Investment Verdict
NAHCO Plc delivered an impressive half-year 2026 performance, reinforcing its position as one of the strongest companies in Nigeria’s aviation services sector. Revenue growth of 9.36%, 23.22% growth in operating profit, 21.84% increase in profit before tax, and 22.15% rise in profit after tax demonstrate resilient earnings despite inflationary pressures and a challenging operating environment. The company also strengthened its balance sheet through higher shareholders’ funds, lower leverage, improved equity ratio, and a 50.13% increase in retained earnings. Profitability ratios remain robust, with higher EBIT and pre-tax margins, while operational efficiency improved significantly through lower operating expenses relative to turnover. These fundamentals indicate that management continues to execute its growth strategy effectively.
From a valuation perspective, NAHCO’s current share price of ₦148.50 reflects much of its near-term growth potential, resulting in a relatively high P/E ratio of 30.50x and PBV of 13.41x. While the stock appears expensive on traditional value measures such as the Graham Number, its premium valuation is supported by strong earnings growth, sound financial strength, low market risk (Beta of 0.52), and positive prospects for Nigeria’s aviation and logistics industries. Based on projected full-year earnings, the stock’s estimated fair value lies around ₦175.00 per share, representing an upside potential of approximately 18%.
Recommendation: BUY (Medium- to Long-Term).
NAHCO Plc remains a fundamentally strong growth stock with excellent earnings quality, improving operational efficiency, and a solid balance sheet. Long-term investors should consider accumulating the stock, especially on market pullbacks, as the company is well positioned to benefit from increasing passenger traffic, cargo volumes, export logistics, and continued expansion within the aviation sector. Although the current valuation limits short-term upside and may expose the stock to occasional profit-taking, its strong fundamentals, healthy dividend potential, and sustainable growth outlook justify a BUY recommendation for investors with a medium- to long-term investment horizon.
