Nigerian Aviation Handling Company Plc (“NAHCO” or “the Group”) recently released its audited financial statements (AFS) for the year ended December 2024 (FY ’24) to the market. A quick look at the results shows an important improvement in revenue (topline) and net income (bottom-line), as the two climbed by doble and triple digits growth.
Aircraft handling drives top-line expansively
Year-on-year (y/y), the top-line jumped by 88.5% y/y to ₦53.54 billion in FY ‘24, compared to ₦28.40 billion achieved in FY ’23. Markedly, the sturdy growth in the top-line was chiefly driven by improved performance of the Aircraft handling services, which grew by 114.9% y/y to ₦36.60 billion, and contributed 68.4% (2023: 62.9%) to the total revenue. Cargo handling services also saw expansion, posting a growth of 38.8% y/y at ₦9.96 billion and contributed 18.6% (2023: 25.3%) to the revenue. Revenue from non-Aircraft/Cargo handling services summed up to ₦6.98 billion, representing a growth of 107.8% y/y, and contributed 13.0% (2023: 11.8%) to the total revenue.
Source: NAHCO Plc FY-2024 Data,NGX
Note: Aircraft handling income includes invoices raised for check-in formalities, passenger profiling, security, and baggage handling (loading and offloading). Revenue from non-Aircraft/Cargo handling services includes disinfection & other services, and equipment rental & maintenance services. For the equipment rental & maintenance services, the group leases its equipment to airlines for services that are not covered in the Standard Ground Handling Agreement (SGHA).
Source: NAHCO Plc FY-2024 Data, NGX
The other income line item grew by 37.8% y/y to settle at ₦1.04 billion, clearly driven by sundry income, which rose by 1,122.1% y/y to ₦469.90mn. Note: the sundry income includes commission received, agents’ registration fees and insurance claims. The significant changes from prior year’s number was due to an increase in the registration fees and commission received during the year. FX gains settled at ₦293.77mn.
Note: FX gains consist of a realized exchange gain of ₦73.15mn.
Inflationary pressure reflects on cost related items
High inflationary environment and pressured energy costs undesirably impacted on cost related items. Cost of goods sold (COGS), for example flipped over by 52.7% y/y to ₦52.72 billion, however, it was lower than the growth rate posted by the top-line, resulting in improved Gross margin at 61.8% (2023: 52.8%). Operating expenses (OPEX) recorded a significant expansion by 104.2% y/y to ₦14.09 billion, following 79.7% y/y spiked in personnel expenses. Note: personnel expenses covered 29.2% of the OPEX. Nonetheless, Operating profit rose by 123.9% y/y to ₦19.84 billion, helped by robust topline growth and subdued expansion on COGS.
Elsewhere, Net finance costs rose by 524.3% y/y to ₦1.14 billion, amid increased Finance cost paid on servicing existing Naira denominated loans, put at ₦1.28bn, which overshadowed Finance income reported at ₦145.98mn.
Source: NAHCO Plc FY-2024 Data,NGX
Bottom-line rises by 233.8% y/y
At the bottom line, the Company posted a pre-tax profit of ₦18.70 billion, representing a growth of 115.5% y/y. After accounting for income tax expenses, which summed up to ₦5.84 billion (combined effects of income, tertiary education, police trust fund, NASENI fund, and under provision taxes), the profit after tax (bottom line) settled at ₦12.87 billion, representing a growth of 132.2% y/y, compared to FY ’23 number.
Source: NAHCO Plc FY-2024 Data, NGX
Based on the PAT above, Earnings per share (EPS) of ₦6.60 was achieved, compared to ₦2.84 kobo achieved in FY ’23.
Net asset continues the upward trend
The Group’s Total assets (TA) rose by 71.9% y/y to settle at ₦46.95 billion. Growth here was chiefly supported by Property, plant and equipment, which grew by 209.4% y/y, and represented 49.7% of the TA. Markedly, the Property, plant and equipment constitute 95.7% of total non-current assets (NCA). The NCA grew by 181.8% y/y, highlighting the Group’s business structure, where the bulk of investments are seen fixed assets. On the liabilities side, total liabilities (TL) rose by 77.0% to ₦26.88 billion. The growth here was helped by trade and other payables, which grew by 59.8% y/y and represented 51.6% of the total TL. With the faster increase in TA compared to TL, Shareholders’ fund rose modestly by 65.3% y/y to ₦20.04 billion.
Source: NAHCO Plc FY-2024 Data, NGX
Dividend income for reward of shareholders’ investment
The Board of Directors is recommending a final dividend of ₦5.94 per share to shareholders whose names will be in the company’s register at the close of business on Monday, 12 May 2025. At the closing market price of ₦65.50 posted on Thursday, 17 April 2025, dividend yield (DY) stands at 9.07%.
Valuation
Using the sum-of-the-parts valuation (SOTP) and relative valuation methodologies (RVM), we arrive at a target price (TP) of ₦77.05 per share. Our TP here reflects a lower net debt position, increased in its capacity utilization on aircraft and cargo handling services, and improvement in capital structure management. At our TP price above, we therefore adjust our prior TP of ₦45.45 established in H1 ’24 earnings update. At the current TP, NAHCO currently carries an upward potential of 17.6% when compared to the recent closing market price of ₦65.50 per share.
Based on the above valuation and the compelling business case for the company going forward, we maintain a BUY rating on the company’s shares at the current market price of ₦65.50 per share.
Note: Our TP here has been forecasted for a period up to nine months (9M-TP). Therefore, it covers period up to December 2025. However, the 9M-TP is amenable to periodic adjustment as earnings and sensitive Group’s information, or data are made available.
See the table below for the company’s detailed 5-year performance highlights.
NAHCO Plc FY-2024 Data, NGX
Brief about NAHCO Plc
The Nigerian Aviation Handling Company Plc (NAHCO) is West Africa’s leading ground handling service provider with presence in all major Nigerian airports. Founded in December 1979, it has since grown into a multi-billion Naira company with diversified investments in energy, logistics, food and beverages, aviation training and development of a free trade zone company.
NAHCO offers a comprehensive portfolios of aviation handling services, among which are; Aircraft Handling; Passenger Handling, Cargo Handling, Aviation Training and Security, Aircraft Disinfection, Charter Operations and Premium Lounge, and Energy and Power Distribution and Leasing of Ground Handling Equipment. The company has consistently invested heavily in the acquisition of more Ground Support Equipment (GSE) to boost her operations. NAHCO places a high premium on safety and security of passengers and their luggage in line with international conventions and standards.
