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Dangote Petroleum Refinery and Petrochemicals FZE reported a profit after tax of $1.82 billion in the first six months of 2026, marking a significant turnaround from the $476 million loss recorded for the full year 2025 and underscoring the refinery's transition to full-scale commercial operations.

According to the company's IPO prospectus, the refinery generated revenue of $13.91 billion and EBITDA of $2.60 billion during the period. Gross refining margin improved to $24.50 per barrel, compared with $13.70 per barrel in 2025 and $10.70 per barrel in 2024. The refinery reached full crude distillation unit utilisation in the second quarter following optimisation work on its residual fluid catalytic cracker, while emerging as Europe's largest supplier of jet fuel and diesel in July.

The strong financial performance comes ahead of what is expected to be Africa's largest share sale. The company is offering 4.1 billion new shares at ₦525 per share, representing 3.30 per cent of its enlarged share capital. The public offering opens on 14 September and closes on 13 October, with listing on the Nigerian Exchange expected in late November.

The prospectus indicates that Aliko Dangote's beneficial interest in the refinery will decline from 87.27 per cent to approximately 84.39 per cent following a fully subscribed offer. The Nigerian National Petroleum Company (NNPC) Limited's stake would reduce from 6.815 per cent to about 6.59 per cent.

Valuation Estimates Point to Potential Upside

Valuation reports prepared by Chapel Hill Denham, CardinalStone Partners and Renaissance Capital place the refinery's equity value above its offer valuation.

Chapel Hill Denham estimates equity value at $62.53 billion, equivalent to ₦82.62 trillion using an exchange rate of ₦1,321.22 per US dollar. CardinalStone values the company at approximately ₦77.7 trillion, or about $58.8 billion, while Renaissance Capital places valuation in a range of $57.1 billion to $65.4 billion.

At the IPO price, Dangote Refinery is valued at about ₦65.22 trillion. Based on these estimates, Chapel Hill Denham and CardinalStone imply potential upside of approximately 27 per cent and 19 per cent, respectively, while Renaissance Capital's valuation range suggests upside potential of between 16 per cent and 33 per cent.

The three firms are serving as joint issuing houses on the transaction, alongside a syndicate of advisers led by Vetiva Advisory Services.

Chapel Hill's valuation is driven primarily by a discounted cash flow model that estimates enterprise value at $79.2 billion. The analysis shows that discounted terminal value contributes approximately 88 per cent of the total valuation, reflecting expectations of substantial long-term cash generation beyond the explicit forecast period.

Expansion Programme to Double Capacity

A central component of the refinery's growth strategy is a $14.3 billion expansion programme that will increase refining capacity from 700,000 barrels per day to 1.4 million barrels per day by 2029.

After deducting offer expenses of ₦41.49 billion, the IPO is expected to generate net proceeds of about ₦2.11 trillion, equivalent to roughly $1.5 billion at an exchange rate of ₦1,400 per dollar. This represents slightly more than one-tenth of the planned expansion cost, indicating that additional funding will be sourced from retained earnings, debt financing and potentially other capital-raising initiatives.

Chapel Hill Denham projects that free cash flow could come under pressure during the peak investment phase, potentially approaching break-even in 2027 and turning negative in 2028 as capital expenditure accelerates.

Stronger Balance Sheet Ahead of Listing

The refinery enters the public market with an improved balance sheet. Total borrowings declined to $5.67 billion as of 30 June 2026, compared with $6.24 billion at the end of 2025. Shareholders' equity rose to $10.63 billion during the period.

The prospectus also disclosed 14 ongoing legal cases as of 26 August 2026, including nine classified as material, with claims amounting to ₦4.08 billion and $216.12 million.

A commonly cited $400 million investment commitment from Pan-African Refinery Investment SPV, a Mauritius-based vehicle, forms part of the IPO proceeds rather than constituting additional capital outside the offer. The investor has committed to subscribe for approximately 1.039 billion shares, equivalent to 25.34 per cent of the shares being offered.

With refining margins, throughput levels and expansion execution likely to shape investor sentiment, attention will remain focused on the refinery's second-half performance as it prepares for its historic listing on the Nigerian Exchange.