Why investors are sticking to NAHCO shares

By Chukwuma Umeorah

Investors in Nigerian Aviation Handling Company (NAHCO) Plc are increasingly holding on to their shares amid a sustained rally in the company’s stock price. The shareholders argue that the combination of dividend growth and share price appreciation has strengthened the investment case for the company at a time when investors on the Nigerian Exchange (NGX) are increasingly seeking companies with stable earnings and regular cash returns.

At the company’s annual general meeting at the weekend, several shareholders pointed to a combination of capital appreciation and improving returns as reasons many investors have remained reluctant to sell their holdings despite significant gains recorded over the past year.

The company’s share price, which traded around N80 per share last year, has crossed the N200 mark, representing an increase of more than 150 per cent within the period, according to shareholders at the meeting.

The renewed investor interest has coincided with another year of earnings growth for the company, which reported increases across major financial indicators for the 2025 business year. Shareholders approved a gross cash dividend of N12.18 billion and a bonus issue of 278.44 million ordinary shares of 50 kobo each. The approved dividend translates to N6.25 per share, higher than the N5.94 paid for the 2024 financial year. The bonus issue of one ordinary share for every seven shares held also increased shareholders’ holdings by about 14.3 per cent.

For many investors, the attraction extends beyond the immediate dividend payout. Shareholders repeatedly referenced the company’s consistency in increasing distributions over the past five years and its ability to maintain earnings growth despite broader economic and operational pressures affecting several sectors of the economy.

President of the Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar, linked the sustained investor confidence to the company’s operating performance and long-term earnings outlook. “They have done very well. NAHCO is a delight to us as shareholders. Look at the results, look at the share price and look at our dividends; everything is so remarkable.

Last year, the price was N80 per share, today it is over N200, that’s an increase of more than 150 per cent. They keep growing the business, which gives us hope of higher dividends. We believe the dividend next year will be much higher,” Umar said.

Founding National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, said demand for the company’s shares has remained high partly because existing shareholders are unwilling to dispose of what they consider a profitable long-term investment. “NAHCO is growing and we are happy about that. We are excited to be part of this family. The board and management deserve commendations, but they must not rest on their oars,” Nwosu said.

He also noted that the steady increase in the company’s share price reflected broader investor demand for the stock. “The steady rally of the company’s share price was because shareholders want more of the NAHCO’s shares while existing shareholders hardly want to sell such a highly rewarding investment,” he said.

Another shareholder, Patrick Ajudia, said the combination of higher dividend payout and bonus shares distinguished the company’s returns from many listed firms. “There is no better joy for shareholders this year than what NAHCO is giving to their shareholders. An improved dividend of N6.25 plus bonus of one for seven for the 2025 financial year. And of course, a good future prospects to reward shareholders for their investments. I think NAHCO is a place for stakeholders,” Ajudia said.

The company’s audited results for the year ended December 31, 2025 showed that revenue rose by 21.8 per cent from N53.54 billion in 2024 to N65.21 billion in 2025. Gross profit increased from N33.08 billion to N38.61 billion, while operating profit rose by 25 per cent from N19.84 billion to N24.84 billion.

Profit before tax increased by 30 per cent to N24.256 billion compared with N18.702 billion in the previous year, while profit after tax rose by 39.91 per cent from N12.865 billion to N17.999 billion. Earnings per share also climbed from N6.60 to N9.24, representing a growth of about 40 per cent. The balance sheet similarly reflected expansion in the company’s operations and asset base. Total assets increased from N46.95 billion to N53.88 billion, while shareholders’ funds rose from N20.075 billion to N26.497 billion.

The performance comes amid a period of rising operating costs, inflationary pressure, foreign exchange volatility and weaker consumer spending across parts of the economy, conditions that have affected profitability in several industries. Within the aviation sector, operators have also had to contend with higher maintenance costs, currency-related pressures on imported equipment and broader uncertainty linked to global supply chains and fuel markets. Against that backdrop, investors appear to be focusing on companies with stronger cash generation, pricing flexibility and relatively stable operational demand.

NAHCO’s role within aviation logistics and ground handling has also placed it in a strategic position as passenger traffic and cargo activities gradually recover and expand across parts of the sector.

Company chairman, Dr Seinde Fadeni, said the group intends to continue positioning itself for emerging opportunities within the aviation industry. “Your company, NAHCO, is well positioned to take advantage of emerging opportunities as the macroeconomic outlook improves and the industry continues to gain speed,” Fadeni said.

He added that the company would continue investing in equipment and operational capacity as part of efforts to maintain its market position. According to him, the company has added more than 300 ground support equipment units as part of its re-fleeting programme. The company is also seeking to deepen investments in cargo operations and logistics, areas that management believes could support future growth as aviation-related trade activities expand.

Group Managing Director of NAHCO Plc, Olumuyiwa Olumekun, said the company plans to continue diversification and digitisation initiatives in 2026. “In 2026, NAHCO will accelerate diversification, complete its digitization projects, expand cargo facilities to capture growth in aviation logistics and continuously pursue the board’s commitment to buying new equipment. We aim to sustain double-digit growth, enhance shareholders’ return and lead in sustainable aviation practices,” Olumekun said.

He however acknowledged that global uncertainties remain a risk to aviation operations. According to him, geopolitical tensions including the United States-Israel-Iran conflict could pose broader risks to the global economy and aviation industry.

Despite those concerns, shareholder discussions at the meeting largely centred on the company’s ability to sustain earnings growth and maintain increasing returns to investors. The focus on dividend-paying companies has become more pronounced in the Nigerian equities market over the past two years as inflationary pressures continue to weaken purchasing power and push investors towards stocks with stronger income potential.

Companies that combine dividend growth with capital appreciation have increasingly attracted institutional and retail demand, particularly among long-term investors seeking protection against inflation and currency weakness.

Investors expectation appears to be that the company may continue benefiting from improving aviation activity, expansion in logistics operations and stronger operational scale. That expectation, combined with a history of uninterrupted dividend payment and recent earnings momentum, has contributed to the growing reluctance among shareholders to part with their holdings despite the sharp rise already recorded in the company’s share price.