Dangote Cement, Africa’s largest cement producer released its half year financial results Friday showing a revenue growth of 16.9 percent at N482.44 billion and a profit after tax growth of 3.2 per- cent at N113.2 billion, halt- ing equities market four consecutive day bearish run.
The announcement, which sparked demand for the stock moved its share price 2 percent or N4.70 higher on Friday to close at N234.70 as the all share index added 0.37 percent to close the week at 36,603.44 points.
Dangote cement’s earning per share currently stands at N6.60k with a PE ratio 34.8x
Joseph Oyeyani Makoju, group chief executive officer at Dangote Cement in his comments on the results said: “Our first half performance was very strong and driven by an excellent recovery in Nigeria, where our sales volumes increased by nearly 14 percent and revenues rose by more than 18 percent. Pan-African operations saw a slight fall in volumes but both revenues and EBITDA increased because of better pricing and currency conversion effects.
“In addition, we achieved the largest ever issuance of commercial paper by a Nigerian company when we is- sued N50 billion Series 1 & 2 notes at the end of June, with a discount rate that reflected the strength of our company and its excellent credit ratings.”
Makoju noted that, “Our strong performance has been overshadowed by the tragic and heartbreaking events in Ethiopia. I would like to pay tribute to my colleagues Deep Kamra, Beakal Alelign and Tsegaye Gidey and offer our sincere condolences to their families.”
Explaining the rationale behind the success recorded in revenues, Makoju said, “the increase was helped by our decision to increase our use of local coal in Nigeria and that also helped to improve our fuel security, maintain production uptime and it reduced our need for foreign currency.
“We source coal from our parent company, Dangote Industries and from another Nigerian supplier, and we are very happy with the way this has worked out for us
because it has enabled us to phase out the use of expensive low pour fuel oil in our kilns and also to reduce our use of imported coal.”
On the future growth plans for the Group, He said, “As it stands, I think we will focus on building new grind- ing plants along the coast of West Africa, and ensure we have clinker export facilities in Nigeria. We are looking at the possibility of two new lines in Nigeria, perhaps by the end of 2020 and its likely these will be in Edo state and Obajana, with a combined capacity of 6Mta.”
Makoju also revealed that the company has invested $3 billion to build manufacturing plants and import/grinding terminals across Africa.
The company’s operations, according to Makoju are in Cameroon (1.5Mta clinker grinding), Congo
(1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.7Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).
For the second quarter under review, Makoju also revealed that while total Nigeria sales volumes went up by 13.9 percent to 7.8Mt, Pan-African volumes reduced by 3.9 percent, mainly due to shutdown in Tanzania.
Frontpage November 20, 2019