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Despite an accelerating inflationary environment and seasonality in cement sales, Dangote Cement Plc posted impressive third quarter results even amid macroeconomic headwinds across the continent.
The cement maker whose consistent earnings growth has been driving the local equity market remains a money spinner and an investor who has not bought the stock is missing out on a slice of the cake.
Dangote Cement’s earnings before interest and taxation (EBIT) otherwise known as operating profit spiked by 33.76 percent to N750.40 billion as at September 2024 from N561 billion as at September 2023.
The largest producer of the building materials in Africa’s most populous nation saw revenue increase by 69.53 percent to N2.56 trillion, driven by price increases across Nigeria and Pan-African segments of the business.
A breakdown of the sales shows the Nigeria segment recorded a 63.95 percent to N1.53 trillion while the Pan-African regions saw sales increase by 85.29 percent to N1.09 trillion.
This positive nine-month result in the cement maker’s home country Nigeria regions is a combination of its strong value proposition, improved operational efficiency and a sustained drive to contain cost amidst an accelerating inflationary environment.
Interestingly, Dangote Cement Group’s earnings before interest, taxes, depreciation, amortisation & impairment (EBITDA) spiked by 37.10 percent to N908.69 billion as at September 2024 from N662.76 billion as at September 2023.
A breakdown of figures shows Dangote Nigeria’s EBITDA rose by 37.25 percent to N506.11 billion while the Pan-African operations or regions were up 45.35 percent to N170.01 billion.
Of course, Dangote Group felt the pang of foreign exchange volatility inflationary pressures brought on by the monetary policies of the central bank that ballooned borrowing costs while huge fuel and energy costs aggravated deteriorating margins as it incurred foreign exchange revaluation losses of N222.09 billion.
For instance, profit after tax (PAT) increased by a single digit 0.55 percent to N279.09 billion as at September 2024.
The company will continue to explore emerging opportunities and export strategies around the region to further consolidate the Group performance.
Historical Background
Dangote Cement is Africa’s leading cement producer with 52.0Mta capacity across Africa. A fully integrated quarry-to-customer producer, the company has a production capacity of 35.25Mta in its home market, Nigeria.
Obajana plant in Kogi state, Nigeria, is the largest in Africa with 16.25Mta of capacity across five lines; Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta; Gboko plant in Benue state has 4Mta; and Okpella plant in Edo state has 3Mta.
Through recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighboring countries.
In addition, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (2.0Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).
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