Dangote Cement Generates Over 90% of Operating Profit From Nigeria Market as Africa Lags

Dangote Cement Plc recorded a muted 2.0% year-on-year increase in net profit for the second quarter of 2026, as rising selling and distribution expenses erased gains from strong domestic sales volumes and expanding top-line revenue.

Profit after tax (PAT) for the three months through June 30, 2026, rose to ₦317.43 billion from ₦311.20 billion in the corresponding period of 2025. Revenue for the quarter rose 22.2% year-on-year to ₦1.315 trillion, supported by a 9.9% expansion in total cement sales volumes to 7.469 million metric tonnes.

Despite a 33.7% jump in gross profit to ₦840.34 billion—driven by disciplined production cost management—operating profit expansion was constrained by a 33.8% surge in logistics, freight, and distribution overheads (₦224.33 billion vs. ₦167.70 billion in Q2 2025).

Pan-African Margin Recovery Still Overshadowed by Nigerian Core

Performance in Dangote Cement’s Pan-African division showed operational improvement during the quarter, but the regional footprint continues to contribute a disproportionately small share of group profitability:

• Regional Revenue: Pan-African turnover rose 12.8% year-on-year to ₦405.39 billion in Q2 2026, up from ₦359.47 billion in Q2 2025.

• EBITDA & Profit Expansion: Operating profit from Pan-African plants more than doubled to ₦49.50 billion (up from ₦20.96 billion in Q2 2025), lifting the regional operating margin from 4.75% to 8.70%.

• Concentration Risk: Despite the margin recovery across West, Central, South and East Africa, domestic Nigerian operations continue to anchor the group, generating over 90% of total operating profit.

First-Half Trajectory and Outlook

For the full six-month period ending June 30, 2026, Dangote Cement’s cumulative net income benefited from a stronger first quarter (Q1 PAT: ₦321.1 billion), allowing H1 group net profit to reach ₦638.53 billion (+22.7% YoY) on total revenue of ₦2.514 trillion.

However, the standalone Q2 slowdown highlights ongoing margin drag from elevated haulage fuel prices, logistics distribution costs, and competitive pricing pressures in key non-Nigerian markets.

Management is relying on continuous investments in compressed natural gas (CNG) transport fleets and cross-border clinker export shipments to normalize regional freight expenses over the second half of 2026.

Get More of our proprietary news and analysis as MoneyCentral is now on WhatsApp Channels  Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!