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Wednesday, March 22, 2023

Dangote Cement Has the Strongest Cash Flow in Nigeria

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Dangote Cement Plc is sitting on a cash pile more than any other firm in Nigeria as the largest producer of the building materials and most capitalised entity has embarked on an expansion plan across the continent.

Of course, cash is the lifeblood of a business, and it is used to settle debts, pay dividends to shareholders, and fund capital expenditure plans.

Dangote Cement’s generated free cash flow of N286.66 billion as at June 2022, which validates consistent earnings growth.

Despite the uptick in crude oil price since the start of the year, Seplat Energy’s free cash flow stood at N34.76 billion, and it is worth noting that the company burned cash on capital expenditure since it had opened the taps.

The upstream oil and gas giant’s capital expenditure surged by 441.81 percent to N284.258 billion as at June 2022 from N52.47 billion the previous year.

MTN Nigeria, the largest telecoms operator, generated free cash flow of N184.19 billion, as Capital expenditure was accelerated to hedge against supply chain disruptions and foreign exchange risks.

Its investment in the country has yielded fruit as it has rolled out its 5G network, having won the 3.5GHz spectrum license for 5G network rollout since December last year, and coupled with the issuance of 5G spectrum license in May this year.

In the same vein, the Cement Plant on Monday announced, group revenue of N808 billion for the half year ended June 31, 2022, even as winners have started to emerge from the ongoing bag of goodies season 3 promo.

Dangote Cement’s revenue rose by 17 percent, compared to N690.55 billion recorded in 2021. It reported group sales volume of 14.2Mt, consisting of 9.3 Mt done by Nigerian operations while the balance was contributed by operations in other African countries.

Chief Executive Officer, Dangote Cement, Michel Puchercos, speaking on the result said: “Despite the elevated inflation due to a very volatile global environment, the first half of 2022 has been positive. We recorded increases in revenue and EBITDA that drove strong cash generation across the Group. We recorded revenue of ₦808.0 billion up 17 percent compared to last year and Group EBITDA of ₦373.2 billion, up 6.3 percent with an EBITDA margin of 46.2 percent.”

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