Dangote Cement Plc operating profit jumped 62.75 percent in the first quarter, thanks to a sustained growth in Pan-African volumes as a huge infrastructure and housing gap continues to feed demand.
The largest producer of the building material in Nigeria also benefits from price adjustments to fend off imported inflation and rising input costs.
Operating profit moved to N255.30 billion in March 2024 from N156.86 billion as at March 2o23.
Revenue surged by 100.96 percent to N817.35 billion in March 2024 from N406.72 billion the previous period.
Dangote Cement’s aggressive expansion across the continent has yielded fruit as its subsidiaries are contributing to Group’s earnings, which further consolidates the company’s market share.
Revenue from Pan-African operations, which now make up 46.67 percent of Group sales, spiked by 201.63 percent to N381.27 billion as at March 2023.
The Pan-African operations saw earnings before interest, taxes, depreciation, amortisation & impairment (EBITDA) rise by 221.06 percent to N99.85 billion.
Despite cost incurred on expansion of operations, currency devaluation, and higher input, the cement maker posted a profit after tax of N112.67 billion as at March 2023.
It should be noted that the Dangote Cement and other sector players are reeling from a myriad of challenges such as a failure of national housing policies, weak real estate & land use laws, poor industrialisation, and the dollarisation of the real estate sector.
Another elephant in the room is the exposure to foreign exchange risk due to energy and machine imports.
Dangote Cement’s stock has rallied by 105% this year as the company’s market capitalisation approaches the N12 trillion mark.
