Dangote Cement said the firm spent the sum of N56.7 billion on fuel and power costs in the first quarter of 2023, the highest in seven years.
According to findings by BusinessDay, the cement company’s fuel and power expenses consumed 34.6 percent of its total cost of sales which amounted to N163.7 billion in the first three months of 2023.
Further breakdown of the firm’s operating expenses showed the firm spent N56.7 billion on fuel and power, N48.2 billion on raw materials consumed, N23.7 billion on depreciation and amortization, and N13.6 billion on plant maintenance costs.
Dangote Cement also spent N11.9 billion on salaries and related staff costs, while other production expenses amounted to N11.3 billion. The firm also spent N760 million on royalty.
Dangote Cement’s production cost of sales inched up by 6.2 percent to N163.67 billion in the first three months of 2023 from N154.1 billion in the previous period.
The firm’s operating expenses (adjusted for depreciation) rose by 13.6 percent to N82.2 billion in the first quarter of 2023 from N71.06 billion in the same period of 2022.
Dangote Cement’s administrative expenses increased to N18.68 billion in the first three months of 2023, up 10.3 percent from N16.93 billion in the comparable period of 2022.
Selling and distribution expenses rose to N68.72 billion in the first three months of 2023, 13 percent increase from N60.69 billion in the similar period of 2022.
The cement company’s profit after tax grew marginally to N109.5 billion in the first three months of this year, 3.4 percent increase from N105.85 billion in the same period of 2022.
Dangote Cement’s revenue grew to N406.7 billion in the first three months of 2023, a 1.6 percent decline from N413.18 in the first three months of 2022.
“We attribute the decline in revenue to the drop in the company’s production levels, which was down by 10.6 percent in Q1 2023 as the company continues to battle with worsened supply chain challenges,” Mustapha Umaru, an analyst at CSL Research said in a note.
“We anticipate continued solid growth in revenue despite the high pricing environment, and we also project a boost in sales volume in the second half of 2023 as economic activities rebound from the impact of cash scarcity and election uncertainties,” analysts at ARM Research said.
The group sales volume declined by 13.5 percent to 6.3 million tonnes in the first three months of 2023 from 7.2 million tonnes in 2022.
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“The cash crunch coupled with the uncertainty around the general elections led to a slowdown in key private and public infrastructure investments. Consequently, our Nigerian operations recorded a drop in volume, resulting in a 13.5 percent decline in group volume,” Arvind Pathak, CEO of Dangote Cement said.
The firm’s finance cost dropped 11.6 percent to N36.8 billion in the first quarter of this year while finance income grew marginally by 1.1 percent to N10.47 billion.
Dangote Cement’s net finance cost dropped 16.5 percent to N22.05 billion in the first quarter of 2023 from N26.41 billion in the first quarter of 2022.
The firm’s other income increased to N1.48 billion in the first quarter of 2023, 45.2 percent increase from N1.02 billion in the first quarter of 2022.
Dangote Cement’s profit from operating activities amounted to N156.9 billion in the first quarter of 2023, 14 percent decline from N182.8 billion in the first quarter of 2022.
Net cash generated from operating activities amounted to N115.7 billion in the first quarter of 2023 from N213.1 billion in the first quarter of 2022.
Net cash used in investing activities amounted to N72 billion from N255.7 billion negative cash flow year on year.
Net cash used in financing activities stood at N57.2 billion positive cash flow in the first quarter of this year from N91.5 billion negative cash flow in the same period of 2022.
Dangote Cement’s cash and cash equivalents at the end of the period amounted to N248.5 billion from N126.8 billion which indicates 96 percent growth.
Earnings per share amounted to N6.44 per share in the first quarter of 2023 from N6.18 per share in the first quarter of 2022.
