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Analysts predict stellar FY’13 results for Dangote cement


Analysts are predicting a stellar full year 2013 financial results for sub Sahara’s African largest cement manufacturer Dangote Cement Plc (DANGCEM) reports reaching BusinessDay reveal.

“We expect the group ( inclusive of revenues outside Nigeria) to gross its turnover to N389 billion ,” Abiola Rasaq lead analyst at UBA capital, a Lagos based financial and investment firm said in a March 20 2014  e-mailed statement .

“This translates to 31 percent YoY growth over 2012,” he said, adding that the company could grow its profit after tax by 37 percent to N208 billion.

The production and sales kick-off in SepCem (the South African Delmas plant, where Dangote Cement has 64 percent interest) presents further cashflow and earnings accretion to Dangote Cement Group, according to Rasaq.

“We estimate FY cost to sales at about 34.8 percent which will still keep the company as the most cost efficient player in the cement industry,” said Ronke Akinsola, a research analyst with Meristem Securities Limited, a Lagos based Investment firm in a March 20 2014 e-mail statement.

“We see the company sustaining this performance by 2013FY with estimated net margin of about 58 percent compared with its prior 3-year historical average of 51 percent, “said Akinsola.

The company in the nine months period through September 2013 grew revenue by 29 percent to N288.98 billion from N244.42 billion recorded in 2012.

Dangote Cement recorded a profit before tax (PBT) of N151.7 billion in Q3’13, an increase of 43 percent Year-on-Year (YoY), from N106.4 billion in Q3’12

Operational expenses grew by 57 percent y/y to N33.6 billion in Q3’13, while finance cost reduced by 5 percent to N9.1 billion in Q3’13.

After-tax income increased to N156.1 billion in 9M13 representing an increase of 29 percent compared to N107.1 billion recorded in 9M12.

Earnings per share EPS increased by 43 percent in the current period Q3’13 to 919k from 629k in Q3’2012.

Shares in the Dangote Cement Company closed at N228.5 as at March 21 2014 representing a capital gain of 54.8 percent in the past one year.

Plans are in the works to list the company on the London Stock Exchange. It also has a Price Earnings ratio (P/E ratio) of 25.61 xs as at March 20 2013.

The company has a market capitalisation of N3.8 trillion as at on the same day making it the biggest quoted company in Nigeria and the entire West Africa.

Analysts say Dangote Cement can further increase its share of the Nigerian cement market as its cement sales are increasing faster than nominal GDP growth rates.

“We expect the real estate and hospitality sectors of the Nigerian economy to sustain the strong double digit growth in 2014, with attendant rub-off on cement demand,” said Rasaq.