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Dangote Cement posts strong performance in Q1 as profit before tax up by 11%

Africa’s leading cement manufacturer, Dangote Cement plc, has posted a strong performance in the first quarter ended March 31, 2020, with profit before tax (PBT) up by 11 percent, increasing from N78.96 billion to N88.06 billion.

According to the cement company’s unaudited first quarter report, gross profit rose by 3 percent, from N140.68 billion to N144.86 billion. Group net profit stood at N60.60 billion.

Revenue was equally on the increase, growing from N240.16 billion to N249.18 billion, indicating an increase of 3.8 percent. Dangote Cement sold a total volume of 4.0Mt in Nigeria while pan-African sales accounted for 2.28MT.

Michel Puchercos, chief executive officer, Dangote Cement, commended the resiliency of the management and staff of the company in delivering good results despite the lockdown caused by the COVID-19 pandemic.

“From the beginning of the COVID-19 pandemic, we have proactively deployed all recommended measures to protect the health and well-being of our employees, customers, suppliers and communities. As such, we have implemented several rigorous protocols in all our operations across the continent,” Puchercos said.

“We are closely monitoring all markets according to the guidance provided by the authorities in each country. We continue to provide superior services and deliver high quality products to our customers. 2020 started strongly, with growth across the board despite the early effects of the COVID-19 pandemic. We achieved a record high quarterly EBITDA margin in pan-Africa and a record high quarter in Nigeria, with revenues of N179bn and domestic volumes at 4.0Mt,” he said.

Puchercos said Dangote Cement in April successfully raised N100bn series 1 Bond from the Nigerian Debt Capital Market despite the current challenging environment. This, he said, illustrates investors’ continuous confidence in Dangote Cement’s strategy.

“This landmark transaction is the largest ever bond issuance by a corporate issuer in Nigeria. It allows us to further broaden our sources of funding by accessing long-term debt at competitive costs from the capital market,” he said.

Dangote Cement recorded volume growth in six of its nine operations. A detailed breakdown of the results indicated that with pan-African sales volume at 2.28 MT, it contributed 36.2 percent of Group volumes.

There was strong volume growth in Ethiopia, Senegal, Cameroon, Ghana, Sierra Leone and Congo. Plans are concluded to further deploy clinker and cement export strategy across West and Central Africa.

Dangote Cement plc is sub-Saharan Africa’s largest cement producer with an installed capacity of 45.6Mta across 10 African countries and operates a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales and distribution of cement.

The Group has a production capacity of 29.3Mta in its home market, Nigeria. It has three cement plants in Nigeria – Obajana plant in Kogi State with 13.3Mta of capacity across four lines; Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta, and Gboko plant in Benue State has 4Mta. Through recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighbouring countries.

In addition, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), and Zambia (1.5Mta).

Dangote Cement has a long-term credit rating of AA+ by GCR and Aa2.ng by Moody’s due to its market leading position, significant operational scale and strong financial profile evidenced by the company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, satisfactory cashflow and low leverage.

Dangote Cement is a subsidiary of Dangote Industries Limited, a diversified and fully integrated conglomerate as well as a leading brand across Africa in businesses such as cement, sugar, salt, pasta, beverages, and real estate, with new multibillion-dollar projects underway in the oil and gas, petrochemical, fertiliser and agricultural sectors.

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