Dangote Cement Plc has announced improvements in performance measurement indices for the nine months financial results ended September 30, 2021.
This is as even the Group sales hit 22.2 million tonnes. Sales volume in Nigeria remained strong and accounted for 14.1 million tonnes despite heavy rains in the third quarter (Q3). Pan-African operations accounted for the balance of 8.2 million tonnes.
A look into the company’s results released on the Nigerian Exchange (NGX) Limited at the weekend, indicated that, the cement group posted revenues of N1.022 trillion, while profit before tax was N405.5 billion while profit after tax was N278.3 billion. The company recorded a tax charge of N127.24 billion for the period under review.
Reviewing the results for nine months further showed that Dangote Cement revenue grew by 34.24 per cent to N1.022 trillion compared to N761.444 billion in nine months, 2020. Cost of goods up by 27 .04 per cent from N317.540 billion to N403.388 billion in the period under review, while gross profit increased by 39.40 per cent to N618.798 billion higher than N443.904 billion.
Further analyses revealed that other income was N7.214 billion as against N3.438 billion, while operating expenses stood at N185.462 billion as against N159.414, a growth of 16.3 per cent.
Profit before tax went up by 49.1 per cent to N405.487 billion from N271.960 billion, while profit after tax was up by 33.3 per cent to N278.250 billion compared to N208.685 billion in 2020.
The company recorded a gross margin of 60.5 per cent as against 58.3 per cent as at full year 2020, net margin at 27.2 per cent from 27.4 per cent, cost to sales lower to 39.5 per cent from 41.7 per cent, while leverage ratio was at 61.1 per cent from 56.5 per cent as at December 30, 2020.
Total asset rose by 11.3 per cent to N2.250 trillion compared to N2.022 trillion as at December 30, 2020.
Analysts at Cordros Securities stated that they are impressed that the company has continued to leverage on its market leadership status in delivering superior revenue growth of 36.2 per cent year-on-year compared to its peers as of nine months, 2021.
“We expect demand for cement to remain healthy in the last quarter of the year, supported by increasing housing infrastructure by individual homebuilders even as government accelerates spending on capital projects given slightly improved public finances,” it said.
Speaking on the company’s performance, the group chief executive officer, Dangote Cement, Michel Puchercos said: “We are pleased to report a solid set of the results for the first nine months of the year. Group volumes for the nine months were up 15.4 per cent compared to the first nine months of 2020. Given the strong rebound in Q3 2020 following the impact of COVID-19 in the first half of the year, volumes in Q3 2021 were slightly lower than Q3 2020, as anticipated though worsened by heavier rains.”
“However, the overall growth trend continues, supported by our ability to meet the strong market demand across all our countries of operation. The economic performance and efficiency initiatives across the Group enabled the offsetting of inflationary pressures on some of our cost lines.
“Our Nigerian business recorded volume growth of 18.7 per cent in nine months 2021 at 14.1Mt and despite operating in a complex, challenging, and fast-moving environment, Dangote Cement is consistently delivering superior profitability and returns to the shareholders. Our alternative fuel project is at an advanced stage which aims to leverage waste management solutions, reducing CO2 emissions and sourcing material locally.”
Meanwhile, speaking at the company’s annual general meeting (AGM), the chairman, Aliko Dangote said: “The board is considering all strategic and financial options for the company. We strive to improve in all areas of our organisation and we will continue to improve our efforts in sustainability by applying ‘The Dangote Way’ to the seven sustainability pillars of our business culture and operations.
“You will recall that only a few years ago, Nigeria was one of the world’s largest importers of cement. Dangote Cement has transformed into an exporter of this basic but vital commodity.
“In 2021, we are focused on increasing capacity in the Nigerian market and building grinding plants across West and Central Africa to be fed clinker from Nigeria. We welcome The Africa Free Trade Agreement which supports our export strategy and long-term growth in Africa.
“Dangote Cement is well positioned to capture demand driven by the economic recovery in 2021, as the region recovers from the impact of the pandemic and all our countries of operation return to growth.”
Dangote Cement is Africa’s leading cement producer with nearly 48.6Mta capacity across Africa. A fully integrated quarry-to-customer producer, it has a production capacity of 32.25Mta in its home market, Nigeria.
Its Obajana plant in Kogi State, Nigeria, is the largest in Africa with 16.25Mta of capacity across five lines; its Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta while the Gboko plant in Benue State has 4Mta.
Through its added 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, it 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), Zambia (1.5Mta).