Dangote Cement Plc, has ended its financial year 2022 with a strong performance, showing improvement and maintaining its leadership position in the industry.
Investors who patronise the stock market in order to get regular dividend payment annually have Dangote Cement Plc among stocks in their baskets. The cement firm, which is among the highest capitalised on the Nigerian Exchange (NGX) Limited has remained consistent in payment of dividend and share price appreciation. This has endeared the stock to many investors.
The Africa’s leading cement manufacturer, posted a strong performance in its audited results for the year ended December 31, 2022. Revenue for the period rose by 16.96 per cent from N1.383 trillion in 2021 to N1.618 trillion in 2022, a breakdown of which showed that domestic sales in Nigeria amounted to N1.172 trillion from N956.96 billion.
Production cost of sales increased by 20.3 per cent from N551.019 billion to N662.89 billion, while gross profit rose to N955.433 billion, up by14.75 per cent from N832.618 billion in 2021.
Administrative expenses rose from N64.349 billion to N79.879 billion. Other income dropped to N5.333 billion from N6.221 billion, while finance income jumped to N38.715 billion from N20.765 billion, representing a growth of 86.44 per cent.
Finance costs grew by 98.41 per cent from N65.707 billion in the corresponding period of 2021 to N130.37 billion. The group recorded profit before tax of N52.002 billion and profit after tax stood of N382.311 billion, while earnings per share stood at N22.27, up from N21.24.
The Company’s directors pursue a dividend policy that reflects the Company’s earnings and cash flow, while maintaining appropriate levels of dividend cover. They consider the capital needed to fund the Company’s operations and expansion plans. For the 2022 financial year, the Group proposed a final dividend of N20.00 per share, subject to the appropriate withholding tax and approval will be paid to shareholders whose names appear in the register of members as at the close of business on March 30, 2023.
Also, in management’s efforts to combat the menace of ever-rising energy costs, the company intensified its efforts to ramp up the usage of alternative fuel feed systems at Obajana and Ibese which saw thermal substitution rate reach 7.5 per cent in December 2022.
Analysts from Cordros Securities Limited stated that “we are impressed with Dangote Cement’s resilience in ensuring profitability amid the challenges that constrained operations across its Nigerian and Pan African operations.
“For 2023 full year, we believe higher cement prices will continue to sustain Dangote Cement’s topline growth. However, we see a further slump in volumes, as the constraints hampering production levels still linger, and our expectations that electioneering activities will weigh on demand, particularly in H1, 2023. Our estimates are under review.”
Also, Coronation Asset Management Limited, said “we remain encouraged that the Group was able to take advantage of higher prices to offset weak volumes across its Nigerian and Pan-African markets. While fourth quarter (Q4) is historically a good quarter across the industry as seen in the group’s quarter -on-quarter (q/q) volume growth, we attribute some of its Q4, 2022 performance to the success of the third season of its National Consumer Promotion ‘Bag of Goodies 3’. In the medium term, we expect high prices to continue to drive topline growth while output lingers until ongoing plant maintenance exercises are completed.”
It stated that “elsewhere, we also express our concern about the extended outage in the Group’s Congolese and Senegalese plants as repair and maintenance activities continue. In addition, the rising operating expense profile driven largely by energy and material costs remains a source of concern. While management continues to ramp up the usage of alternative fuels sources in light of gas supply disruptions, energy costs are likely to remain elevated, at least in the medium term.”
Dangote Cement recently said it is constantly exploring ways of creating value for shareholders, saying “in addition to our consistent dividend, we have also been pursuing several options such as the share buyback programme to return cash to our shareholders. Our strategy is to make the company more attractive to investors in the near-term and for future long-term growth.”
Dangote Cement stated that “it is committed to complying with all applicable legislation, regulations and codes of practice. We integrate sustainability considerations into all our business decisions and ensure that our stakeholders are aware of our sustainability policy.”
Also, the chairman of the Company, Aliko Dangote at the 2021 annual general meeting said “Over the last decade, Dangote Cement has recorded exponential growth across all areas. Group volumes are now at almost 30Mta, our capacity has tripled to 51.6Mta and we export cement from five countries across Africa.
“As the volatile global environment propels us into a new era of uncertainties, we are fortunate that the last two years have taught us resilience, adaptability and grit. These values are what we need to face unpredictable times in the future.
“Dangote Cement remains the leading cement company in Africa, well-positioned for a positive and sustainable future. We are resolute in transforming Africa, while creating sustainable value for our stakeholders. I am confident that we are well equipped for our next growth journey.”
Dangote Cement has production capacity of 51.6 million tonnes per year across 10 countries in Sub-Saharan Africa. It has integrated factories in seven countries, a clinker grinding plant in Cameroon, and import and distribution facilities for bulk cement in Ghana and Sierra Leone. Together, these operations make the Group the largest and leading cement producer in Sub-Saharan Africa.
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