Dangote Cement
reported today that its gross revenue for the nine months period ended on
September 30, 2016 rose by 21 per cent to N442.09 billion.
The company’s top
line growth was driven by record sales in Nigeria and increased production in
other countries.
However, the
company said after-tax profit fell by 15 per cent to N133.52 billion compared
to N157.99 billion posted in a similar period of last year due to the impact of
lower cement prices in Nigeria and higher import costs caused by the devaluation
of the naira.
“This is a
strong performance despite economic downturns in several of our operating
countries, as well as the impact of heavy seasonal rains in West Africa,” said
Onne van der Weijde, Dangote Cement’s GMD/CEO. “Nigeria has achieved record
volume growth and our non-Nigerian operations are performing well across
Africa.”
Last year,
Dangote Cement slashed its cement prices by N300 as it sought to boost sales in
order to mitigate the impact of Nigeria’s economic challenges. But the company later
increased cement prices by N600 in August this year as it began using costlier
low pour fuel oil (LPFO) and coal owing to declining gas supplies from the
Niger Delta. Consequently, Dangote Cement said its gross margins fell to 40.4
per cent from 58.3 per cent in 2015.
“Our switch to
coal in Nigeria will have an immediate impact on margins now that we have
abandoned the use of LPFO, improving fuel security and reducing the need for
foreign currency. Furthermore, our new pricing will offset the impact on costs
of the devalued Naira,” Van der Weijde said.
Dangote Cement
said its total sales volume rose by 41 per cent to about 18.4 million tonnes
(Mt). In Nigeria, the company’s largest market, sales volume rose by 29 per
cent to 12 Mt compared with 9.3 Mt a year earlier. In the rest of Africa –
where the company has operations in nine other countries – sales volume rose by
72 per cent to over 6.4 Mt due to improved sales in Ghana and increased
production in Tanzania, Ethiopia, and Zambia.
“As other cement
producers experience challenges across Africa, it is clear that we are gaining
a significant competitive edge because of decisions made several years ago to
diversify revenues across Africa and to diversify fuel sources in Nigeria,”
said Van der Weijde. “We remain focused upon our goal to be Africa’s leading
producer and a global force in cement.”
For the period
under review, basic earnings per share fell by 17 per cent to N8.13 from N9.8
declared a year earlier. The company’s stock closed at N175 per share on
Thursday, up 0.48 per cent from the previous day’s close.
financialnigeria
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