Despite Headwinds, Dangote, BUA Cement, Lafarge to Pay Shareholders N609.5bn Dividend
Despite the tough operating environment, three cement manufacturing companies in Nigeria have proposed N609.5billion as dividend pay out to their shareholders for the financial year ended December 31, 2023.
This is 30.3 per cent increase when compared to N467.85 billion the three listed cement makers paid to shareholders in 2022 financial year.
The three cement manufacturing companies are: Dangote Cement Plc, BUA Cement Plc and Lafarge Africa Plc.
Analysis of the companies’ financial results showed that Dangote Cement Plc’s management proposed a dividend of N30.00 per share in 2023 from N20.00 per share.
This translates into N511.22 billion in 2023, an increase of 50 per cent from N340.8 billion in 2022 financial year.
The proposed N30.00 per share, dividend, according to the company was in line with the promise of Chairman, Dangote Cement, Aliko Dangote to enhanced return on Investments of shareholders.
For Lafarge Africa and BUA Cement, their management proposed a dividend of N1.9 and N2.00 per share respectively, representing N30.6 billion and N67.7 billion their shareholders will take home for the period under review.
Capital market analysts have commended the three cement producers for maintaining dividend pay out to shareholders amid macro economic headwinds.
Speaking, the Vice Chairman, Highcap Securities Limited, Mr. David Adnori expressed further that the sector last year witnessed severe foreign exchange losses, yet the management acted prudential in reducing cost and improving on bottom-line in their quest to reward shareholders.
He added that the dividend declared was below these companies Earning Per Share (EPS), “yet the dividend should be applauded by shareholders due to economy situation in the country.”
Commenting on Dangote Cement’s 2023 performance, analysts at Cordros Research said, “Dangote Cement sales performance in the Pan African region was remarkable and we like the business’ resilience in ensuring profitability in the face of slow sales in its Nigerian operations amid inflationary and currency pressures.
“For 2024, we envisage that Pan African sales will maintain its uptrend while higher cement prices will remain the key driver of turnover in Nigerian operations. Furthermore, we point to Dangote Cement’s costs controlling efforts, including fuel mix optimisation, shifting towards alternative fuels and gradual transition from diesel delivery trucks to full Compressed Natural Gas (CNG) trucks and believe these initiatives will help sustain margins in the near term.”
Commenting on the cement industry, CardinalStone in a report explained that, “As Nigeria’s cement industry reflects on a challenging 2023, characterised by demandstifling events like the cash crunch orchestrated by a poorly executed currency redesign policy, the material currency devaluation, and bouts of heavy rainfall, its hope for a gradual recovery in 2024 feeds off the return to relative macroeconomic normalcy and early gains from tough policy reforms.
“In 2024, the Nigerian cement industry is expected to benefit from renewed government focus on infrastructure development and construction projects, which could stimulate demand for cement products. With increased budget allocations to critical sectors and ambitious infrastructure initiatives (N1.32 trillion to infrastructure, which represents five per cent of the total FG 2024 budget), the construction industry is likely to experience a resurgence. Cement manufacturers, in response, are beginning to recalibrate their production strategies in the form of capacity expansion and improved efficiency to meet the anticipated rise in demand.