DangCem revenue rises 33.5%

Plans capacity ramp up capacity to 70,000tpd PAT up 48.1% to N89.7bn PBT up 47.7% to N130.1bn EBITDA margin expanded 53.5%

Dangote Cement has continued its smooth ride in its financial performance journey with the posting of healthy numbers driven by robust domestic market demand that enabled it to report a 33.5 per cent year on. ..

Dangote Cement has continued its smooth ride in its financial performance journey with the posting of healthy numbers driven by robust domestic market demand that enabled it to report a 33.5 per cent year on year growth in revenue from N249.2 billion to N332.6 billion during the first quarter of 2021.

The revenue growth was broad-based and was led by Nigeria (+33.6%) and PanAfrica (+33.1%). The company recorded a robust 18.8 per cent year on year group sales volume growth during the quarter, supported by a price rise of about 12.4 per cent year on year. The Nigerian business recorded volume growth of 22.2 per cent in the first quarter of 2021, while Pan Africa recorded a volume growth of 12.8 per cent. The strong volume growth was enhanced by the company’s successful national consumer promotion, “Bag of Goodies Season 2”.

In its recently released unaudited first-quarter financials for 2021, the company recorded strong performances in both top line and bottom line. Despite inflationary pressures and foreign exchange volatility, its disciplined cost control measures helped it maintain a relatively flat cash cost per tonne.

The cost control measures included improved plant efficiency, better fuel mix and general overhead optimisation. Its Nigerian operations sold 7.5Mt for Q1 2021 compared to 6.3Mt in the same period in 2020, an 18.7 per cent growth.

Nigeria’s strong performance was boosted by the ramp-up of a new and efficient 3Mt Obajana line 5 plant. Pan-African revenues grew 33.1 per cent year on year to N93 billion in the period under review.

Furthermore, the company’s finance income fell 30.9 per cent after a sharp rise in the last quarter, from N5.3 billion to N3.6 billion in the first three months of 2021, largely due to decreased FX gains. However, the finance cost spiked 180.7 per cent year on year as the company had to face increased interest expense and FX loss. With no share of profit from associate, profit before tax was reported at N130.1 billion, resulting in a healthy 47.7 per cent growth, year on year. With a marginally decreased effective tax rate (-0.2%), profit after tax was reported at N89.7 billion, a 48.1 per cent growth from N60.6 billion in Q1 2020.

The group earnings before interest, taxes, depreciation and amortization (EBITDA) margin expanded 766 basis points to 53.5 per cent in Q1 2021, primarily driven by an 823 basis points expansion in Nigeria and supported by 453 basis points year on year expansion in Pan-Africa EBITDA margin. The administrative costs for the company were up 22.8 per cent from N12.8 billion to N15.8 billion in Q1 2021. The manufacturer’s selling & distribution expenses declined marginally 0.7 per cent to N41.6 billion in Q1 2021. Conversely, there was a significant rise in the company’s other income (+248.7%), majorly due to higher sundry income, resulting in 65.3 per cent year on year growth in operating profit to N151.7 billion in Q1 2021.

Meanwhile, Africa’s biggest producer of the building material is planning to ramp up capacity by more than a third to meet Nigeria’s burgeoning demand as the economy recovers. It plans to expand capacity from about 50,000 tonnes a day at the beginning of the year to 70,000 tonnes a day at the end of the year.