Dangote Cement’s revenue rises by 25%, proposes N8.5 per share dividend

28 Feb 2017
Financial Nigeria


The company's revenue rose to N615.1 billion in 2016.

Aliko Dangote, President/Chief Executive, Dangote Group

Dangote Cement, Africa’s largest cement producer, reported today that its revenue rose by 25 percent in 2016 notwithstanding Nigeria’s economic challenges, which impacted consumer spending. The company said revenue rose to N615.1 billion compared to N491.13 billion reported in 2015.

“It was a challenging year for many African economies but we achieved sales and revenue growth of 25 percent and consolidated our position as Africa’s leading producer of cement,” said Onne van der Weijde, Dangote Cement’s Group Managing Director/CEO.

Dangote Cement said after-tax profit rose marginally by 2.9 per cent to N186.62 billion as against N181.32 billion in the previous year. The company’s revenue and profit exceeded analysts’ estimates, according to CardinalStone Partners, a Lagos-based investment advisory firm. Owing to rising prices of materials, fuel and power, Dangote Cement said its production costs rose 60 per cent to N323.82 billion from N201.81 billion in 2015.

Overall cement sales volumes rose 25 per cent to 23.6 million metric tonnes from 18.9 million Mt in 2015. Nigeria, the company’s largest market, accounted for 15.1 million Mt of total cement sales, generating N426.13 billion in revenue. Pan-African operations accounted for 8.5 million Mt, generating N195.03 billion in revenue.

“Our Pan-African operations continued to perform well and we sold nearly 8.6 Mt of cement outside of Nigeria, which is 54 per cent more than 2015,” Van der Weijde said. “Despite some local and temporary disruptions in Ethiopia and Tanzania, we strengthened our market share in every country. We will soon begin operations in Congo and Sierra Leone, widening our footprint to ten countries.”

During the period under review, Dangote Cement said it exported 400,000 tonnes of cement from Nigeria to neighbouring countries, transforming Africa’s largest economy to a net exporter of cement.

“This is a remarkable achievement, given that only five years ago, in 2011, Nigeria was one of the world’s largest importers, buying 5.1 million tonnes of foreign cement at huge expense to our balance of payments,” said Van der Weijde. “We will increase our exports substantially in 2017.”

Dangote Cement said per share earnings rose to N11.34 per share as against N10.86 per share in 2015. The company has recommended a divided of N8.5 per share, up 6.25 percent from the previous year. On Tuesday, the company’s stock remained flat at N168.99 per share.

“The new year has started well and we expect much higher profitability in Nigeria in 2017, even though we may not see the volume growth we achieved in 2016,” Van der Weijde said. “I am confident that we will deliver an even stronger performance in 2017 as we increase market share and extend our reach across Africa.”

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