Dangote Cement’s volumes fell 14% in 23Q16

Dangote Cement reported a 1.6% year-on-year decline in group revenue to NGN 406.7 billion (US$883.2 million) in the first quarter of 2023. Group EBITDA fell by 12% to NGN 185.7 billion over the same period, while pan-Africa EBITDA reached a record NGN 31.2 billion, up 71 percent year-on-year. Group profit after tax rose 3.4 percent year-on-year to NGN 109.5 billion, with earnings per share improving 4.2 percent to NGN 6.44. Group sales fell 13.5 percent to 6.3 million tonnes, while pan-African volumes rose 8.9 percent to 2.6 million tonnes.

“Strong operational delivery, strong cost focus and capital discipline enabled us to deliver strong earnings for the first quarter despite a volatile macroeconomic environment. Our profit after tax increased by 3.4% to NGN 109.5 billion. Similarly, our Africa strategy continues to deliver the required gains, with pan-Africa delivering strong revenue and EBITDA growth of 38.5 percent and 71 percent respectively. Nigeria’s cash crunch, coupled with uncertainty surrounding general elections, has led to a slowdown in major private and public infrastructure investment. therefore, our Nigerian operations recorded a decline in volumes, resulting in a 13.5 percent decline in group volume,” commented Dangote Chief Executive Officer Arvind Pathak.

Dangote’s Nigerian operations sold 3.6 million tonnes of cement in the first quarter of 2023, down 24.6% from the 4.8 million tonnes sold in 1Q22. Revenues from Nigerian operations fell 12.9 percent to NGN280.3 billion due to uncertainty surrounding the Nigerian elections and the shutdown of economic activity. Rising motor gas oil prices led to a 7.9 percent year-over-year increase in selling and distribution expenses. As a result, EBITDA in its Nigerian operations declined by 19.3 percent to NGN 158.6 billion, a margin of 56.6 percent excluding central costs and write-offs. The company is strengthening its local manufacturing capacity with the construction of an additional 6Mta cement plant in Itori, Ogun State. Upon completion, Dangote’s domestic capacity in Nigeria will increase to 41.25Mta.

Its pan-African operations performed well in the first quarter thanks to strong demand, particularly from Senegal, the Republic of Congo and Zambia, with Senegal now returning to full capacity. This was helped by the resumption of Congo operations in the first quarter of 2022 after months of downtime due to maintenance. Sales volume for the pan-African operation rose to 2.6 million tonnes in Q1 from 2.4 million tonnes in the same quarter last year. The total pan-African volume accounts for 41.9 percent of the group’s volumes. Pan-African revenues of NGN 126.4 billion were 38.5 percent higher than Q1, with revenues from the region accounting for 31.1 percent of total group revenue.

Published in Cement News

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