Dangote Cement - March 2019

Despite heavy rains and uncertainties surrounding the Nigerian general election in February this year, Dangote Cement has reported a record financial performance for 2018, driven by a strong home market. Group revenue for the year came in 11.9 per cent up YoY at NGN901.2bn (US$2.49bn). Group EBITDA also increased, up by 12.1 per cent to NGN435.3bn, giving a 48.3 per cent margin. Nigerian EBITDA advanced by 10.2 per cent to NGN397.4bn, while pan-African EBITDA improved by 28.2 per cent to NGN49.1bn. 

In Nigeria, unusually-heavy rain and flooding depressed demand in key regions from mid-August to mid-November. Despite this, Dangote saw volumes in the country increase last year by 11.4 per cent YoY to 14.2Mt, including exports of 0.7Mt. The Obajana cement plant sold 6.7Mt, while the company’s Ibese works sold just under 6.7Mt. The 4Mta factory in Gboko sold more than 0.8Mt but was mothballed for most of the year.

The company’s pan-African operations sold 9.4Mt of cement last year, level with the previous year. This represented 39.8 per cent of group sales volumes. Despite the stable volumes, pan-African revenues advanced by 9.6 per cent YoY to NGN283.3bn on the back of higher pricing throughout the region.

By country, Dangote sold nearly 2.1Mt of cement in Ethiopia in 2018, followed by Senegal (1.4Mt), Cameroon (1.2Mt), Zambia (1Mt), Ghana (763,000t), Tanzania (625,000t), Congo (200,000t) and Sierra Leone (109,000t). In South Africa sales were down 6.4 per cent YoY.

According to the company, 2019 has started well with sales volumes in Nigeria already more than 10 per cent ahead of last year. The government’s commitment to a strong programme of infrastructure investment, especially roads, should help drive demand here. Elsewhere, Dangote expects to see higher volumes in Tanzania, Ethiopia, Congo and Sierra Leone this year. Gas turbines in Tanzania are forecast to boost profitability in the pan-African region, helping to improve group margins overall.