Dangote Cement - July 2019
In the opening six months of 2019, Dangote sold 12.28Mt of cement, down 0.6 per cent YoY. Over the same period, group revenue came in at NGN467.7bn (US$1.29bn), a fall of three per cent YoY, while group EBITDA declined by 11.4 per cent to NGN217.9bn. The EBITDA margin slipped 4.4 points to 46.6 per cent while net debt stood at NGN318.6bn after a dividend payment of NGN272.6bn.
Nigeria
Despite a strong increase in volumes in January, Nigerain cement sales in the first half of 2019 were affected by the delayed national and local elections, slowing growth across the market in February and March. This was followed by torrential rains in June. Overall, Dangote’s Nigerian operations sold nearly 7.6Mt of cement in the 1H19, compared to 7.8Mt in the same period a year earlier. This represents 61.8 per cent of total group volumes before inter-company adjustments. Revenue from the Nigerian business came in at NGN328.3bn, down 4.3 per cent YoY, with EBITDA 11.6 per cent lower at NGN200.6bn. Margins fell from 65.9 per cent in the 1H18 to 61.1 per cent this year due to lower volumes, price discounting, higher input and distribution costs, and higher fuel and power costs.
Pan Africa
Dangote’s Pan-African operations sold nearly 4.7Mt of cement in the first six months of this year, up 2.7 per cent on the 46Mt sold in the same period a year earlier. This represents 38.2 per cent of group sales volumes before inter-company adjustments. Pan-African revenues of NGN140.1bn where one per cent higher than in the 1H18 and represented 29.9 per cent of total group revenue, while the region’s EBITDA contribution of NGN23.9bn accounted for 10.7 per cent of group EBITDA.
The fall in profitability was mainly attributed to depressed economic conditions as well as operational and economic challenges in a number of key territories. Over the six-month period, sales volumes by Dangote increased in Tanzania, which is now running on gas turbines and in Senegal, where sales volumes are more than 100 per cent of the company’s rated capacity as well as in Congo, Sierra Leone and Zambia but contracted in South Africa, Ghana, Ethiopia and Cameroon.
