Dangote Cement's 1H17 revenues rise by 41%

Dangote Cement has released its 1H17 results, announcing group revenues of NGN412.7bn (US$1.31bn), up 41.2 per cent, and an EBITDA of NGN203.7bn, up 53.7 per cent.

In Nigeria total cement demand reached 10.2Mt in January-June 2017, according to Dangote estimates. This represents a 23.2 per cent contraction when compared with 1H16, when demand was estimated at 13.3Mt. Of total market sales in the 1H17, just 0.1Mt was imported.

As a result of the fall in domestic cement consumption, Dangote Cement sold 6.855Mt of cement, down 21.8 per cent on the 8.766Mt sold in the 1H16. The company estimates its market share at around 64.5 per cent in 1H17.

Pan-African operations increased cement sales by nearly 12.6 per cent to 4.748Mt during the first six months of 2017 as Dangote factories continued to consolidate their market shares across Africa. Pan-African operations sold 41.3 per cent of total group cement volumes, provided 29.9 per cent of group revenues (before inter-company eliminations) and 9.4 per cent of group EBITDA (before central costs and eliminations).

Cameroon
Dangote Cement's 1.5Mta clinker grinding facility in Douala sold approximately 627,000t of cement in the 1H17, an increase of 16.3 per cent on the 539,000t sold in the same period of 2016. The average price was about US$110/t in June.

Rep of Congo
Dangote Cement's1.5Mta integrated plant in Mfila will begin operations at the end of July 2017 and therefore, did not contribute to the first-half performance of the group. The 1.5Mta works is expected to make a significant impact on the country’s cement production base, which currently has a total capacity of 1.7Mta, according to the Nigeria-based cement producer.

Ethiopia
In Ethiopia the company estimates that total cement market sales were nearly 4.2Mt during the first six months of 2017. Dangote Cement Ethiopia increased sales by 12.6 per cent to 1.1Mt in the first six months of 2017 (1H16: 0.96Mt). As a result, the firm estimates its market share at 26 per cent in 1H17.

Ghana
Dangote Cement Ghana sold approximately 508,000t of cement in the first six months of 2017, up nearly eight per cent on the 471,000t cement sold during the same period in 2016.

Senegal
The company’s 1.5Mta plant in Pout sold 738,000t of cement in the first six months of 2017, up 26.5 per cent on the first six months of 2016. This represents almost 100 per cent capacity utilisation at the factory and brings the company’s market share to around 37 per cent, according to Dangote. Ex-factory pricing stood at US$72/t at the end of June 2017, higher than the US$67/t average in the 1Q17.

Sierra Leone
The group’s 0.7Mta import and bagging facility in Freetown, Sierra Leone, began operations in January 2017. The facility sold approximately 23,000t of cement in the first three months of 2017 and 30,000t in the second quarter, resulting in a total of 53,000t its first six months of operation.

South Africa
Price increases in February and the entry of a new competitor, Mamba Cement, in 2016, contributed to a 4.9 per cent fall in Dangote Cement's sales compared to the first six months of 2016. Industry figures supplied by Econometrix suggest that the total market volume was about 5.65Mt during the first half of 2017.

Tanzania
Dangote Cement's 3Mta factory at Mtwara is the largest cement plant in Tanzania and represents a significant share of the country’s 11Mta production capacity. The plant increased volumes by more than 64 per cent to nearly 388,000t in the 1H17, leading to a market share of 17 per cent at the end of the period. The ex-factory price during the period was around US$50/t in June.

Zambia
The company's 1.5Mta factory in Ndola sold some 331,000t of cement in 1H17, approximately seven per cent down on 1H16, in part because of a heavy and prolonged rainy season that affected construction activity. In addition, the retail market was constrained by tighter monetary policy and pressures on disposable income following the drought of 2015-06. Dangote Cement estimates its market share to have been about 41 per cent at the end of June. Cement prices were about US$85/t in June, slightly higher than in previous months.