Dangote Cement's revenue rises 17% to NGN808bn in 1H22

Dangote Cement's revenue rises 17% to NGN808bn in 1H22
02 August 2022

Dangote Cement reported group revenue of NGN808bn (US$1.942bn) in the 1H22, a rise of 17 per cent YoY. Group EBITDA rose by 6.3 per cent to NGN373.2bn and profit after tax fell 10.2 per cent to NGN172.1bn.

Group sales volumes totalled 14.2Mt, down seven per cent. Nigerian volumes fell 5.3 per cent to 9.3Mt in the 1H22. Net debt stood at NGN423bn with a net gearing of 54.5 per cent.

“Although significant increase in energy and AGO costs are impacting production, we are strengthening our efforts to ramp up the usage of alternative fuels. Our alternative fuel project aims to leverage waste management solutions, reduce CO2 emissions, and source material locally. So far this year, we co-processed 67,230t of waste representing a 25 per cent increase over 1H21,” said Michel Puchercos, CEO.

When looking at domestic sales alone, Dangote's Nigerian operations sold 8.9Mt, down 5.7 per cent YoY. The slightly lower volume, elevated by the high base of the 1H21, was due to significant inflation, rising interest rate and energy supply disruptions that impacted production. The energy disruptions were largely due to low gas generation in the country, leading to severe power outages, impacting various sectors of the economy. These challenges were amplified by the global supply chain disruption and increased global commodity prices. Collectively, this negatively impacted the company's ability to maximise production during the period.

Revenues for the Nigerian operations increased by 26.1 per cent to NGN623.0bn, supported by price increases to offset some of the inflation on cost lines. The rapidly-increasing prices of AGO resulted in a 54.5 per cent YoY increase in the selling and distribution cost. Despite all these challenges, Dangote achieved a strong EBITDA of NGN349.4bn, up 12.3 per cent at a margin of 56.1 per cent.

The Nigerian operations exported 414,000t of cement in the 1H22, up 21 per cent compared to same period last year.

Pan-African operations sold 4.9Mt of cement in the 1H22, down 11 per cent on the 5.5Mt sold in the 1H21. This is due to the continuous global supply chain disruption and increasing commodity prices. This was exacerbated, by a shutdown in the Congo plant for over two months owing to maintenance and repairs, coupled with extended power plant maintenance in Senegal. In Cameroon, Ghana and Sierra Leone freight costs remain substantially elevated and cause volatility in the landing cost of cement and clinker. The total pan-African volume represents 34.3 per cent of group volumes.

Pan-African revenues of NGN185.1bn were 6.8 per cent lower than 1H21, largely as a result of lower volume sold. The region’s revenue represented 22.9 per cent of total group revenue. Pan-Africa EBITDA was NGN31.7bn (before central costs and eliminations), down 32.8 per cent due to the inflationary pressure on costs, high freight charges and lower volume sold in the 1H22. During the period, there was a depreciation in the CFA and cede which resulted in the significant increased exchange losses to NGN40.7bn, which impacted group bottom line. 

In total, manufacturing costs increased by 16.8 per cent to NGN322.5bn from NGN276.1bn in the 1H21. Materials consumed increase slightly by 3.3 per cent to NGN97.0bn, despite the reduction in production volume owing to inflationary pressures. Fuel and power consumed increased by 31.3 per cent to NGN130.0bn due to increasing energy costs especially AGO and coal.

The increase in Nigeria’s manufacturing costs was mainly driven by increased plant maintenance cost, rising energy costs and increase in price of gas which is pegged to the US dollar. The naira depreciated from NGN411/US$1 at the end of the 1H21 to NGN421/US$1 at the end of the 1H22. 

Published under Cement News