By Ololade Julianah
In its first quarter unaudited financial result ended March 2016 released by the Nigerian Stock Exchange (NSE) Dangote Cement has reported a profit after tax of N54.539 billion from N70.168 billion reported in the corresponding period of 2015, representing a drop of N15.623 billion or 22.27 per cent.
Revenue for the period rose by 22.47 per cent from N114.738 billion in 2015 to N140.521 billion, cost of sales rose from N39.998 billion to N62.204 billion, profit before tax went down to N52.779 billion from N68.620 billion, while earnings per share stood at N3.12 from N4.09 recorded in 2015.
Dangote Cement recorded total sales volume of 6.4 metric tons in the first quarter of 2016, indicating an increase of 69.6 per cent compared to the same period in 2015.
Reacting to the result, Chief Executive Officer of the Cement Company, Onne van der Weijde, said sales volume increased in all territories, Nigeria increasing by 45.4 per cent to 4.5 metric tons after price reduction, West Africa & Central Africa sales volumes went up by 448.9 per cent to 1.2 metric tons while South & East Africa rose by 49.2 per cent to 0.7 metric tons.
Breakdown of Dangote Cement first quarter results indicated that Group revenues increased by 22.5 per cent to N140.5 billion, with N107.2 billion from Nigeria, up 5.7 per cent on first quarter of 2015, when cement had sold at the previous higher price.
Weijde said: “As we forecast at the time of last September’s price cut, Group operating profit margins were reduced by the impact of the lower price in our main market. As a result, operating profits fell by 4.0 per cent to N56.1 billion.”
“At the time of last September’s price reduction we cautioned that our profit margin could be lower during 2016. However, in the first quarter of 2016 we have demonstrated that we have improved our absolute EBITDA and we are still achieving very good 51.5 per cent EBITDA margins at Group level despite the price cut in Nigeria and the general economic malaise that has affected a number of countries in which we operate.
“That we are gaining substantial market shares so soon after launching operations across Africa is a testament to our business model of competing with higher – quality products produced at lower costs. Our success in these markets is positioning us for even better performance in the coming years as economies begin to recover.
“We have recently begun work on new plants to meet future needs in Nigeria and Côte d’Ivoire and have signed a Memorandum of Understanding for the financing and construction of our next wave of plants in Nigeria and beyond to reinforce our position as a global cement company.”
Dangote Cement is Africa’s leading cement producer with nearly 44 metric tons capacity across three plants in Nigeria and recently opened factories in Cameroon, Ethiopia, Senegal, South Africa, Tanzania and Zambia.