Dangote Cement Grows Profit by 0.6% in 9-Month
Dangote Cement Plc grew profit by 0.6% year on year to N279.10 billion in nine months, details from the company’s unaudited financial statement revealed.
The group’s revenue surged by 69.1% year on year to N2.560 trillion from N1.514 trillion in the comparable period in 2023 on the back of price adjustments.
Details from the financials showed that cost pressures remained a significant challenge. Dangote cement cost of goods sold surged by 92.3% year on year to N1.236 trillion from about N643 billion 12 months ago.
This resulted in 59% year on year increase in gross profit, up from N971.85 billion to N1.324 trillion. However, gross profit margin dipped to 51.7% from 57.6% as costs accelerated faster than revenue growth.
In the period, operating expenses of the cement company also increased by 86.6% to N610.314 billion from N327.061 billion in the equivalent period in 2023.
Analysts said the surge was mainly driven by elevated energy costs and haulage expenses due to rising energy prices.
To stem the tide on distribution costs, the company said it has made progress made in its migration to cost-saving alternatives, with 11 of 17 alternative fuel projects commissioned and the arrival of 1,500 CNG trucks announced.
The results also showed that the cement company’s net finance costs increased by 149.1% year on year, primarily due to higher interest charges.
Analysts said higher borrowing costs reflect an elevated interest rate environment, with the benchmark interest rate up 850 bps in the review period.
Dangote Cement FX losses due to naira fluctuation climbed by 124.3% year on year to N222.070 billion from N99.016 billion 12 months earlier.
12 months after, Dangote Cement N406.386 billion pretax profit was 0.4% higher than 2023. The company also reported a 5.9x increase in monetary asset gains, in compliance with provisions in IAS 29, Financial Reporting in Hyperinflationary Economies.
However, the PBT margin contracted by 10.9 percentage points to 15.9%. Tax expense growth remained relatively flat. This led to a net profit margin decline of 7.4 percentage points to 10.9%. #Dangote Cement Grows Profit by 0.6% in 9-Month
