Dangote Cement Market Value Declines N1.35trn
In the stock market, Dangote Cement Plc is now worth N3.757 trillion at a 52-week low price of N220.50 on 17.04 billion outstanding shares. Dangote Cement’s market valuation has seen a large fall in 2022 amidst an ‘unconfirmed’ plan that management wants to list the company on London Stock Exchange.
On the back of the declining value of the Nigerian naira, dual-listed Airtel Africa has seen a myriad of selloffs in the local bourse as investors spotted an upside in London Stock Exchange.
In the space of five months, Dangote Cement Plc has lost N1.354 trillion in the stock market. In May 2022 the cement company’s share hit N300 on the floor of the Nigerian Exchange, NGX, followings its successful share buyback tranches.
The cement producer has been on a borrowing spree in recent times. Dangote Cement Plc.’s high dollar exposure could impact the company’s performance, according to a rating note issued by Moody’s.
In its latest earnings release, Africa’s largest cement producer’s profit sinks by 23.41% year on year despite a higher cement price in the Nigerian market and other African countries.
Management said Dangote Cement Plc has nearly 51.6Mta capacity across Africa and sales revenue was up 15.17% year on year to about N1.18 trillion, according to its nine months of 2022 interim financial statement.
In a rating action, Moody’s said Dangote Cement’s high proportion of dollar debt in the capital structure exposes the company to currency convertibility risk.
It said while Dangote Cement continues to grow its dollar revenue through exports and repatriations of dollar cash flow from its other African operations, it is still reliant on the Central Bank of Nigeria for dollars, which remains restricted.
READ: Dangote Cement: Analysts See Strong Upside, Expect Earnings Growth
The rating note says the company’s liquidity profile is adequate but is exposed to ongoing refinancing risks because of the large portion of short-term debt equal to N326 billion, representing 60% of total debt as of 30 June 2022.
Dangote Cement Plc benefits from strong cash flow generation with cash balances of N194 billion as of 30 June 2022. Moody’s downgraded the Dangote Cement to B3 from B2 and placed the ratings on review for downgrade.
It said the rating action is a direct consequence of the downgrade of the Government of Nigeria and the lowering of Nigeria’s foreign currency country ceiling, both to B3. # Dangote Cement Market Value Declines N1.35trn
