Dangote Cement Reclaims Position, Market Value Hits N6trn
Dangote Cement Plc has returned to the top of the chart as the most valued brand among companies listed on the Nigerian Exchange (NGX) after a successful share buyback programme. It was sold at N360 per share last week, and its market valuation was N6.134 trillion spread on 17.04 billion shares outstanding.
The cement company had fallen off the cliff when its share price spiralled downward. Dangote remains a leader among the cement oligarchy family in Nigeria. Its volume production increased by about 10% in the second quarter of the year despite uncertainties in the local economy.
However, the company’s pan-African advantage seems to protect demand levels even though FX losses sustained due to the devaluation of the naira dent its earnings – not so much such to alter equities analysts buying ratings. Instead, there appears to be an improved earnings expectation for the year as FX reforms dust settle.
Now falling angel, Airtel Africa had quickly assumed the stock market leadership and rose significantly above N7 trillion after the telecommunication company bought out Nigerian minority shareholders.
This, coincidentally was when MTN Group sold down shares to Nigerians to increase local participation. On Friday’s close, MTN Nigeria was the second largest company by market value on the local bourse. The telco’s share had plunged after its unimpressive earnings released in the first half of the year.
Controlling about 39% of market share, MTN Nigeria lost big to the recent devaluation of the naira by the monetary authority. Then, earnings per share declined but analysts are hopeful the company’s profit would rebound.
In their 2023 estimate, equities analysts at CardinalStone Securities maintain volume sales expectations for DANGCEM. Analysts expect projected improvement in Pan-African markets to offset the impact of output decline in Nigeria.
The investment firm said it slightly adjusted the cement price estimate to N71,377/tonne from N66,930/tonne, previously on the expected impact of positive FX translation from Pan-African operations.
Analysts said while operating and finance costs will likely remain elevated in the short term, they expect a lower tax charge due to deferred tax credits and pioneer incentives, which should provide some margin support.
On average, the cement company is forecast to post earnings per share of ₦20.60 for next year compared to ₦22.27 last year. Dangote Cement reported a double-digit increase in revenue by 17.7% year on year to N950.8 billion in the first half (H1) of 2023 from N808 billion in H1 2022, its unaudited financial statement showed.
On a quarterly basis, analysts said the company’s performance was impressive, as revenue was up 33.8% to N544.1 billion in the second quarter of the year from N406.7 billion in Q1 2023 following an increase in production levels. Dangote cement volume production surged by 9% in the second quarter of 2023 from what was reported in Q1 2023. #Dangote Cement Reclaims Position, Market Value Hits N6trn
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