BY FESTUS OKOROMADU
The management of Dangote Cement Plc has attributed its aggregate revenue growth of 52.7 percent in the third quarter ended September 30, 2023 to robust demand of products in other African countries such as Senegal, Congo and Ethiopia as volume sales in the Nigeria market declined during the period.
The unaudited financial statement of the group released last week put the three months revenue for the third quarter at N563.77 billion up from N369.22 billion in similar period of 2022 even as the nine months revenue at N1.514 trillion translating to 28.7 percent growth when compared with N1.177 trillion in 2022.
The performance was driven by broad-based expansion across the Nigerian and Pan African operations.
However, for Nigerian operations, the revenue growth was driven mainly by higher price per tonne which rose by 25.1 percent y/y amid a decline in volumes of 5.6 percent y/y to 3.91MMT.
Management disclosed that the decline in sales volumes was due to increased rainfall which slowed down demand from construction activities during the period amid the devaluation of the country’s currency.
On Pan-African operations, sales growth in Q3-23 remained sturdy as volumes grew by 20.0 percent y/y (9M-23:15.2 percent y/y) accounting for 41.9 percent of the group’s volume in the nine months.
Management highlighted that Pan-African operations growth was driven by healthy volume growth amid robust demand, particularly in Senegal, Congo and Ethiopia.
Management also revealed that the group is now producing at full capacity in Senegal and Ethiopia, while Cameroon is close to full capacity.
Overall, the substantial Pan-African volumes boosted the group’s sales volume in Q3-23 by 4.2 percent y/y to 6.87MMT as group volumes for 9M-23 which declined by 2.4 percent y/y to 20.29MMT were neutered by the volume compression in Nigerian operation down by 10.9 percent y/y in 9M-23.
Group EBITDA for Q3-23 rose 0.3 percentage points to 38.9 percent and EBIT Q3-23 up by 0.8ppts to 32.1 percent margins increased slightly as the faster growth in cost of sales ex-depreciation grew 62.0 percent y/y to N228.03 billion and operating expenses ex-depreciation rose by 39.1 percent y/y to N121.45 billion muted the trickle-down effect of sales growth of 52.7 percent y/y recorded in the review period.
Net finance cost declined by 49.2 percent y/y to N22.59 billion in Q3-23, as the higher finance income soared 179.1 percent y/y to N19.07 billion in Q3-23 recorded in the quarter from forex gains of N14.61 billion moderated the surge in finance cost up by 112.6 percent y/y to N41.66 billion.
Profit before tax grew by 132.4 percent y/y to N165.03 billion in Q3-23 aided by a N6.64 billion gain on net monetary positions from Ethiopia’s hyperinflationary environment.
Consequently, PAT settled at N98.95 billion as against N41.00 billion reported in Q3-22 after accounting for a higher tax charge of N66.08 billion which was N30.01 billion in Q3-22.
