Dangote Cement posts N390.3 billion full year profit, Despite rise in Cost of sales

Dangote Cement PLC Generated N761.44bn Revenue as PAT Surge by 35.20%
Cement trucks, operated by Dangote Cement Plc, deliver supplies to the construction site for the Eko Atlantic city project, developed by Eko Atlantic, near Victoria island in Lagos, Nigeria, on Friday, Feb. 12, 2016. Eko Atlantic city is an area of land reclaimed from the Atlantic ocean being developed into 10 million square meters of real estate. Photographer: George Osodi/Bloomberg

Dangote Cement Plc., Nigeria’s biggest cement producer with Pan-African operations in ten countries (South Africa, Senegal, Zambia, Ethiopia, Tanzania, Congo, Cameroon, Ghana, Sierra Leone & Cote d’Ivoire) released its FY 2018 results for the period ended December 31st, 2018 to the market on February 27th, 2019.

The Firm saw an 11.87% increase in its revenue from ₦805.58bn in FY 2017 to ₦901.21 bn in FY 2018. This was majorly driven by a 7.39% growth in cement sales volume from 21.92 million tonnes to 23.54 million tonnes within the corresponding period. A 7.42% growth in Cement production volume (amounting to 22.80 million tonnes in FY 2018) accounted for 96.87% of the cement sales volume. Sales in Nigeria accounted for 68.61% of its revenue with the rest gotten from the Pan-African countries.

Despite the rise in Cost of sales (9.12%), Selling & Distribution expenses (24.57%) and General & Administrative expenses (15.69%) Profit after tax (PAT) surged by 91.10% ( ₦390.34 bn in FY 2018 compared to ₦204.25 bn in FY 2017). The major reason for the surge in profit was the 204.25% decline in tax which occurred due to the reversal of tax paid in previous years as the firm’s approval for tax exemptions under the Pioneer Status Initiative was given in December 2018.

The firms Return on asset (ROA) and Return on Equity (ROE) both improved to 19.99% and 39.56% from 18.26% and 26.14% the previous corresponding period respectively.

Earnings per Share (EPS) almost doubled, rising by 95.97% to print at ₦22.83 in the year under review as against ₦11.65 the previous year. A dividend of ₦16.00 for FY 2018 has been declared to be paid on June 18th, 2019. Qualification date is June 3rd, 2019.