Dangote Cement grows PAT by 5.37% to ₦119.24 billion in H1’19

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Despite its weak Revenue in H1’19 resulting from reduced sales of Cement and other products, Dangote Cement Plc, a leading player in the Nigerian Cement Industry grew its Profit After Tax (PAT) for the period by 5.37% to ₦119.24 billion in H1’19 as against ₦113.16 billion in H1’18.

On the downside, the group’s total Revenue eased by 3.05% from ₦482.44 billion in H1’18 to ₦467.73 billion in H1’19 owing to a 3.04% and 18.71% reduction in the Revenues from the sales of Cement (to ₦467.60bn) and Other product of the group (to ₦126 million).

The group also incurred an increase of 1.07% and 29.22% in Administrative, and Selling and Distribution expenses respectively in H1’19 compared to H1’18 period. The groups’ Administrative expenses increased to ₦24.98 billion in H1’19 as against ₦24.71 billion in H1’18, while Selling and Distribution expenses increased to ₦80.31 billion in H1’19 as against the ₦62.15 billion expended in H1’18.

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The increase in Administrative expenses could be attributed to the slight increases in
Management fee (up by 37.37% to ₦2.01 billion) and Other expenses (up by 11.20% to ₦9.01 billion); while the increase in Selling and Distribution expenses was driven by a 33.46% increase in Haulage expenses (to ₦55.79 billion) and a 141.09% increase in Advertisement and Promotion cost (to ₦3.09 billion).

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On the positive, the group Finance cost eased by 8.9% to ₦19.62 billion in H1’19 as against ₦21.53 billion in H1’18. This could be attributed to the increased funding of the group’s operation with loans from the parent company and cheaper instruments like Commercial paper as against high interest-bearing loan.

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Despite the group’s Profit Before Tax (PBT – ₦155.49 billion) trailing that of H1’18 by 16.20%, its Basic Earnings Per Share (EPS) ₦7.00k, usurp that of H1’18 by 5.37% due to a 49.92% reduction in Income tax to ₦36.25 billion in H1’19 as against ₦72.37 billion in H1’18.

 

GTI Research

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