Dangote Cement, the largest cement producer in Africa, has reported its highest-ever quarterly revenue for the year ending in March, driven by a significant increase in the price of cement.
The retail price of cement in Nigeria nearly doubled year-on-year, reaching between N10,000 and N12,000 per bag in February compared to N5,000 to N6,000 in January.
According to its latest earnings report, this price surge contributed to Dangote Cement’s quarterly revenue reaching N817.4 billion.
The company’s revenue received a boost from a 26.1% expansion in output in Nigeria, its primary market. Additionally, Dangote Cement exported seven ships of clinker to neighbouring Cameroon and Ghana during the period, further bolstering its revenue from exports.
Despite facing challenges such as increased production costs and a weaker naira, CEO Arvind Pathak expressed satisfaction with the company’s performance.
Pathak highlighted the company’s intensified focus on exports, which significantly increased Nigerian exports by 87.2%.
However, the company’s operating profit was impacted by rising selling and distribution expenses, which increased by 111.4% to N145.3 billion, primarily due to higher spending on haulage.
This occurred against the backdrop of soaring inflation, reaching its highest level in 28 years in March, which may prompt the Central Bank of Nigeria to consider a third rate hike this year.
Despite the challenges, Dangote Cement’s profit before tax rose by 13.3% to N166.4 billion, with profit after tax showing a slight improvement of 2.9%, reaching N112.7 billion.
However, cost pressures led to a decline in the net profit margin, dropping to 13.8% from almost 27% in the same period last year.
Dangote Cement also benefitted from extraordinary income generated from translating net gains from pan-African investments into naira, amounting to N410.4 billion.
Consequently, the total comprehensive income for the period surged to N523 billion, more than five times higher than the figure reported in the first quarter of 2023.
Newsng had earlier reported that for the 13th consecutive year, Nigerian business magnate and owner of Dangote Cement, Aliko Dangote has secured the top spot as Africa’s richest person, according to Forbes magazine.
Despite Nigeria’s economic challenges, including currency devaluation and rising prices following recent policy changes, Dangote’s net worth increased by $400 million in the past year, reaching $13.9 billion.
Dangote, aged 66, has amassed his wealth primarily through ventures in cement and sugar. Notably, he opened an oil refinery in Lagos last year.
