Dangote Cement’s expansion projects in African countries are yielding good results as they have all contributed to the increase in profit the company recorded in the first quarter of 2015
| By Anayo Ezugwu | Jun 1, 2015 @ 01:00 GMT |
DANGOTE Cement, Nigeria’s largest cement producer, has announced a gross profit of N74.7 billion for the three months ended March 31, 2015. The result indicated an increase of 10.5 percent over N67.63 billion recorded in the same period in 2014. According to the cement giant’s unaudited results for first quarter of 2015, revenues rose by 10.8 percent to 114.7billion compared to N103.57 billion in the corresponding in 2014. The improvement in the first results was buoyed by maiden contributions from non-Nigerian factories.
Net profit was up from 44.1 percent to N68.6 billion in contrast to N47.62 billion in 2014, while earnings per share grew by 45.7 percent to 4.09 percent. Group cement sales volumes was up by 3.4 percent to 3.8 million tonnes driven by contributions from South Africa, Senegal, Cameroon and new lines in Nigeria. The margins from Nigeria increased by new pricing, improved gas supply and more use of coal. Dangote cement plants are now operational in Zambia and Ethiopia. The new plants are expected to impact positively on the financials of the cement giants.
Commenting on the first quarter results, Onne van der Weijde, chief executive officer, Dangote Cement, said the cement producer’s expansion projects in Africa have started contributing to its revenue growth. “Our African projects are now beginning to deliver revenue growth for the group and even at this early stage we are seeing good potential in all the countries into which we are expanding. Senegal has made an excellent start, Cameroun is poised for a strong entry into an exciting growth market and Sephaku Cement is clearly shaking up the South African market as the first new entrant in many years.
“Although sales fell in Nigeria, we improved both revenues and margins thanks to pricing actions in December following the collapse of the oil price and currency devaluation. We are making a significant investment to improve our logistical capabilities and I am pleased to report a much more favourable fuel supply in the first quarter of 2015. We have invested for growth in Africa and each new factory that opens will generate good returns for shareholders as we deliver on our promise to become Africa’s leading cement company,” he said.
Dangote Cement is Africa’s leading cement producer with three plants in Nigeria and recently opened factories in South Africa, Senegal and Cameroon. It is a fully integrated quarry-to-customer producer with production capacity of 29 million tonnes in Nigeria at the end of 2014.
The Obajana Cement plant in Kogi State, Nigeria, is the largest in Africa with 13.25 million tonnes capacity across four lines. The Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12 million tonnes. The Gboko plant in Benue state has 4 million tonnes capacity.
Dangote Cement’s plants in Senegal and Cameroun were inaugurated in January this year when they began production and the company’s premium 42.5 grade was launched into the markets in the two countries. The Ethiopian and Zambian plants have also begun production as the company inches close to its determination to clock 40 million metric tonnes per annum before the end of 2015.