BREAKING NEWS, Business
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Dangote Cement Company has regained its profit margin as it records sales revenue of N491.1 billion by December 31, 2015, and giving a dividend of N8 per share to its shareholders
| By Anayo Ezugwu | Mar 14, 2016 @ 01:00 GMT |
DANGOTE Cement Company is likely to raise profit to a new high at the end of the first quarter of 2016. Profit may grow by over 40 percent if the current growth rate is maintained. The company closed third quarter operations on December 31, 2015, with a sales revenue of N491.7 billion, which is an increase of 26 percent from N391.6 billion in 2014.
According to the report released on Tuesday, March 1, profit-before-tax was N188.3 billion as against N184.7 billion in previous year, while profit-after-tax rose from N159.5 billion to N181.3 billion. Based on the performance, the directors recommended a dividend of N8 per share, showing an increase of 33 per cent above the N6.00 per share.
Dangote Cement is seeking to boost sales and protect market share in Nigeria amid slowing economic growth, while rapidly expanding elsewhere in sub-Saharan Africa. The company cut prices in Nigeria in September to boost consumption and compete with imports and said last month it will build two new plants in the country.
Onne van der Weijde, chief executive officer of the company, said: “New factories performed very successfully across Africa, gaining significant market share against long-established incumbents. In our home market of Nigeria we increased sales by 3.2 percent against the worst economic crisis the country has faced in many years, which demonstrates that the Nigerian market is very robust.”
Dangote last year announced plans to add 25 million metric tons of capacity across African countries including Ethiopia, Kenya and Zambia, as well as a new plant in Nepal. The company has last month announced new nine million metric tonnes per annum plants being constructed in Okpella and Itori in Edo and Ogun states in Nigeria.
When Dangote paid N6 last year, shareholders hailed the performance, saying it was highly encouraging given the challenging environment. For instance, Farouk Umar, president, Association for the Advancement of Rights of Nigerian Shareholders, commended the board and management of the company for the steps they had taken to ensure the sustained growth of the company.
Aliko Dangote, chairman, Dangote Group, had told the shareholders that 2014 was a year in which the company achieved significant progress in its goal to become a truly pan-African manufacturer and distributor of cement.
He had expressed optimism about the company’s future, saying “I am happy that we achieved many milestones across Africa and made the important transition from building cement plants to making cement. We are well on our way to becoming a global and respected cement producer, operating in some of the most exciting markets in the world.”
The cement manufacturing company has maintained strong growth in profit in recent years until 2014 when sales revenue was flat and profit dropped by about 21 percent. Sales revenue is accelerating and a new peak in profit can be expected from the company in 2016. The profit drop in 2014 followed a loss of profit margin, which was caused by a slowdown in sales revenue and an increase in cost of sales. But in the year under review, the company has regained its profit margin following accelerating sales revenue, a moderation in cost of sales and a shift from a net interest expenses to a net interest income.
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