Dangote Cement’s annual sales touch record N1.6trn

Dangote Cement reported an increase in its bottom line for 2022 as its net profit slowed to a single digit from as much as 32 per cent in the preceding year.

Although the growth was impacted by headwinds from operational costs and the urgency to commit part of revenue to expansion, revenue for the year under review came to N1.6 trillion from N1.4 trillion, a 17 per cent jump.

The need to scale means sub-Saharan Africa’s largest cement producer invested more fund summing up to N249.3 billion in twenty five of its subsidiaries, most of them outside Nigeria, rather than allowing the cash to boost profit.

Independent auditor KPMG highlighted the development in a report accompanying the audited financials released on Monday, noting that some of those units “are currently loss-making and are dependent on financial support” from the group.

The industrial giant recorded the fairly stronger revenue despite a slide in sales volume, hiking prices of products to boost turnover.

Altogether, 27.8 million tonnes of cement and clinker were sold relative 29.3 million for the previous year.

Administrative expenses climbed a quarter to N79.9 billion, largely spurred by labour costs.

Dangote Cement incurred N295.2 billion in selling and distribution expenses, which rose by more than a half, mirroring the weight of transporting expenses on businesses in its home market Nigeria, where logistics cost is one of the world’s highest.

Profit before tax fell 2.7 per cent to N524 billion as the cash allocated to servicing debt through finance costs nearly doubled.

But profit after tax improved, deriving strength from a lower income tax expense, rising to N382.3 billion from N364.4 billion.

Shareholders’ payment

Meanwhile, the company says it will stick to the same amount paid to shareholders in fiscal year 2021 for 2022.

The corporation disclosed in its audited annual report it would pay a dividend of N20 per share for 2022, retaining the payout level for 2021 when it declared N340.8 billion in total.

Directors “consider the capital needed to fund the company’s operations and expansion plans,” the document said, above the need to raise cash rewards for shareholders.

The stock’s price saw no upward movement at the end of trade in Lagos, where it has a quotation of N272 per unit, which could mean the announcement is no cheering news for equity investors.

Subject to withholding tax, the dividend proposal awaits shareholder’s endorsement at Dangote Cement’s forthcoming annual general meeting, with qualification date set for 30 March.

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“By April 14, 2023, dividends will be paid electronically to shareholders whose names appear in the Register of Members as at March 30, 2023,” the company says elsewhere.

The company is setting up a new cement factory at Itori, Ogun State, expected to add 6 million tonnes to its current nameplate capacity of 51.6 million tonnes per year.