Dangote Cement Blames Slow Q1 Growth On Tanzania, Ghana Plants Shutdown, Ethiopia Conflict

The management of Dangote Cement Plc said it would have achieved much more than the 16.31% growth in sales revenue and 29.1% in profit after tax, if not for the shutdown in its Tanzania and Ghana operating plants, made worse by conflict in Ethiopia.

In a management commentary at Tuesday’s 2018Q1 conference call, the management announced a 10% price increases in Ethiopia; 5% in South Africa; and “very marginal” increase in Tanzania during quarter.
A bit of a price increase is still expected in Ethiopia, to fully cover the impact of last year’s currency devaluation; just as price was increased by N50/bag in Nigeria this month, “in reaction to inflation”.

Dangote Cement also noted a growth in its Nigerian volume, reflecting the country’s post-recession activities, just as rising monthly government revenue continues to support infrastructure spending. This has been supported by the company’s marketing initiatives, following which the directors project a 10% volume growth or more this year.
The company also a deliberate shut down of by-road shipment of cement from Nigeria to Ghana owing to the high cost involved, to prepare for exports by sea to Ghana early in 2019.

According to the result presented to the Nigerian Stock Exchange (NSE) on Tuesday, 2018 first quarter revenue rose to N242.116bn, up from N208.166bn; while profit before tax increased by 40.21% from N77.317bn to N108.403bn; while net profit climbed 29.1% to N72.123bn from N55.866bn, representing Earnings Per Share of N4.23, from N3.28 each.
A statement by the company Dangote Cement for the period exported a total of 211 kilotons of cement to Ghana, Togo and Niger, just as volume in Nigeria increased significantly by 5.3% to nearly 4 million tons for the period under review.
A breakdown of the results indicated that total volume of cement sales by the Group went up by 2.8% to 6.2m tonnes with Nigerian volumes up by 5.3% to nearly 4.0 million tonnes.

The statement also announced the appointment Engineer Joe Makoju was appointed Group Chief Executive, while Cherie Blair and Mick Davis also joined the board as Independent Non-Executive Directors.
Commenting on the performance, Makoju said: “The first quarter of 2018 has started strongly with substantial increases in revenues and profitability that drove excellent cash generation across the Group. Despite a slightly slower start to the quarter, Nigerian volumes increased significantly in March and underpin our confidence that 2018 will be a good year for the Group.
“Across our Pan-African operations, higher revenue per tons boosted revenues and increased EBITDA margins, with great potential to improve further when Tanzania switches to gas,” he added.

Speaking on the capacity of the company, Makoju said “Dangote Cement is Africa’s leading cement producer with nearly 46Mta capacity across Africa. A fully integrated quarry-to-customer producer. The company has a production capacity of 29.25Mta in its home market, Nigeria. Our Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines; our Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and our Gboko plant in Benue state has 4Mta. Through our recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighbouring countries.

“In addition, we have operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta). “
Also, the company’s chairman, Aliko Dangote said: “I am delighted to welcome Cherie and Mick to the Board of Dangote Cement. They bring diverse and valuable experience of emerging-market business, sustainability and governance to our board.”

https://investdata.com.ng/2018/04/dangote-cement-blames-slow-q1-growth-tanzania-ghana-plants-ethiopia/