Dangote Cement’s overall group revenue increased by 36.5 per cent from NGN442.1bn (US$1.08bn) in the first 9M16 to NGN603.6bn in 9M2017, despite a 10.1 per cent fall in group cement volumes to 16.5Mt, as the impact of price increases dampened demand in Nigeria. The group’s profit for the period was NGN193.1bn, up 44.6 per cent compared to NGN133.5bn in 2016.

“Dangote Cement has continued to perform strongly in 2017 with revenues up nearly 37 per cent despite a fall in volumes. In our key operations in Nigeria we have significantly improved our fuel mix and this has helped increase margins across the Group. It is especially good for Nigeria because most of the coal we are using is mined in our own country, ” said Onne van der Weijde, the company's CEO.

“Our Pan-African operations are performing strongly with excellent sales growth in Cameroon, Ethiopia and Senegal. We are consolidating our success across Africa and have just commissioned our 1.5Mta factory in Congo, the 10th country in which we have established operations,” he added.

Nigeria
Sales volumes from Nigerian operations fell from 11.9Mt to 9.6Mt, although the new pricing structure more than offset the 19.2 per cent fall in volumes, with revenues from Nigeria increasing by 35.2 per cent to NGN416.1bn (9M16: NGN307.8bn).

Dangote Cement estimates that Nigeria’s total market for cement was 14.8Mt, approximately 18 per cent lower than the estimated 18Mt sold in Nigeria in the first nine months of 2016. Of total market sales in the first nine months of 2017, the company estimates that just 0.15Mt was imported.

As a result of the slower market, Dangote’s Nigeria operation sold 9.6Mt of cement, down 19.2 per cent on nearly 12Mt sold in the first nine months of 2016. The company’s market share was about 65 per cent during the first 9M17. Over the nine-month period the realised price was NGN43,210/t.
 
Despite the lower volumes, Nigerian operations increased revenues by 35.2 per cent to NGN416.1bn and EBITDA by 64.8 per cent to NGN270.5bn (excluding central costs and eliminations).

Pan-African operations
In the 9M17 Pan-African operations increased cement sales by 7.5 per cent to 7Mt as Dangote factories continued to consolidate their market shares across Africa. Pan-African revenues increased by 40.4 per cent to NGN191.9bn and EBITDA increased by 43.5 per cent to NGN32.3bn.

Pan-African operations sold about 42 per cent of total group cement volumes, provided nearly 32 per cent of group revenues (before inter-company eliminations) and 10.7 per cent of group EBITDA (before central costs and eliminations).

Cameroon
Dangote’s Douala grinding unit sold approximately 938,000t of cement in the first 9M17, an increase of 16.4 per cent on the 806,000t sold in the same period of 2016. Dangote estimates its market share to have been approximately 46 per cent during the period. The price of cement was about US$112/t in September.

Congo
The 1.5Mta Mfila plant began operations in late September 2017 and sold 5000t of cement during the period.

Ethiopia
Dangote Cement Ethiopia increased sales by 16.8 per cent to nearly 1.7Mt in the first nine months of 2017 (9M16: 1.4Mt). This represents capacity utilisation of approximately 88 per cent.

Ghana
Dangote Cement Ghana sold approximately 670,000t of cement in the first 9M017, slightly down on the 761,000t cement sold during the same period in 2016.

Senegal
The 1.5Mta plant in Pout sold 1Mt of cement in the first nine months of 2017, up 21.7 per cent on the comparable period of 2016. This represents almost 89 per cent capacity utilisation at the factory.

Sierra Leone
The 0.7Mta import and bagging facility began operations in Freetown in January 2017. The facility sold approximately 68,000t of cement in its first nine months of operation.
 
South Africa
Dangote increased sales in South Africa by approximately 10 per cent in the 3Q17. The company raised prices by five per cent in February, at the same time increasing delivery rates. The cement prodcuer increased prices again in August, by 2-3 per cent.

Tanzania
The plant in Tanzania increased volumes by more than 12 per cent to nearly 541,000t in the first nine months of 2017 with a market share of 14 per cent at the end of the period. The ex-factory price during the period was around US$63/t in September.

Zambia
The 1.5Mta factory in Ndola sold approximately 545,000t of cement in the first nine months of 2017, only marginally down on 2016, in part because of a heavy and prolonged rainy season that affected construction activity. However, sales increased by approximately 12 per cent in the third quarter of 2017, to more than 160,000t, including export sales to Malawi.

PPC
The company remains interested in acquiring South African rival PPC and would do a deal at the right price, its outgoing CEO, Onne van der Weijde, said, according to a Reuters report. He considered PPC was a "good fit". The company made an approach to PPC last month, but later withdrew, saying it did not want to get into a lengthy process with an uncertain outcome.

Eurobond issue
In addition, Dangote Cement is considering issuing eurobond or a local debt issue and will make a decision towards the end of the year, its CFO, Brian Egan, said.

Reuters quoted Mr Egan to have said 70 per cent of the company’s NGN389bn debt was short term and from its parent firm, Dangote Industries Ltd. He said that the company was interested in issuing a eurobond given that yields were decreasing and the naira was stabilising.