Dangote Cement Group's unaudited 9M19 results see volumes rise 1.1%

Dangote Cement Group's unaudited results for the 9M19 to 30 September 2019 saw group volumes up 1.1 per cent to 18Mt and Nigerian sales up 0.6 per cent to 10.8Mt, driven by strong 3Q19 promotional activity. Pan-African cement volumes rose by 1.7 per cent to 7.1Mt for the 9M19.

However, group revenue fell by 0.8 per cent to NGN679bn (US$1.88bn) and group EBITDA slipped by 10.1 per cent to NGN303.2bn.

Joe Makoju, Group Chief Executive Officer said: "The huge success of our Bag of Goodies promotion drove third-quarter volume growth up by 9.4 per cent in Nigeria and this helped group sales volumes increase by 1.1 per cent in the first nine months of 2019.

"Nigeria's performance, augmented by strong growth in Tanzania and consistently good sales in Senegal, helped to offset some economic and operating challenges we have experienced in key territories such as Ethiopia and South Africa."

Dangote group's total cement volumes for 9M19 reached 17.96Mt up 1.1 per cent on 9M18 sales of 17.77Mt. Group revenues for 9M19 reached NGN679.8bn, down 0.8 per cent on NGN685.3bn in 9M18. Group net profit for 9M19 totalled NGN154.4bn, down 2.5 per cent from NGN158.3bn in 9M18.

Pan African performance
Excluding Nigeria, revenues fell by 0.5 per cent to NGN213bn and EBTDA slipped by 3.5 per cent to NGN37.8bn. Highlights included the company's Tanzania's cement volumes, which rose by 106 per cent in the 9M19 period, and Senegal's performance, where sales exceeded 100 per cent of plant capacity.

In Cameroon Dangote Cement sold 0.87Mt of cement in 9M19, down from 0.92Mt in 9M18. Sales were in part challenged by the entry of 1.6Mta new competitor capacity.

In Rep Congo, Dangote Cement sold 0.17Mt of cement in 9M19, up nearly 12 per cent on 9M18 helped by the new 32.5R product and sales price promotions. Exports of clinker to Cameroon and exports to DR Congo and Central Africa are part of Dangote Cement's forward strategy.

In Ethiopia sales totalled 1.4Mt in 9M19 remaining stable, despite an electricity shortage in 2Q19, leaving Dangote with a market share of 29 per in 3Q19.

In Ghana, the company sold 0.38Mt of cement in 9M19, down 36.4 per cent owing to lower supplies of cement. This gave Dangote Cement a 10 per cent of the market in Ghana.

Senegal's market saw 1.1Mt of cement sales for Dangote Cement in 9M19 up 7.9 per cent and giving the company a 23 per cent market share, while exports to Mali continued with higher prices.

Sierra Leone saw company volumes rise by 108 per cent to 0.17Mt in 9M19 and Dangote Cement recorded a 41 per cent share of the domestic market.

South Africa's market remains depressed and cement sales fell 15 per cent YoY versus a fall of 19 per cent after 6M19. The market also saw cement price increases of 2.5-3.5 per cent, inclusive of 1.5-2.5 per cent carbon tax recovery.

In Tanzania, Dangote Cement sold 0.3Mt of cement in 3Q19. Volumes were up 106 per cent from 0.4Mt in 9M18 to 0.84Mt in 9M19.

Finally, Zambia saw volumes increase by 1.6 per cent to 0.78Mt to give Dangote Cement a 42 per cent market share having implemented a cement price rise in 2Q19.