Dangote Cement sees modest revenue decline in 2019

Nigeria’s Dangote Cement has seen a modest 1.1 per cent YoY decrease in revenue to NGN891.67bn (US$2.45bn) for 2019, compared to NGN901.21bn in the previous year. EBITDA also fell 9.2 per cent YoY to NGN395.43bn from NGN435.26bn, while the margin declined to 44.3 per cent from 48.3 per cent in 2018.

Total cement sales volumes in 2019 remained largely consistent YoY at 23.566Mt against 23.535Mt in 2018.

"Dangote Cement maintained strong financial performance despite a low growth environment, pricing pressure and increasing competition in key markets. The Nigerian operations maintained volume and revenue performance in a challenging environment. Export sales were affected by the border closure in the second half of 2019. Looking ahead, I expect an increase in volumes in 2020 as we commence clinker exports via shipping from Nigeria," said Joe Makoju, group CEO.

Nigeria
The company’s Nigerian operations saw cement volumes remain flat at 14.1Mt in 2019, including 0.45Mt of exports. While domestic sales increased two per cent YoY to 13.7Mt, exports declined 41 per cent YoY due to the border closure in the last few months of 2019.

Revenue was down 1.3 per cent to NGN610.2bn, on the back of a higher level of discounting in key markets, according to the company. EBITDA slipped 9.1 per cent YoY to NGN361.2bn from NGN397.4bn owing to discounts, additional marketing expenses and an increase in haulage costs. In dollar terms, ex-factory cement prices averaged US$112/t for the full-year 2019.

Pan-Africa
Pan-African operations sold 9.44Mt of cement in 2019, up 0.8 per cent on the 9.37Mt sold in 2018. Revenues for the segment dipped 0.2 per cent to NGN282.7bn from NGN283.2bn, while EBITDA fell 2.5 per cent to NGN47.86bn. The company has attributed the lower profitability to depressed economic conditions in South Africa and Zambia. Looking ahead, Dangote expects to complete its 1.5Mta grinding plant in Côte d’Ivoire by the end of 2020.