Dangote volumes up 4% in 1Q22

Dangote has reported a 24.2 per cent YoY increase in group revenue to NGN413.2bn (US$995.4bn) in the opening quarter of 2022. Group EBITDA over the same period advanced by 18.6 per cent to NGN211bn giving a margin of 51.1 per cent. Sales volumes for the group fell by 3.6 per cent YoY to 7.2Mt as operations relying on cement and clinker imports, namely Ghana, Sierra Leone and Cameroon, were disrupted by global supply chain issues. Profit after tax in the 1Q22 advanced by 18 per cent YoY to reach NGN105.9bn.
 
In the Nigerian market, volumes contracted by 1.5 per cent YoY to 4.8Mt as energy supply challenges continued to impact production. Nigerian EBITDA saw an uptick of 24.5 per cent to NGN196.5bn with a 61.1 per cent margin, supported by robust cost control measures countering inflationary pressures. The company is currently ramping up production at its Okpella plant in Edo State, Nigeria, while plans to deploy grinding plants in Ghana and Côte d'Ivoire are progressing well. Cement exports from Dangote Nigeria came in at 213,000t over the three-month period, up 55 per cent on the 1Q21. 
 
Pan-Africa volumes declined by 7.6 per cent YoY to 2.4Mt due to extended plant maintenance in Senegal and the Republic of Congo, as well as volatility in cement/clinker landing costs in Cameroon, Ghana and Sierra Leone. Lower sales volumes resulted in a 1.8 per cent contraction in revenues to NGN91.3bn for the pan-Africa market, while EBITDA fell 23 per cent to NGN18.2bn with an EBITDA margin of 20 per cent. Cost pressures hit countries importing clinker (Cameroon) and cement (Ghana, Sierra Leone) due to high freight costs and overall scarcity. Tanzania, however, posted a strong performance with volumes up 77 per cent YoY. 
 
Due to the volatile international environment, Dangote is stepping up its use of alternative fuels. The company achieved a 2.9 per cent alternative fuel thermal substitution rate in the 1Q22, compared to 1.6 percent in the same period last year. The execution of its export-to-import strategy is also a priority. “Reducing our dependence on imported inputs and making our markets self-sufficient has never been more relevant from a regional perspective,” said Michel Puchercos, CEO, Dangote.
 
The 1Q22 has also seen Dangote complete the second tranche of its buyback programme. Following the completion of both tranches, the company has now bought back 0.98 per cent of its shares outstanding.