Dangote Cement volumes fall 14% in 1Q23

Dangote Cement has reported a 1.6 per cent YoY decline in group revenue to NGN406.7bn (US$883.2m) in the first quarter of 2023. Group EBITDA over the same period fell 12 per cent to NGN185.7bn, while pan-Africa EBITDA came in at a record NGN31.2bn, up 71 per cent YoY. Group profit after tax advanced by 3.4 per cent YoY to NGN109.5bn, with earnings per share improving by 4.2 per cent to NGN6.44. Group sales volumes fell 13.5 per cent to 6.3Mt, while pan-Africa volumes expanded by 8.9 per cent to 2.6Mt. 

“Strong operational delivery, rigorous focus on costs and capital discipline has enabled us to deliver strong profits for the first quarter, despite the volatile macroeconomic environment. Our profit after tax increased by 3.4 per cent to NGN109.5bn. Similarly, our Africa strategy continues to yield the needed gain, with pan-African delivering strong growth in revenue and EBITDA of 38.5 per cent and 71 per cent, respectively. In Nigeria, the cash crunch coupled with the uncertainty around the general elections led to a slowdown in key private and public infrastructure investments. Consequently, our Nigerian operations recorded a drop in volume, resulting in a 13.5 per cent decline in group volume,” commented Arvind Pathak, chief executive officer, Dangote.

Dangote’s Nigerian operations sold 3.6Mt of cement in the first quarter of 2023, down 24.6 per cent from the 4.8Mt sold in the 1Q22. Revenues for the Nigerian operations declined by 12.9 per cent to NGN280.3bn, due to the uncertainty around the Nigerian elections and stalled economic activities. The increased price of automotive gas oil resulted in a 7.9 per cent YoY increase in selling and distribution costs. As a result, EBITDA at its Nigerian operations was down 19.3 per cent to NGN158.6bn, at a margin of 56.6 per cent, excluding central costs and eliminations. The company is strengthening its local production capacity with the construction of an additional 6Mta cement plant in Itori, Ogun state. Once completed, Dangote’s local capacity in Nigeria will increase to 41.25Mta. 

Its pan-African operations performed strongly in the first quarter owing to robust demand particularly from Senegal, Republic of Congo and Zambia, with Senegal now back to operating at full capacity. This was supported by a rebound in Congo’s operations after months of shutdown due to maintenance in the first quarter of 2022. Sales volume for the pan-African operation was up to 2.6Mt in the 1Q23 from 2.4Mt in the same quarter a year earlier. Total pan-African volume accounts for 41.9 per cent of group volumes. Pan-African revenues of NGN126.4bn were 38.5 per cent higher than the 1Q22, with the region’s revenue accounting for 31.1 per cent of total group revenue.