Dangote Cement Nets N105.85bn, As Loss Making African Arms Sag Profit

Dangote Cement Plc, on Friday presented its unaudited financials for the first quarter ended March 31, 2022, showing that revenue rose faster than profit, after production costs, finance costs, as well as selling and distribution cost increased more significantly, just as tax expenses rose by 25.14%. The profit level could have been more significant, but for the increased loss position of the group’s Pan-African subsidiaries during the period under review.

According to the result presented to the Nigerian Exchange Limited, revenue by N80.53bn or 24.2% from N332.651bn in the first quarter of last year, to N413.181bn; while production cost of sales recorded a N26.112bn or 20.4% growth at N154.108bn from N127.996bn; resulting in gross profit of N259.073bn, up from N204.655bn. Growth was mainly driven by a combination of fuel and power consumed, which rose from N40.701bn to N50.471bn; while materials consumed rose from N49.318bn to N50.622bn.

Administrative expenses inched from N15.764bn to N16.934bn, led by salaries and related staff costs which rose to N5.25bn from N4.417bn; while selling and distribution expenses grew by N19.627bn or 47.8% from N41.059bn to N60.686bn, the lion’s share of which was the haulage expenses that grew from N31.445bn to N49.534bn. Other income fell by N2.895bn or 74% from N3.912bn to N1.017bn. When added to the impairment of financial assets of N333m, profit from operating activities improved from N151.744bn to N182.803bn.

Finance income (interest income) recorded a growth of N6.702bn or 183.41% from N3.654bn to N10.356bn; just as finance costs increased by N11.464bn or 45.32% from N25.297bn to N36.761bn, boosted by the twin effects of interest expenses that rose from N14.384bn to N18.353bn; and foreign exchange loss of N18.22bn, up from N10.616bn.

Profit before tax, therefore rose to N156.398bn from N130.101bn; while the income tax expense of N50.547bn, up from N40.391bn, resulted in profit after tax of N105.851bn, an improvement of N16.141bn or 17.99% from N89.71bn reported in the first quarter of 2021. The net profit for the period translated to earnings per share of N6.18, compared to the previous N5.29 each.

A further breakdown of the numbers showed that Nigeria remains the group’s operation honeypot, contributing N321.918bn or 77.91% of sales revenue, compared to N239.684bn or 72.05% in the similar period of last year. The country also accounted for

N126.277bn of net profit, as against N103.776bn; while the group’s pan-African operations recorded N91.263bn in revenue, a drop from N92.967bn; while suffering N44.588bn in net loss, a 182.38% jump during the period.