Dangote Cement Nets N119.24bn Half-Year Profit, After 50% Tax Expense Drop

The board of Dangote Cement Plc, on Monday, submitted its half-year performance scorecard for the period ended June 30, 2019, with revenue declining marginally by N14.709bn or 3.09%; just as production cost of sales and gross profit, with other income unable to compensate for the decline. Net profit for the period was however saved from a decline also by the 50% reduction in income tax expense for the period.
According to the result, revenue stood at N467.73bn, a slight decline from N482.439bn in the first half of 2018, after cement sales volume reduced from 12.362m tonnes to 12.362m tones. Revenue from the sale of cement remained its major income source, accounting for N467.73bn, up from N482.439bnbn. Nigeria also remained its major market, accounting for N328.287bn of its income, compared to the previous N344.104bn; while N140.088bn came from its pan-African operations during the six-month period, up from N138.685bn.
The production cost of sales dropped to N193.172bn from N197.595bn; resulting in gross profit of N274.558bn, compared to the N284.844bn in the prior half-year, boosted by fuel and power consumed at N62.224bn, which dropped from N67.802bn; followed by material consumed valued at N60.412bn from N61.802bn, among others.
The administrative expense was however flat at N24.978bn, as against the N24.714bn of the preceding half-year; selling and distribution expenses jumped by N18.163bn from N62.149bn to N80.312bn, propelled by the N55.796bn haulage expenses, which rose from N41.807bn. Other income dropped to N1.228bn from N2.536bn, representing a decline by N1.308bn or 51.58%; following which operating profit fell by N30.021bn or 17.61% from N200.517bn to N170.496bn.
Finance income (interest on bank deposits) fell also from N6.551bn to N4.611bn over the period; at a time finance cost dropped to N19.619bn, compared to the N21.53bn reported in the first two quarters of 2018. Finance costs continue to be driven by interest expenses, which stood at N15.418bn, which reduced from N18.416bn; and the N4.032bn interest expenses, which jumped from N2.965bn.
Profit before tax, however, dropped from N300.806bn in the first half of 2018 to N155.488bn, representing a decline of N145.318bn or 48.3%; a situation that was mitigated by the N36.126bn or 49.92% reduction in income tax expense over the period. After-tax profit, therefore, rose to N119.24bn from N113.164bn; with a breakdown showing that net profit from Nigeria stood at N155.874bn, dropping from N160.69bn in 2018; even as the group reported a loss of N37.363bn in its pan-African activities, up from N26.047bn in prior half-year. The net profit translated to Earning Per Share of N7.01, as against the previous N6.60 each in the corresponding period of 2018.