The board of Dangote Cement Plc, sub-Saharan Africa’s largest cement producer, on Tuesday, presented its audited financials to the Nigerian Stock Exchange (NSE), showing that net profit grew by 37.67%, faster than the 15.98% rise in total revenue for the year ended December 31, 2020.
The growth was however, despite the 94.64% jump in income tax expenses for the period from N49.958bn in the preceding year end to N97.242bn, following which the board is proposing a dividend per share of N16, same as in previous year for approval by shareholders at its next annual general meeting.
According to the result, the group with an installed capacity of 45.6Mta across 10 African countries reported gross revenue of N1.034tr, up from N891.671bn, up by N142.525bn. Sales revenue from Nigeria accounted for N719.945bn, or 69.61% of total; while the remaining N318.681bn came from its pan-African operations; compared to N610.247bn, or 68.43%, and N282.71bn respectively in the prior year.
Production cost of sales rose to N437.97bn, as against the previous N379.989bn, driven primarily by cost of fuel & power consumed, amounting to N146.342bn, up from N122.851bn; followed by material consumed valued at N134.91bn, from N117.239bn; salaries and related staff costs, N37.02bn, from N32.955bn; while depreciation and amortization dropped marginally to N64.946bn from N65.254bn. Plant maintenance gulped N30.706bn from N28.766bn; other production expenses rose significantly to N15.67bn from N7.75bn; among others.
This resulted in gross profit for the period of N596.226bnbn, from N511.682bn; while administrative expenses increased from N54.124bn to N60.339bn; just as selling and distribution expenses dropped marginally to N153.719bn from N160.835bn, driven by the N98.954bn haulage expenses, which dropped from N107.176bn.
Other income rose to N4.754bn from N2.98bn; leaving profit from operating activities at N386.734bn, compared to N299.893bn.
Finance income soared to N29.814bn from N7.61bn, lifted by foreign exchange gain valued at N16.631bn from nil in prior year; interest income amounted to N13.183bn, from N7.61bn. This growth was seriously eroded by the increase in Finance costs to N43.988bn from N57.673bn, buoyed by interest expenses of N46bn, a marginal decrease from N46.399bn; following which profit before tax stood at N373.31bn, from the previous N250.479bn.
The group’s income tax expense for the period soared to N97.242bn, from N49.958bn; leaving profit for the year at N276.068bn, from N200.521bn, which translates to Earnings per share, basic and diluted of N16.14; compared to N11.79 in the previous year.
A statement by the group linked the growth in top and bottom lines to cost saving measures embarked upon by the company, and despite inflationary pressures and foreign exchange volatility.
Disciplined cost control measures, including improved plant efficiency, better fuel mix and general overhead optimization, it added, enabled the company to maintain a relatively flat cash cost per tonne.
The statement quoted Chief Executive Officer of Dangote Cement Plc, Michel Puchercos, as saying “2020 was a good year for Dangote Cement across board. Several firsts made 2020 a productive year such as our maiden clinker shipment, maiden bond issuance and successful buyback programme. We increased our capacity by 3Mt in Nigeria, commissioned our two export terminals and commissioned our gas power plant in Tanzania. All these were achieved whilst we focused on protecting our people, customers and communities from the impact of the pandemic.
“Dangote Cement recorded strong top-line growth supported by strong cement demand. Profitability was further bolstered by our disciplined cost control measures in what we believed to have been a highly inflationary and volatile year. These measures resulted in a 37.7% increase in profit after tax to ₦276.1bn.
“I am delighted to report that Dangote Cement experienced its strongest year in terms of EBITDA and strongest year in terms of volumes. Despite a challenging environment, Group volumes for the year were up 8.6% and Group EBITDA was up 20.9%.
“Looking ahead, we have strengthened our Alternative Fuel initiative which focuses on leveraging the circular economy business model and reducing exposure of our cost base to foreign currencies fluctuations. We continue to embed Dangote Cement’s 7 sustainability pillars into every aspect of our operation and culture. “We remain committed to keeping safe our staff and communities by being fully compliant with health and safety measures in all our territories of operation. We are focused on adapting to the rapidly evolving markets in which we operate,” he added.
