Dangote Cement presented its unaudited 2019Q1 financials at the close of trading on Friday, the highlight of which was the marginal drop in sales revenue, while expenses, particularly selling and distribution, depressed profit for the period, while the rise in ‘other income’ was not enough to mitigate the impact.
Also, the report showed that while there was the N3.715bn or 3.39% drop in net profit from the Nigerian operation at N80.809bn in 2019, compared to the N84.524bn recorded in 2018, the pan-African leg suffered N20.355bn loss, increasing by 1,475.46%.
Revenue stood at N240.157bn, compared to N242.116bn, the bulk of which was the N240.091bn from the sale of cement, up from N241.985bn, with the sale of other products yielded N66m, as against N131m in the prior Q1. Sales revenue from its Nigerian operations yielded N169.885bn, representing 70.74% of total revenue, while the pan-African operations contributed the remaining N70.272bn or 29.26%.
Production cost of sales increased to N99.478bn from N97.352bn, the lion’s share of which was the N32.3bn spent on fuel and power consumed, slightly up from N32.115bn; followed by the N29.645bn spent on material consumed, from N28.763bn; among others. Gross profit, therefore, dropped marginally from N144.764bn to N140.679bn.
Administrative expenses increased to N13.224bn from N11.852bn; while selling and distribution expenses by N10.43bn or 33.97% from N29.567bn to N39.61bn, which was mainly the N27.422bn haulage expenses, rising 32.81% from N20.648bn. Other income increased from N442m in the corresponding first quarter of 2019 to N537m. Operating profit, therefore, fell by N15.405bn or 14.84% from N103.787bn in the 2018Q1, to N88.382bn.
Finance (interest) income slipped marginally to N2.286bn from N2.622bn; while ‘other’ finance income was nil, compared to N12.476bn in the prior Q1. Finance costs rose by N1.226bn or 11.69% from N10.482bn to N11.708bn, with interest expenses contributing N8.536bn, down from N10.407bn, worsened by the N3.078bn foreign exchange loss, which never existed in the prior Q1. Profit before tax, therefore, declined from N108.403bn to N78.96bn, representing 11.69% decline.
The drop in net profit could have been more significant, but for the N17.574bn or 48.43% from N36.28bn in the first quarter of 2018 to N18.706bn, out of which current tax expense stood at N17.401bn, up from N11.53bn and deferred tax expense dropped to N1.305bn from N2.75bn. After-tax profit for the period, therefore, dropped by N11.879bn or 16.46% from N72.123bn to N60.254bn; following which net profit translated to Earnings Per Share of N3.54, as against the N4.20 in the corresponding period of 2018.