Unless something positively drastic happens within the last quarter of the year, the directors of Dangote Cement Plc may be unable to pay as much dividend as it did last year without recourse to ….
Highlights of the result showed that the N1.045tr or 69.06% growth recorded in sales revenue in the nine-month period was wiped out by the N593.573bn or 92.35%. As if this was not bad enough, administrative expenses soared by 95.65%; just as selling and distribution increased by 83.94%; such that operating profit could only grow by 33.76% which was helped by the 105.28% in other income. Finance cost further worsened the situation as it increased by 137.36%.
Dangote Cement reported a revenue of N2.56tr, almost entirely from the sales of cement and clinker, up from N1.514tr in the prior nine months. Of this, the group’s Nigerian operations contributed N1.531tr, or almost 60%; from N933.084bn or 61.60%.
Production cost of sales stood at N1.235tr, up from N642.743bn on the back of the equally significant jump in haulage expenses which rose to N212.22bn; followed from after by N36.345bn cost of Production cost during the period was driven significantly by the N534.827bn cost of fuel and power consumed, more than double the previous N255.445bn; followed by cost of materials valued at N299.831bn from N169.906bn; among others. Gross profit increased by N452.399bn or 51.88% from N871.858bn to N1.324tr.
Administrative expenses grew to N145.601bn from N74.421bn, with salaries and related staff costs contributing N44.294bn from N21.774bn; selling and distribution expenses leaped to N464.713bn from N252.64bn, boosted by the N405.806bn
Other income stood at N37.149bn, compared to the previous N16.635bn, boosted by other miscellaneous income of N34.02bn, up from N11.08bn (including the N20bn generated from sale of materials to related parties, and N4.7bn being the revenue from sale of electricity to third parties. Impairment of financial assets increased to N692m from N424m; resulting in operating profits of N750.4bn, up from N561.008bn in the corresponding period of last year.
Finance income for the period increased marginally from N20.667bn to N29.129bn; but finance costs ballooned by N261.122bn or 137.36% to N451.219bn from N190.097bn, of which N227.672bn was gross interest expenses, an increase from N92.166bn. Also, net foreign exchange loss rose from N99.016bn to N222.079bn; gains on net monetary positions rose to N78.076bn from N13.312bn.
Following of these, Profit before tax only rose marginally by N1.496bn or 0.37% from N404.89bn to N406.386bn; just as income tax expense was flat at N127.29bn, down from N127.342bn; leaving net profit for the period at N279.096bn, up by N1.548bn or 063% from N277.548bn. The profit after tax translated to earnings per share of N16.55 each, from N16.08 per share.
