Business a.m.

Dangote Cement Plc, Nigeria’s largest cement producer, reported a pre-tax profit of N293 billion in the first half of the fiscal year 2024, representing a 22 percent year-over-year growth from the N239.9 billion recorded in the same period of the previous year.

Furthermore, the company’s revenue experienced a year-on-year surge of 85 percent, from N950.8 billion in H1 2023 to N1.76 trillion in H1 2024, highlighting the company’s strong market position and favourable business prospects.

Despite the robust revenue growth in the first half of 2024, Dangote Cement Plc faced a significant challenge in the form of a 118 percent year-over-year increase in production costs of sales, amounting to N833.3 billion, up from N383.1 billion in the same period in 2023. This substantial hike in production costs had an impact on the company’s bottom line, with a marginal six percent year-over-year growth in net profit to N189.9 billion in H1 2024, compared to N178.6 billion in H1 2023.

Amidst an impressive overall financial performance in the first half of the fiscal year, Dangote Cement Plc experienced a significant impact from inflationary pressures. The company’s operating expenses ballooned  103 percent year-over-year to N403.2 billion in H1 2024, compared to N198.7 billion in the same period last year.

During the period, the company’s production volume hit 13.792 million tonnes, representing a four percent improvement from the 13.249 million tonnes production volume of H1 2023.

Dangote Cement Plc also reported growth in revenue generated by its entities operating outside Nigeria, recording a 140 percent year-over-year increase to N807 billion in H1 2024, compared to N336.4 billion in the same period of the previous year.

Despite the impressive growth in revenue from entities operating outside Nigeria, Dangote Cement Plc reported a N68.5 billion net loss from these entities during the first half of 2024. This indicates the challenges faced by the company in achieving profitability in its international markets, potentially due to factors such as increased competition, currency fluctuations, or market instability.

However, the group’s gain on its monetary position increased significantly to N49.1 billion in H1 2024, up from N6.7 billion in H1 2023, representing a strong improvement in the company’s financial health.

Dangote Cement was adversely affected by a steep rise in interest expenses during the first half of 2024. The company recorded interest expenses amounting to N130 billion, a 167 percent year-over-year increase from N48.8 billion incurred in the same period last year.

Dangote Cement witnessed substantial increases in key cost components during the first half of the year 2024. Power costs, a critical expense for the company’s cement production, rose 139 percent year-on-year to reach N374.8 billion, compared to N157 billion in the same period last year.

Dangote Cement saw its current tax liability rise by N20.3 billion, reaching N194.6 billion in the first half of 2024 compared to N174.3 billion at the end of FYE 2023.

Meanwhile, the company’s payables saw a substantial increase of approximately N308.8 billion in the first half of 2024, with the company’s trade and other payables rising to N928.8 billion, a 50 percent year-on-year increase from N620 billion at the end of FYE 2023.  The company’s payables were significantly impacted by a N292 billion trade payable balance in the first half of the fiscal year 2024, a 59 percent increase from N184 billion at the end of FYE 2023.

The group also has a withholding tax liability of about N140 billion, up from N64.6 billion at the start of the year.

Dangote Cement’s financial liabilities witnessed a mix of changes during the first half of 2024. While the group’s bond and commercial paper liabilities decreased by N27.8 billion to N434.4 billion, its letters of credit rose N384.5 billion to N501.2 billion.