Dangote Cement records 16.3% net profit growth in 2018 first quarter

By Afolabi Adesol

Dangote Cement has published its Q1-18 result, showing revenue and net profit grew by 16.3 percent and 29.1 percent respectively when compared with figures of Q1 2017.

Net finance income stood at N4.6 billion, as against N5.9 billion in Q1-17 and N3.8 billion in Q4-17. The net finance income is the group’s first since Q2-16, supported by a net exchange gain of N12.5 billion, driven mainly by higher naira exchange rate and the resultant in gains on intergroup assets.

Speaking at the company’s investor’s conference on Tuesday, Dangote Cement management in a commentary compiled by Cordros Capital said higher volume from the Nigerian market reflects improved post-recession activities, and improved monthly government revenue which is supporting infrastructure spending as Cranes are back at construction sites in Abuja.

The commentary also revealed that asides from the seemingly favourable environment, Dangote cement’s marketing initiatives are also supporting volume outturn, as the company suggests volume growth of 10 percent, or even more, is achievable in 2018.

“Pan-Africa volume in Q1-18 was affected by regional conflict in Ethiopia, as well as plant shutdowns in both Tanzania and Ghana. There was a deliberate shut down of by-road shipment of cement from Nigeria to Ghana owing to the high cost involved. Exports by sea, to Ghana, will commence early in 2019.” The company said

Speaking on Non-Nigerian price increases that influenced revenue growth, the company affirmed that “There were price increases in Ethiopia (10%), South Africa (5%), and Tanzania (very marginal) during Q1-18.” It added that a bit of a price increase is still expected in Ethiopia, to fully cover the impact of last year’s currency devaluation, and that price was increased by NGN50/bag in Nigeria this month, “in reaction to inflation”.