Dangote Cement posts N208bn operating profit for ‘great’ 2015

Dangote Cement says its operating profits from all its factories across Africa for the 2015 fiscal year stood at 207.8 billion in 2015.

The company also explained that its operating profits in the Nigerian operations increased by 1.5 percent to N193.7 billion, despite the fall in operating margin from 51.4 percent in 2014 to 49.8 percent in 2015.

In a statement by Onne van der Weijde, CEO Dangote Cement, the company said its new factories performed successfully, increasing sales.

“We had a great year in 2015 with volumes increasing 35% as new factories performed very successfully across Africa, gaining significant market share against long-established incumbents,” the statement read.

“In our home market of Nigeria, we increased sales by 3.2% against the worst economic crisis the country has faced in many years, which demonstrates that the Nigerian market is very robust.

“The price reduction we announced in September was clearly very well-received in the market and fourth quarter sales were 36% ahead of the same period in 2014.

“We’ve succeeded in new markets, proved that our business model works throughout Africa and we’ve created a strong foundation for the next wave of expansion in Africa’s exciting growth markets and beyond. We have had a very strong start to 2016 and are well on the way to becoming a global leader in cement.”

The company lost and also benefitted from the depreciation of the Nigerian naira and the current exchange rate regime.

“Manufacturing costs of goods sold in Nigeria increased by 1.4%, driven mainly by depreciation charge associated with the opening of new factories … and the fall in the value of  the naira against the US Dollar, because a significant portion of manufacturing costs are denominated in US dollars.

“The Nigerian naira fell in value, resulting in high exchange gains from assets denominated in foreign currency and losses from liabilities denominated in foreign currencies, including gains from inter-Group assets and liabilities that do not eliminate in full on consolidation.

“The profit before tax was ₦188.3bn, compared with ₦184.7bn in 2014, which is an increase of 2.0%,” with directors recommending a dividend of N8.0 per share, resulting in “a total dividend payment of ₦136.3bn to be paid in April 2016”.

Dangote Cement has operations in Senegal (1.5Mta), South Africa (2.7Mta), Cameroon (1.5Mta), Ghana (1Mta import facility), Ethiopia (2.5Mta), Zambia (1.5Mta) and Tanzania (3.0Mta).

The company is also working on building plants in, Republic of Congo (1.5Mta), Kenya (3.0Mta), Nepal (3.0Mta) and Zimbabwe (TBC), with additional capacity planned in Senegal, Cameroon, Ethiopia and Zambia.

There are also plans to build import or grinding facilities in Sierra Leone (0.7Mta), Ghana (1.5Mta), Cote D’Ivoire (3.0Mta), and Liberia (0.7Mta).