Dangote Cement has reported 16.2 per cent drop in profit before tax to N155.5billion in unaudited results for the half year (H1) ended June 30, 2019 as against N185.5billion reported in H1 ended June 30, 2018.
The cement producing company struggled to grow revenue, attributable to raining season and uncertainty surrendering the 2019 general elections.
In a move to drive revenue, the company recently rolled out a promo with mouthwatering prices that comprises of 43 cars, 24 tricycles, 24 motorcycles, 550 refrigerators, 400 television sets, 300,000 Dangote foods goodies packs and recharge cards for all networks worth N200,000,000.
However, with about 50 per cent decline in tax expenses to N36.2 billion in H1 2019, the group profit after tax rose 5.4 per cent to N119.24 billion in H1 2019 from N113.16 billion reported in H1 2018.
The group in its results to the Nigerian Stock Exchange (NSE) on Monday disclosed 3.05 per cent decline in revenue to N467.73 billion in H1 2019 from N482.44 reported in H1 2018.
In the same period, finance cost dropped by nine per cent to N19.6 billion as against N21.53billion reported in H1 2018.
The Group Chief Executive Officer, Dangote Cement, Joe Makoju in a statement for the first quarter period ended May 30, 2019 said, “It was a challenging quarter with delays to the Nigerian elections that impacted sales, increased discounting in Nigeria and tougher market conditions in South Africa and other Pan-African markets.
“In addition, our variable costs were hit by foreign exchange effects, as well as higher fuel and distribution costs. Unrealized foreign exchange losses driven by the variation of local currencies versus US Dollar also impacted negatively our financial results.
Combined with the muted volume growth across our operations, all of these factors contributed to a slight fall in revenues and a larger impact on profitability.
“We are optimistic that the Nigerian market will accelerate when the government and private enterprise focus on infrastructure and economic development and we have taken steps to protect our margins by introducing a price increase at the beginning of April.
He expressed that, “This financial strength is what enables us to maintain our position as Africa’s leading cement company, despite the challenging conditions we have seen so far in 2019.”
Dangote Cement is Africa’s leading cement producer with nearly 46Mta capacity across Africa. A fully integrated quarry-to-customer producer, we have a production capacity of 29.25Mta in our home market, Nigeria.
The Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines; our Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and our Gboko plant in Benue state has 4Mta. Through our recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighbouring countries.
In addition, we have operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).