Dangote Cement Plc released its Q3 2021 unaudited financial result revealing growth in the top and bottom lines despite a decline in production levels.
This is contained in the recently released Q3 2021 financial statement on the website of the Nigerian Exchange Group (NGX).
Revenue for the period appreciated by 16.53% YoY in Q3 2021 from N284.59 billion in the corresponding period of 2020 to N331.64 billion. This resulted in an aggregate revenue of N1.02 trillion for the 9-months of this year.
- Gross Profit for the period grew by 20.59% from N169.47 billion recorded in the previous year to N204.37 billion in the period under review.
- Other Income surged by 66.62% from N698 billion in Q3 2020 to N1.16 billion in the period under review.
- Pre-Tax Profit increased by 13.86% from N109.11 billion in the previous year to N124.23 billion in the current period.
- As of the end of the review period, the company’s total assets were valued at N2.25 trillion, reflecting an increase of N227.79 billion year-to-date.
- In addition, shareholders’ equity recorded an increase of N14.25 billion YTD to stand at N905.22 billion.
What this means
Taking a look at the company’s production volume for cement and clinker during the period, we see a decline in production levels quarter on quarter. The production of cement and clinker for the period stood at 6.56 million tonnes, declining YoY by 158,000 tonnes, compared to the volume produced in Q3 2020.
In the same vein, further analyses reveal that quarter-on-quarter volume also depreciated by 1.24 million tonnes from 7.80 million tonnes produced in Q2 2021 to N6.56 million tonnes in Q3 2021.
While production levels for the period declined, there was an increase in gross earnings which suggests that revenue growth could be due to the increase in the price of cement during the period under review.
Recall that reports of cement price increment were recorded in August from N2,700 earlier in the year, to around N3,500 as of August. The price of cement further increased to N3,800 at the end of September and N4,000 in mid-October. Cement retailers attributed the increase in price to the scarcity of the product around several parts of the country.
Considering that production cost of sales grew during the period by 10.56% despite a decline in production volume, there is a strong indication that the cost of raw materials also increased in the review period.
What you should know
Dangote Cement Plc has a book value per share of N53.12, a price to book value of 5.27x and a P/E ratio of 55.78x.
Dangote Cement Plc is currently trading at N280.00 per share and its market capitalization stands at N4.77 trillion as at Thursday, October 29, 2021. Year-to-date performance shows that the share price of the company has gained 14.33%.