Dangote Cement Plc saw a marginal increase in its pre-tax profit in the first nine months of 2024 to N406.38 billion as high finance and production costs gulped revenues during the period.
This is according to the company’s unaudited financial statement for the period between January and September 2024 where revenues increased by 69.5% from N1.51 trillion in the first nine months of 2023 to N2.56 trillion in the period under review.
The company’s pretax profit in the period under review rose marginally by less than N2 billion to N406.38 billion from N404.89 billion in the corresponding period of 2023.
Key Highlights of the result
- Revenues- N2.56 trillion, +70%
- Production cost- N1.23 trillion, +91%
- Gross profit- N1.32 trillion, +52%
- Admin expenses- N145.6 billion, +97%
- Selling and distribution expenses- N464.7 billion, +84%
- Operating profit- N750.5 billion, +34%
- Finance cost- N451.21 billion, +137%
- Profit-Before-tax- N406.38 billion, +0.36%
- Tax expense- N127.29 billion, -0.039%
- Profit-After-Tax – N279.09 billion, +0.56%
- Earnings Per Share (EPS)- N16.55k, +2.9%
Commentary: Despite a 70% increase in revenues, the company only managed to increase profit after tax by a meagre 0.56% owing to a near doubling in production cost and more than 100% increase in finance cost.
The company’s material costs rose from N169.9 billion to N299.83 billion during the period representing a rise 76% between the first nine months of 2023 and 2024. The company also saw a whopping 109% increase in energy consumed- (fuel and power) denoting the impact of the current high energy prices across the country.
In response to the high inflationary environment, the company increased its staff salaries which is obvious with the Salaries and related staff costs doubling from N46.74 billion to N98.87 billion during the period under review.
In the period under review, the company’s finance cost was exacerbated by net foreign exchange losses amounting to N222.07 billion representing an increase of 124% between the first nine months of 2023 and the corresponding period of 2024.
Furthermore, interest expenses in the period gulped N227.67 billion representing an increase of 152.4% when compared to the same period of last year.
It is important to note that the 70% increase in revenue did not translate to any significant increase in sales volume during the period. Between January and September 2024, sales volume stood at 20.67 million tonnes marking a marginal increase of 1.92% when compared to the figure for the first nine months of 2023 at 20.28 million tonnes.
This points to the significant increase in cement prices during the period which peaked at around N12,000 per 50kg bag until the intervention of the federal government.
