By Chinwendu Obienyi
Leading cement manufacturer, Dangote Cement Plc (DCP) recently declared in its audited financial statement for the financial year of 2020, a record high revenue of N1.03 trillion, making it the second Nigerian listed entity after MTN to surpass the N1 trillion mark.
This came as its share price also grew by 2.3 per cent to close Wednesday’s transactions on the Nigerian Stock Exchange (NSE) at N225.
The company’s aggregate revenue grew by 16 per cent year-on-year ( y/y) to N1.03 trillion in 2020 as against N891 billion recorded in 2019 and this was driven by revenue improvement from its Nigerian operations (+18.0 per cent y/y) and Pan African operations (+12.7 per cent y/y). The strong top-line growth was supported by strong cement demand, driven by the strong appetite for real estate investment and the recovery of infrastructure spending – including more concrete roads. On Pan African Operations, the translation impact arising from the Nigerian naira’s devaluation was the primary catalyst behind the top-line expansion of 12.7 per cent y/y, as sales volumes rose by 4.4 per cent y/y to 9.9 million metric tonnes.
Further analysis of the company’s performance showed that its profit before tax (PBT) grew by 49 per cent y/y to N373 billion in 2020 as against N250.47 billion with related PBT margin improving by 8.0ppts to 36 per cent, on the back of the moderation in net finance cost and gains from cost management while its profit after tax (PAT)
DCP experienced its strongest year in terms of volumes and EBITDA, as the Group’s Earnings Before Interest, Taxation, Depreciation, and Amortisation increased by 20.9 per cent to N478.1 billion, despite a challenging environment even as its PAT rose by 37.7 per cent y/y to N276.07 billion in 2020 while Earnings Per Share (EPS) grew by 36.9 per cent y/y to N16.14.
On a geographical basis, Nigeria’s EBITDA margin weakened by 0.7ppts to 58.5 per cent due to the pass-through effect of the local currency’s devaluation on dollar-linked cost items.
