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Dangote Cement records N158bn profit, declares N6 dividend

By BusinessNews Staff on March 28, 2015

Dangote Cement Plc on Thursday reported a profit after tax (PAT) of N159.5 billion for the year ended December 31, 2014, down by about 20 per cent compared with N201.2 billion posted I 2013.

Executive Director, Dangote Group, who oversaw operations of the cement unit until recently, Mr. Devakumar Edwin, was quoted byBloomberg as saying in a statement that performance was affected by erratic fuel supply and prolonged rainy season.

“Despite the challenging conditions of the erratic fuel supply and prolonged rainy season that affected revenues and profitability in Nigeria, the company is confident about the future,” Edwin said.

However, an analysis of the results show that other factors such as high finance charges and other operational expenses.

Dangote Cement ended 2014 with a revenue of N392 billion up from N386 billion in 2013. Gross profit stood atN248.6 billion, compared with N255.7 billion in 2013.

Administrative expenses rose from N25.9 billion to N274 billion, while sales/distribution expenses increased from 35.6 billion to N37.4 billion. Finance cost soared by 140 per cent from N13.7 billion to N32.9 billion. Profit before tax stood at N184.7 billion, compared with N191 billion.

But the company paid an income tax of N25.2 billion in 2014, as against a tax credit of N10.5 billion 2013. The N25 billion tax charge resulted from the expirations of the tax exemptions on some lines of the company’s business.
Consequently, the company ended the year a PAT of N159.5 billion, compared with N201 billion in 2013.

Based on the performance, the directors have recommended a dividend of N6.00 per share, which translates to a yield of 3.9 per cent and pay out ratio of 63.5 per cent.

Dangote Cement, controlled by billionaire Chairman Aliko Dangote, is expanding in new African countries to tap demand for building materials as governments invest in infrastructure. The company plans to raise capacity to as much as 60 million metric tons by 2016 from 29 million tons.

Meanwhile, the Nigerian stock market maintained its bullish trend as the NSE All Share Index (ASI) gained 0.6 per cent close at 30,067.90 driven by gains sustained in large cap stocks such as Nigerian Breweries Plc, Guaranty Trust Bank Plc and Zenith Bank Plc. Similarly, market capitalisation added N59.4 billion to close N10 trillion.

At the close of market, the Oil & Gas and Banking Indices continued their positive outing appreciating 2.0 per cent and 1.0 per cent respectively. Also, the Consumer Goods index returned 2.3 per cent on the back of increased appetite for Unilever Nigeria Plc. The renewed demand for Unilever Nigeria could be linked to the plans by parent firm,Unilever Overseas Holdings B.V, to increase its stake in the Nigerian unit from 50.05 per cent to 75 per cent.

[ThisDay]

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