Dangote Cement pays N97bn tax as Nigerian operations pull N720bn revenue
Dangote Cement pays N97bn tax as Nigerian operation pulls N720bn revenue
Africa’s largest cement producer, Dangote Cement Plc, has remained a major contributor to the Nigerian economy, with a tax charge of N97 billion for the financial year ended December 31, 2020, even as it proposed a dividend of N16 per share.
According to the company’s audited results released on the floor of the Nigerian Stock Exchange (NSE), the tax charge represents an increase of 95 per cent over the N50 billion recorded in 2019.
Its Nigerian operations during the period sold 15.9Mt compared to the 14.1Mt figure for 2019. This includes both cement and clinker sales, representing a 12.9 per cent growth for the whole 2020.
Considering the domestic sales alone, Nigerian operations sold 15.6Mt, up by 14.3 per cent year on year, and resulting in an increase in market share.
Revenues for the Nigerian operations increased by 18 per cent to N720 billion, owing to demand in the domestic market.
The volume growth was enhanced by a successful innovative national consumer promotion, “Bag of Goodies – Season 2” and lower rains in the third quarter compared to the previous year.
The cement group also posted a record high Pan-African EBITDA of N71.3 billion, which went up by 49. Per cent. Within the period under review, the company commissioned its gas power plant in Tanzania. Group earnings per share was up by 36.9 per cent to ₦16.14k.
Dangote Cement recorded strong performance not only at the top line but also at the bottom line, owing to cost-saving measures. Despite inflationary pressures and foreign exchange volatility, disciplined cost control measures enabled the company to maintain a relatively flat cash cost per tonne. The cost control measures include improved plant efficiency, better fuel mix and general overhead optimisation
The Chief Executive Officer, Michel Puchercos, in his comments on the results, said: “2020 was a good year for Dangote Cement across board. Several firsts made 2020 a productive year such as our maiden clinker shipment, maiden bond issuance and successful buyback programme. We increased our capacity by 3Mt in Nigeria, commissioned our two export terminals and commissioned our gas power plant in Tanzania. All these were achieved while we focused on protecting our people, customers and communities from the impact of the pandemic.”
“Dangote Cement recorded strong top-line growth supported by strong cement demand. Profitability was further bolstered by our disciplined cost control measures in what we believed to have been a highly inflationary and volatile year. These measures resulted in a 37.7 per cent increase in profit after tax to ₦276.1 billion.”
He continued: “I am delighted to report that Dangote Cement experienced its strongest year in terms of EBITDA and strongest year in terms of volumes. Despite a challenging environment, Group volumes for the year were up 8.6 per cent and Group EBITDA was up 20.9 per cent.
“Looking ahead, we have strengthened our Alternative Fuel initiative which focuses on leveraging the circular economy business model and reducing exposure of our cost base to foreign currencies fluctuations. We continue to embed Dangote Cement’s seven sustainability pillars into every aspect of our operation and culture.
“We remain committed to keeping safe our staff and communities by being fully compliant with health and safety measures in all our territories of operation. We are focused on adapting to the rapidly evolving markets in which we operate.”
The company is sub-Saharan Africa’s largest cement producer with an installed capacity of 45.6Mta across 10 African countries and operates a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales and distribution of cement.
It has a long-term credit rating of AA+ by GCR and Aa2.ng by Moody’s due to its market leading position, significant operational scale and strong financial profile evidenced by the company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, satisfactory cash flow and low leverage.
Dangote Cement is a subsidiary of Dangote Industries Limited, a diversified and fully integrated conglomerate as well as a leading brand across Africa in businesses such as cement, sugar, salt, beverages, and real estate, with new multi-billion dollar projects underway in the oil and gas, petrochemical, fertiliser and agricultural sectors.