Heavy rains and uncertainties in Nigeria’s political landscape in 2018 were not enough threats to improved profitability for Dangote Cement, a leading cement manufacturing group in Africa, as consumption in the country boosted its revenue to about N901billion. The sterling performance ostensibly accounted for 0.5 per cent of Nigeria’s GDP in the review year. Bamidele Famoofo reports

Manufacturing Sector

The manufacturing sector of the economy was one out of four major sectors in the non-oil sector that helped Nigeria’s Gross Domestic Product (GDP) grow by 2.38 percent in real terms (year-on-year) in the fourth quarter of 2018, according to figures from the Nigeria Bureau of Statistics (NBS).


The statistics bureau noted that nominal GDP growth for the manufacturing sector was recorded at 33.57 per cent, which is 24.37 percentage points higher than the rate recorded in the corresponding period of 2017 (9.20 per cent), but only 0.84 percentage points higher than the preceding quarter’s (32.73 per cent). Quarter on quarter, growth of the sector stood at 6.62per cent, while annual growth was 24 per cent in 2018. The contribution of manufacturing to nominal GDP in Q4 2018 was 10.11per cent, which is higher than its contribution in the corresponding period of 2017 (8.53 per cent) and Q3 2018 (10.01 per cent). For 2018, the sector contributed 9.75 per cent to total nominal GDP, higher than its contribution, of 8.83 percent in 2017.

The growth represents an increase of 0.27per cent points when compared to the fourth quarter of 2017, which recorded a growth rate of 2.11 percent. It also indicates a rise of 0.55 percentage points when compared with the growth rate recorded in third quarter 2018. On a quarter-on-quarter basis, real GDP growth was 5.31percent.

The fourth quarter growth performance implies that real GDP grew at an annual growth rate of 1.93per cent in 2018, compared to 0.82 per cent recorded in 2017, an increase of 1.09percentage points.

During the quarter, aggregate nominal GDP stood at N35.230 trillion, which is higher than N31.275 trillion recorded in Q4 2017, a nominal growth rate of 12.65 per cent. For 2018, nominal GDP was therefore recorded at N127.762 trillion representing a nominal growth rate of 12.36percent when compared to N113.711trillion recorded in 2017.

The manufacturing sector comprises of 13 activities: Oil Refining; Cement; Food, Beverages and Tobacco; Textile, Apparel, and Footwear; Wood and Wood products; Pulp Paper and Paper products; Chemical and Pharmaceutical products; Non-metallic Products, Plastic and Rubber products; Electrical and Electronic, Basic Metal and Iron and Steel; Motor Vehicles and Assembly; and Other Manufacturing.

Dangote Cement

While the improved contribution of non-oil sector and by extension the manufacturing subsector to GDP growth have been applauded by economic pundits, the impact of Dangote Cement in the revival of the near comatose manufacturing space in Nigeria cannot be ignored.

Ostensibly, Dangote Cement, largest capitalised company on the Nigerian Stock Exchange with a market capitalisation of about N3.4trillion was a major contributor to growth in GDP in 2018 with record revenue of N901billion in its financial year ended December 31, 2018.

The ever expanding Dangote Cement Group with established manufacturing plants across major countries in Africa grew total revenue by 11.9 percent from N805.58billion in December 31, 2017 to N901billion in 2018.

Going by the details in the group’s audited financial records for 2018, revenue was largely driven by the Nigerian market where revenue grew by 11.9 percent from N552.36billion in 2017 to N618.30billion. The implication is that consumption of cement in Nigeria in the review year increased by 11.9 percent or about N66billion.

Dangote Cement accounted for 0.5 percent of nominal GDP in 2018 considering the N618.30billion total revenue generated from the local market in comparison to an aggregate nominal GDP of N127.76trillion recorded by Africa’s largest economy in 2018.

Financials

Dangote Cement Plc, Africa’s largest cement producer, announces a group’s revenue of N901.2billion as at December 31, 2018, which represents an increase of 11.9 percent compared to N805.52billion in the corresponding period of 2017.

Group’s earnings before Interest, taxes, depreciation, and amortisation (EBITDA), (used as an indicator of the overall profitability of a business), moved up 12.1 per cent to N435.3billion from N388.15billion in the preceding financial year.

Details of the report indicated that Nigeria EBITDA increased by 10.2 percent from N360.76billion in 2017 to N397.40billion in 2018, while margin also increased by 64.3 percent. Pan-Africa EBITDA surged by 28.2 percent from N38.28billion in 2017 to N49.1billion while margin growth was put at 17.3 percent in 2018.

Dangote Cement explained that the increase in EBITDA was helped by the more favourable fuel mix at Obajana and Ibese, both of which were able to use coal from mines operated by its parent, Dangote Industries Limited.

“The use of expensive LPFO has been eliminated and our reliance on imported coal has ended at Obajana and Ibese, where we are using own-mined and third-party Nigerian coal, with obvious benefits to both margins and foreign currency demands. All of our eight kilns at Obajana and Ibese are now capable running on coal, gas or LPFO, or a mixture of the three. Our two lines at Gboko run on coal or LPFO or a mixture of the two”, the leading cement company in Africa revealed.

Further breakdown of the audited 2018 financial figures showed that earnings per share (EPS) of the cement group went up by 95.9 per cent to N22.83. To reward its shareholders across board, Dangote Cement has proposed a dividend of N16.00 per share which represents a growth of 52.4per cent compared to the dividend paid in 2017.

Speaking on the performance, Group Chief Executive Officer, Joseph Makoju, said: “This is a record financial performance by Dangote Cement, driven by a strong increase in our home market, Nigeria, despite heavy rains and uncertainties about the election. Although Pan-African volumes were unchanged in 2018, I am confident that we will see an increase in 2019, driven by higher volumes in Tanzania, Ethiopia, Congo and Sierra Leone. Now that we have gas turbines operating in Tanzania we will also see increased profitability in the Pan-Africa region and this will help to improve overall Group margins.”

Operating Highlights

Dangote Group revenue was driven by sales volumes which went up by 7.4 per cent to 23.5 metric tonnes (Mt) in 2018 driven largely by the Nigerian operations, which increased volumes by 11.4 percent to 14.2Mt in 2018, including export sales of 0.7Mt. Domestic sales in Nigeria were 13.4Mt, compared to 12.0Mt in 2017, because of higher building activity as the economy recovered from recession.

“In Nigeria, our 13.3Mta Obajana plant sold 6.7Mt of cement in 2017, with the 12.0Mta Ibese plant also selling nearly 6.7Mt. Our 4.0Mta plant at Gboko, in Benue State, was mothballed for most of the year but sold more than 0.8Mt,” the group remarked.

Meanwhile, group manufacturing costs increased by 9.1percent, mostly as a result of increased volumes in Nigeria. Manufacturing costs in Nigeria increased by 7.4per cent from N158.6billion to N170.3billion, on the back of the 11.4 per cent increase in sales volume for 2018.

Although Pan-African volumes remained constant, manufacturing costs increased by 10.6 per cent from N192.7billion to N213.0billion, mainly due to exchange rate impacts as well as input price adjustments.

The naira traded at N359/$1 at the end of 2018 compared to N331/$1 at the end of 2017, a decline in value of 7.8percent. The depreciation also contributed to the overall increase in Pan-African operating costs when these were converted to naira. The average exchange rate and year-end exchange rate for the main currencies applied are as shown in the notes to the financial statements.

Besides, total administration and selling costs rose by 22.0 per cent to N189.4billion, mostly as a result of higher sales and associated distribution costs in Nigeria, which also include increased export sales from the country whose delivery costs are higher. Haulage expenses in Nigeria increased by N10.2billion to N56.7billion from N46.5billion. Haulage costs in Pan-Africa increased by N3.2billion, representing 11.3per cent increase.

Changes

Mr. Olusegun Olusanya resigned from the board after being with Dangote Cement for about 15 years. Another major change on the board in the financial year ended December 31, 2018 was the resignation of the Group Chief Financial Officer and Board member, Brian Egan. The Irish finally quit the organisation on February 28, 2019 after five years with Dangote Cement.

In the interim, Guillaume Moyen, who recently joined Dangote Cement as Group Chief Finance Officer (Operations) will be Acting Group Chief Financial Officer from March 1, 2019.

Outlook

Dangote Cement believes the year 2019 has started well with sales volumes in Nigeria more than 10 per cent ahead of last year in ongoing first quarter. It is also hinging its hope on federal government’s commitment to a strong programme of infrastructure investment and incentivisation that will drive increased road building, including the construction of concrete roads for better performance in 2019.

https://www.akelicious.net/2019/03/dangote-cements-12-revenue-growth-lifts.html

Arewa news

good.

Ok

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[img]https://media./images/ecfd996f6b6c9ef5ff660a196c5bacf7/tenor.gif[/img]

If only Nigeria progressed on GEJ's antecedents, by now we may have been looking at a reasonable GDP figure and not 0.5% from a whole construction industry which majorly accounts for our growth on infrastructure.

- Just maybe we would have been getting ready to initiate online voting for 2023.. now it seems like we have retrogressed to 2007.

This is a perfect rubbish.

Makes sense

I already know naija's hope is with dangote...

Hence i wrotethe peice.." how dangote will save nigeria"..

You can google it!

Nice one from a Nigerian grown brand

This is not true joor. Is it not the igbos that are the bed rock of Nigeria economy?

Weird!!! Story of a young lady who went on a weekend rendezvous with Arab dudes only to be urinated and pooed on during intercourse
https://www.9jagem.net/2019/03/weird-story-of-young-lady-who-went-on.html

@ceojay9

dangocheat cement nigeria plc,sell 50kg at #800 in ghana and sell same quantity in nigeria at #2500

That's good

Ikpongiton:
dangocheat cement nigeria plc,sell 50kg at #800 in ghana and sell same quantity in nigeria at #2500

Stop this lies

cool
thank goodness dangote Is hausa.

i just cant imagine the man being igbo.

the amount of chest pounding that would have been coming from his kinsmen would have made everyone hate him. they will be telling us how they are at the center of nigeria's economy and how other tribes are lazy. how the economy will tank without them.

just like everyone wants Innoson to succeed but his useless people had to turn everyone against him

mrvitalis:

Stop this lies

lies prospers nobody,but a call to somebody in ghana or cameroon will open your eyes

Ikpongiton:
dangocheat cement nigeria plc,sell 50kg at #800 in ghana and sell same quantity in nigeria at #2500

Then build your own cement industry, and sell yours 20 naira

*.

Houstency:


What do you stand to gain from all these needless rantings my brother?

Let's learn to shun these baseless ethnic attacks, so we attend to issues the way it is meant to be and not spicing it up with ethnic colouration.

N.B: I'm a Nigerian from the middlebelt!

is there a lie in what i wrote?

bibiking7:




Can't wait for his refinery to also be completed. So we can stop or reduce fuel importation and be free from marketers and Forex palaver.

he will sell fuel at #200 per litre,mark my words

Dangote is a God sent.

Ikpongiton:
lies prospers nobody,but a call to somebody in ghana or cameroon will open your eyes

Stop lying.
It's GHc 28 which is almost N2000.

Ikpongiton:
he will sell fuel at #200 per litre,mark my words

till then sha

Esseite:
If only Nigeria progressed on GEJ's antecedents, by now we may have been looking at a reasonable GDP figure and not 0.5% from a whole construction industry [s]which majorly accounts for our growth on infrastructure.[/s]

- [s]Just maybe we would have been getting ready to initiate online voting for 2023.. now it seems like we have retrogressed to 2007.[/s]

Your enthusiasm to deceive the gullible is demonic.

GEJ led us into NEGATIVE GDP GROWTH for consecutive quarters which was what led us into a recession in 2015. Fact.

The manufacturing sector of the economy was one out of four major sectors in the non-oil sector that helped Nigeria’s Gross Domestic Product (GDP) grow by 2.38 percent in real terms (year-on-year) in the fourth quarter of 2018, according to figures from the Nigeria Bureau of Statistics (NBS).

He, Dasuki, Diezani and co looted our commonwealth instead of diversifying the economy from the surplus oil money we were receiving before the price crashed and destroyed our economy like Venezuela (which Venezuela have still not recovered from due to lack of a leader like Buhari).

Now the beauty of Buhari's diversification of the economy is starting to show with NON OIL sector again showing an increased contribution to our GDP boosting economic growth by 2.38%, and your brain is suddenly doing backflips talking about online voting. Well Done PMB.

I know you know these things but deliberately choose to deceive the uninformed but your conscience will surely judge you and my joy is that you will continue to live to wail as you experience the torture of President Buhari's good governance .

Ikpongiton:
dangocheat cement nigeria plc,sell 50kg at #800 in ghana and sell same quantity in nigeria at #2500

Ghana doesn't use naira... They use cedis, which is far more valuable than naira.
800cedis is worth more than or approximately equal to 2250naira.

Dangote should drop cement price, he is exploitative. A bag of cement should be NGN1,200 max.
Getting rich at our expense is non purgatory

Esseite:
If only Nigeria progressed on GEJ's antecedents, by now we may have been looking at a reasonable GDP figure and not 0.5% from a whole construction industry which majorly accounts for our growth on infrastructure.

- Just maybe we would have been getting ready to initiate online voting for 2023.. now it seems like we have retrogressed to 2007.

If you had read well, you would have seen that the GDP grew by 2.38% and that the manufacturing sector contributed 0.5%. And by the way, we have several otgr sectors such as services, agriculture and oil all contributing their own quota. I hope you also read over 30% improvement over 2017 figures.

gentlegenius:

Ghana doesn't use naira... They use cedis, which is far more valuable than naira.
800cedis is worth more than or approximately equal to 2250naira.

Ghana devalued its currency to arrive at that level. But when it is critically looked at, the gains have been eroded by the loss in value after devaluation. Check history and all indices well before commenting on economic issues.