By OBINNA EZUGWU
For most manufacturing companies, 2020, was a tough year. Many companies afflicted by the impact of the Covid-19 pandemic, not a few incurred heavy losses in the operations. But for Africa’s leading top cement maker, Dangote Cement, 2020 proved to be yet another profitable year.
On Tuesday last week, the company released its 2020 annual report, and it came with impressive numbers. Sales surged to 15.9Mt for the full year, compared with 14.1Mt in 2019. This included both cement and clinker sales, which implies a 12.9 per cent growth for the full year 2020.
But Nigerian operations alone sold 15.6Mt, up by 14.3 per cent year on year and resulting in an increase in market share. The company’s total sales came to N1.034 trillion, N142.525 billion higher than 2019 figures. Profit before tax rose by 49 per cent, from N250.479 billion to N373.310 billion.
Profit for the year advanced from N200.521 billion to N276.068 billion, translating to a 37.7 per cent jump. That lifted earnings per share from N11.79 to N16.14. Earnings were limited by a N188 million provision for impaired asset as well as a surge in income tax expense from N49.958 billion to N97.242 billion, implying a 94.6 per cent growth.
Shareholders fund dipped 0.8 per cent from N897.937 billion to N890.970 billion, following Dangote Cements buyback of 40.2 million units of its shares in December at the cost of N9.8 billion. Revenues for the Nigerian operations increased by 18 per cent to N720 billion, owing to demands in the domestic market.
The company said 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. It posted strong earnings before interest, taxes, depreciation and amortization (EBITDA) of N421.4 indicating a margin of 59 per cent.
The company also posted a record high Pan-African EBITDA of N71.3 billion, which went up by 49.0 per cent. Within the period under review, the cement group commissioned its gas power plant in Tanzania. The report equally showed that the company will pay a tax charge of N97 billion during the period in review over the sum of N50 billion recorded in 2019.
Meanwhile, the companys board on Friday proposed a N16 per share dividend totaling N272.648 billion for shareholders for 2020, the same amount it has paid shareholders every year in the past three years.
In his remarks, the Chief Executive Officer, Dangote Cement Plc, Michel Puchercos, 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 whilst 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 N276.1 billion. I am delighted to report that Dangote Cement experienced its strongest year in terms of EBITDA and strongest year in terms of volumes. In spite of a challenging environment, Group volumes for the year were up 8.6 per cent and Group EBITDA was up 20.9%.
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 Cements 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.
Dangote Cement Plc is sub-Saharan Africas 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.
Dangote Cement has a long-term credit rating of AA+ by GCR and Aa2.ng by Moodys due to its market leading position, significant operational scale and strong financial profile evidenced by the companys 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 Ltd, 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.