Dangote Cement Plc is seeking to raise N50 billion in additional short-term debt capital as the Sub-Saharan Africa’s largest cement group is leveraging its top-notch rating to deepen balance sheet and drive overall growth.
Dangote Cement, Nigeria’s most capitalised quoted company, is offering Series 15 and 16 under its N150 billion commercial paper (CP) issuance programme. Application lists for the two offers close today. Dangote Cement plans to raise N50 billion across the two series.
Dangote Cement is offering 175-day CP with effective yield of 5.0000 per cent and a discount rate of 4.8833 per cent under its 15th series. The 16th series CP is a 266-day instrument with effective and discount yield of 6.0000 per cent and 5.7492 per cent.
Minimum subscription for the two offers was N5 million and thereafter in multiples of N1,000. The CPs, which are not subjected to withholding taxes, would be allotted today, after the closure of the application list.
With an installed capacity of 45.6 metric tonnes across its operations in 10 African countries, Dangote Cement is assigned AA+ long-term rating by GCR and Aa2.ng long-term rating by Moody’s. It is one of the few companies in Nigeria with a rating of AA+.
Dangote Cement had last month successfully launched its debut bond issuance, a N100 billion bond. The debut bond was the first series under the company’s N300 billion shelf bond issuance programme.
The Dangote Cement’s N100 billion Series 1 five-year Fixed Rate Senior Unsecured Bonds would pay fixed coupon twice a year.
Dangote Cement stated that it would use the net proceeds of the bond to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.
Dangote Cement will be distributing N272.6 billion to shareholders as cash dividend for the 2019 business year. At its forthcoming annual general meeting, shareholders are expected to approve a board recommendation to distribute a dividend per share of N16. The dividend will become payable on June 16, 2020 to shareholders on the register of the company as at the close of business on May 25.
Key extracts of the audited report and accounts for the year ended December 31, 2019 showed that turnover dropped from N901.21 billion in 2018 to N891.67 billion in 2019. Gross profit also declined marginally from N517.90 billion to N511.68 billion. Profit before tax stood at N250.48 billion in 2019 as against N300.81 billion in 2018 while profit after tax dropped from N390.33 billion to N200.52 billion.
The report, meanwhile, indicated that the group’s investments across Africa have started yielding desired results as Pan-African sales volume grew in the year 2019, hitting 9.6 Mt from 9.4 Mt. Dangote Cement Plant, Mtwara, Tanzania, recorded an increase of 94 percent increase in volume within the review period. Dangote Cement Plant, Pout, Senegal put up a remarkable performance with sales up more than 100 percent of rated capacity.
Dangote Cement is Africa’s leading cement producer with nearly 46Mta capacity across Africa. It is a fully integrated quarry-to-customer producer, with a production capacity of 29.25Mta in its home market, Nigeria. Obajana plant in Kogi State, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines; Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and Gboko plant in Benue state has 4Mta.
In addition, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), and Zambia (1.5Mta).