Cement producer, Dangote Cement Plc has released its 2021 FY results reporting a profit of N364 billion during the period, representing a 32% increase Y-o-Y.
The company’s result is on the back of an inflationary year, as most businesses and their consumers have had to deal with rising cost of goods and services.
A cursory view of the result reveals the company’s profit was driven by a significant rise in the domestic and export sales in Nigeria, and its Pan Africa segment. Both segments delivered a revenue of N1.38 trillion in the full-year period compared to N1.03 trillion same period last year.
Revenue growth from sales in Nigeria alone was at 38% year on year.
Domestic sales in Nigeria for the period grew by 35%, generating N956 billion, while export sales raked in N36 billion, reflecting an improvement of 235% year on year, more than double its sales in 2020. However, domestic and export sales in Pan Africa, that is entities outside Nigeria, generated N369 billion and N28 billion, respectively. The Pan African entities also made good improvements in their revenue compared to the previous period.
Dangote Cement makes money from both domestic and export sales in Nigeria and its other entities outside Nigeria. The company also makes money from income earned from financial instruments measured at amortized costs, as well as, income from the sale of scrap, disposal of assets and sale of electricity.
The improved performance appears to be driven by higher prices triggered by inflationary pressures, for the most part of the year. As of December 2021, cement prices were around N4,500, meanwhile, average inflation for the year was 16.98%. Other drivers of revenue will be disclosed at the company’s earnings call, of which the date is yet to be announced.
Nairametrics reported the consistent increase in cement prices during the year, revealing that cement prices had increased significantly during the period, as high as 54% from N2,600 at the beginning of the year to N3,800 in April and around N4,000 at the end of the year
Earlier during the year, the company’s CEO, Michel Puchercos commented on the need for price increases, stating that although local governments have tried to push back, it was necessary due to the increase in certain expenses such as freight costs, which affects the company’s input.
Despite the growth in topline revenues, selling and distribution expenses rose much faster than inflation rate at 25% YoY. However, the company drastically reduced its expenses on Adverts and promotions by 74% compared to the prior-year period.
Dangote Cement has proposed a final dividend of N20.00 per share for FY 2021, a 25% increase compared to what was paid a year earlier, N16.00. Dangote Cement Plc last traded at N273.50 per share and has returned 6.42% from year-to-date.
