Dangote Cement Reports Drop Q1 Revenues For The First Time In Five Years

Dangote Cement, the largest cement company in Africa, has reported a decrease in revenue for the first quarter of 2023, with N280.3 billion compared to N321.9 billion during the same period in 2022. This is the first time in five years that the company has experienced lower revenue, illustrating the impact of government policies on businesses.

In the past, Dangote Cement has seen consistent revenue growth due to construction and infrastructure spending. However, the cash crunch and election uncertainty have slowed infrastructure investments.

The cash crunch in Nigeria and the uncertainty surrounding general elections led to a slowdown in private and public infrastructure investments. As a result, the company’s Nigerian operations experienced a drop in volume, leading to a 13.5% decline in group volume.

Dangote Cement’s Nigerian operations sold 3.6 million tons of cement in the first quarter of 2023, a 24.6% decrease from the 4.8 million tons sold in the same period in 2022. The Nigerian market accounted for 58% of group volumes shipped, compared to 66.7% in 2022.

The company also cited the cash crunch and negative sentiments around elections as reasons for the decline in volume. The cash shortage affected construction workers’ daily wages and retailers’ ability to pay for cement in cash.

Despite these challenges, Dangote Cement reported a profit after tax of N109.5 billion, up from N105.98 billion a year earlier. Lower tax charges helped the company’s profit in 2023 compared to 2022.

Arvind Pathak, the CEO of Dangote Cement, commented on the results and the company’s plans. He said they are progressing with their growth priorities, such as deploying grinding plants in Ghana and Cote d’Ivoire and increasing local production capacity in Nigeria.

Dangote Cement believes there are still opportunities for cement demand in the Nigerian market. It is working to increase local capacity from 35.25 million tons per year to 41.25 million tons per year.

The company’s share price closed flat at N270 per share for the week ending April 28, 2023.