Dangote Cement Declares N126bn Profit in Six Months

By Dipo Olowookere

In the first six months of 2020, Dangote Cement recorded a profit after tax of N126.1 billion compared with the N119.2 billion achieved in the first six months of 2019.

The net profit was made after a tax deduction of N36.7 billion in the period under review in contrast to the N36.3 billion paid in the corresponding period of last year.

According to the financial statements of the company released on Friday to the Nigerian Stock Exchange (NSE), the earnings per share of Dangote Cement in H1 2020 increased to N7.45 from N7.01 of H1 2019.

An analysis of the top line of the results showed that in the first half of this year, the revenue generated by the cement giant grew to N476.9 billion from N467.7 billion in the first half of last year.

The revenue was mainly from the sales of cement and clinker, which accounted for N476.8 billion, higher than the N467.6 billion of last year.

In the results also, the board of Dangote Cement said the production cost of sales increased to N202.4 billion from N193.2 billion especially due to higher amount spent on the material consumed to produce the bags of cement as well as the fuel and power used.

Business Post observed that another factor responsible for the higher production costs despite a reduction in the plant maintenance expenses in the period was the N7.3 billion gulped by other production expenses. In H1 2019, the sum of N2.5 billion was used for the same purpose.

A further analysis of the financial statements showed that administrative expenses gulped N26.1 billion in the period under consideration in contrast to N25.0 billion of the comparative period and this was because of the higher management fee of N2.6 billion versus N2.0 billion of last year as well as the salaries and related staff costs which increased to N7.0 billion from N6.3 billion.

However, in the first half of this year, the selling and distribution costs were pruned to N77.6 billion from N80.3 billion as a result of lower amount paid for haulage expenses, though the amount used for advertisements and promotion rose to N5.3 billion from N3.1 billion.

In H1 2020, Dangote Cement said it had N173.5 billion as profit from operating activities, higher than N170.5 billion in H1 2019, while finance income from interest grew to N5.2 billion from N4.6 billion, with the finance costs rising to N20.9 billion from N19.6 billion due to higher interest expenses.