Economy
Dangote Cement Ramps up Production to Meet Rising Demand
**Pays N40.4bn Tax to Government
By Dipo Olowookere
Nigeria’s treasury is expected to receive a boost with the expected payment of N40.4 billion in corporate tax by a leading cement firm in the country, Dangote Cement Plc.
The tax is from the operational result of the cement marker in the first quarter of 2021, according to details of its financial statements released to the Nigerian Exchange (NGX) Limited on Friday, April 30, 2021.
The country is currently undergoing a decline in earnings and the payment of over N40 billion into the coffers of the government would go a long way to benefit the citizens.
Dangote Cement is one of the most responsible corporate citizens of the country as well as one of the biggest private-sector taxpayers. At the moment, it pays over N240 million daily as Value Added Tax (VAT) to the government.
As part of the company’s corporate social responsibility, in line with the government’s quest to boost infrastructural development in the country, Dangote Cement opted to provide funding for the constructions of major roads in Lagos and Kogi States.
The roads are the critical Lagos Apapa Port road leading to the old toll gate and the Lokoja-Obajana-Kabba road straddling Kogi and Kwara states.
A review of the Q1 results of the firm showed that the N40.4 billion tax it paid in the period under review was 47.3 per cent higher than the N27.42 billion paid in the corresponding period of the 2020 financial year.
In order to meet increased demand for its products, Dangote Cement has ramped up production capacity in the Obajana Line 5 and resumed production at the Gboko plant.
During the first three months of the year, the firm also increased the total volume of cement sold from its Nigerian operations to 4.9Mt compared to the 4.0Mt sold in the first quarter of 2020.
Pan-African operations sold 2.6Mt of cement in the period under review compared to 2.3Mt sold in the corresponding period in 2020.
The cement maker said it’s making efforts to start the Okpella Plant before the end of June in order to meet the increasing demand for cement in the country and help to moderate prices in the market.
Commenting on the results, Dangote Cement GMD/Chief Executive Officer, Mr Michel Puchercos, said that the company started the first quarter of 2021 on a positive note and recorded increases in revenue and profitability as the post-tax profit closed at N89.7 billion.
“We took the strategic decision to pause our clinker exports to ensure we meet the rapid volume growth in the Nigerian domestic market.
“We are improving the output of our existing and new assets and aim to recommence clinker exports in the second quarter.
“Our Pan-Africa operations have reached new heights, with an EBITDA margin of 25.5 per cent and volume growth of 12.8 per cent reported during the quarter.
“One of our priorities in 2021 is to strengthen our alternative fuel initiative. It focuses on leveraging the circular economy business model, optimising costs and reducing exposure of our cost base to foreign currency fluctuations.
“As ever, we are committed to keeping our staff and communities safe by being fully compliant with health and safety measures in all our territories of operation,” he said.
Dangote Cement Plc is sub-Saharan Africa’s largest cement producer with an installed capacity of 48.6Mta across 10 African countries and operates a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales and distribution of cement.
The firm has a long-term credit rating of AAA+ by GCR and Aa2.ng by Moody’s due to its market-leading position, significant operational scale and strong financial profile evidenced by the company’s 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 Limited, 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.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited came under pressure on Friday, staggering by 0.21 per cent at the close of trading activities.
Investors embarked on profit-taking yesterday, particularly in the energy and industrial goods sectors, which closed lower by 0.43 per cent and 0.06 per cent, respectively.
The gains reported by the others could not extend the stay of Customs Street in the positive territory yesterday.
Data showed that the insurance counter closed higher by 2.07 per cent, and the banking space improved by 0.55 per cent, while the consumer goods and commodity indices closed flat.
When the closing gong was struck by 2:30 pm, the All-Share Index (ASI) was down by 224.91 points to 104,563.34 points from 104,788.25 points and the market capitalisation contracted by N141 billion to N65.707 trillion from N65.848 trillion.
Deap Capital lost 9.71 per cent to trade at 93 Kobo, Royal Exchange crumbled by 9.09 per cent to 80 Kobo, Sovereign Trust Insurance fell by 7.61 per cent to 85 Kobo, Guinea Insurance depreciated by 7.35 per cent to 63 Kobo, and Oando dwindled by 5.57 per cent to N39.00.
Conversely, Caverton jumped by 9.96 per cent to N2.54, VFD Group surged by 9.90 per cent to N87.70, Abbey Mortgage Bank gained 9.86 per cent to close at N6.13, FTN Cocoa advanced by 9.83 per cent to N1.90, and Regency Alliance rose by 9.43 per cent to 58 Kobo.
On Friday, investors traded 380.0 million equities worth N10.1 billion in 10,791 deals versus the 432.6 million equities valued at N9.7 billion transacted in 12,027 deals in the previous trading session, indicating an uptick in the value of transactions by 4.12 per cent and contractions in the volume of trades and the number of deals by 12.16 per cent and 10.28 per cent apiece.
Access Holdings retained its position as the most active equity with 73.2 million units sold for N1.5 billion, Zenith Bank exchanged 33.4 million units worth N1.7 billion, Cutix transacted 29.7 million units valued at N63.0 million, GTCO traded 25.7 million units worth N1.7 billion, and Fidelity Bank transacted 19.7 million units valued at N374.2 million.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange went down by 0.31 per cent on Friday, April 10, with the Unlisted Security Index (NSI) depreciating by 1038 points to 3,277.57 points from the previous session’s 3,287.85 points.
Similarly, the market capitalisation of the bourse depleted by N6.02 billion to close at N1.919 trillion from the N1.925 trillion it ended on Thursday.
FrieslandCampina Wamco Nigeria Plc gave away N2.95 to close at N35.55 per unit versus the previous day’s N38.50 per unit and Acorn Petroleum Plc lost 13 Kobo to end at N1.17 per share from the previous closing value of N1.30 per share.
During the session, there was a 750.8 per cent surge in the volume of securities transacted to 152.3 million units from the 18.1 million units transacted in the previous trading day, the value of transactions grew by 2,268.9 per cent to N4.6 billion from N192.9 million, and the number of deals went down by 20 per cent to 16 deals from 20 deals.
Impresit Bakolori Plc remained the most active stock by volume on a year-to-date basis with 533.9 million units worth N520.9 million, followed by Okitipupa Plc with 153.6 million units sold for N4.9 billion, and Industrial and General Insurance (IGI) Plc with 71.2 million units valued at N24.2 million.
However, Okitipupa Plc became the most traded stock by value on a year-to-date basis with 153.6 million valued at N4.9 billion, trailed by FrieslandCampina Wamco Nigeria Plc with 14.6 million units worth N562.7 million, and Impresit Bakolori Plc with 533.9 million units sold for N520.9 million.
By Adedapo Adesanya
The Naira closed the last trading session of the week in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on a positive note on Friday, April 11 with a gain of 1.2 per cent or N18.86 against the United States Dollar.
During the trading day, it was exchanged at the official forex market at N1,611.08/$1, in contrast to the N1,629.94/1 it was traded a day earlier.
The local currency strengthened yesterday at the currency market after the Dollar weakened in the international scene, making currencies like the Naira have a sigh of relief.
Also supporting this is efforts by the Central Bank of Nigeria (CBN) to prop the market with the necessary liquidity.
However, the domestic currency depreciated against the British Pound Sterling at the spot market during the session by N5.57 to settle at N2,090.58/£1 compared with Thursday’s closing price of N2,085.01/£1 and lost N10.18 against the Euro to sell for N1,815.82/€1, in contrast to the preceding day’s N1,805.64/€1.
At the parallel market, the Nigerian Naira traded flat against the greenback on Friday, remaining unchanged at N1,620/$1.
As for the cryptocurrency market, it was bullish after the US Dollar fell to a 3-year low and Producer Price Index (PPI) inflation dropped sharply.
The drop in the greenback made it possible for investors and traders to buy more while the index came in at 2.7 per cent versus the anticipated 3.3 per cent while the core PPI print also surprised to the downside.
Solana (SOL) appreciated by 5.4 per cent to $123.31, Dogecoin (DOGE) rose by 4.3 per cent to $0.1638, Bitcoin (BTC) increased by 3.2 per cent to $83,697.39, and (XRP) added 2.4 per cent to quote at $2.04, and Binance Coin (BNB) soared by 1.4 per cent to $587.41.
In addition, Ethereum (ETH) improved by 1.2 per cent to $1,573.75, Cardano grew by 0.3 per cent to $0.6234, Litecoin (LTC) also went up by 0.3 per cent to $76.20, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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