Economy
GCR Affirms AA+(NG) Rating on Dangote Cement
By Modupe Gbadeyanka
The long term and short term national scale issuer ratings of AA+(NG) and A1+(NG) respectively have been affirmed on Dangote Cement Plc by Global Credit Ratings (GCR).
In a statement issued by the rating agency last Monday, it further said the cement company’s outlook has been accorded as stable.
Explaining why it accorded the ratings on Dangote Cement, GCR said it took cognisance the firm’s strong position as one of the world’s top 20 cement companies by installed capacity.
Management plans to revise its expansion pipeline, in view of foreign currency restrictions and unutilised capacity in Nigeria.
Medium term commitments have been limited to grinding plants in Cote d’Ivoire and Ghana, while execution of the rest of the capex plan will depend on foreign currency availability.
Nigeria remains the dominant area of operations and accounted for 69% and 90% of revenue and EBITDA respectively in FY16 (FY15: 79% and 91%).
Dangote Cement Plc is Africa’s leading integrated cement group and subsidiary of Dangote Industries Limited (DIL), a diversified multinational corporate with operations spanning building materials, packaging, logistics, real estate, food and beverages, as well as real estate.
Rapid fixed capital accumulation increased the company’s installed capacity to c.46 million tonnes per annum (mtpa) across 10 countries by 1H FY17, from just 8mtpa in 2011.
The group has secured clinker sufficiency in Nigeria, and as a low-cost producer, is well positioned to absorb exogenous shocks without incurring material earnings variability.
Its strategic vision is to remain Africa’s leading producer of cement and aims to be the leader in quality, costs and services across all operations, with a market share of at least 30% and a first or second position in each market.
The group achieved 20% CAGR in revenue in the five years under review, registering turnover of N615.1bn in FY16.
Dangote Cement’s strong top line performance was underpinned by dominance of the domestic market, which enabled it to absorb sharp price compression to secure volume traction. Some regions within Pan-African operations also reported strong sales growth in 2016. Combined with marked energy and distribution cost escalation, challenges in Tanzania and Ghana, as well as a weaker Naira, the EBITDA margin shed c.12 percentage points to 41.7% (five-year average 53.8%). Nevertheless, EBITDA eased just 2% to N256.8 billion in FY16.
Repricing in the domestic market bolstered the EBITDA margin to 49.2% in 1H FY17, while increased productivity and the bedding down of additional international capacity are expected to see it average at a strong 55% in the medium term.
Operating profit reduced by 12% to N182 billion in FY16, before increasing 67% YoY to N162.8 billion in 1H FY17 at a wider 39.5% margin (FY16: 29.6%). Dangote Cement’s margins remain well above those of its peers.
Cash generation remains sound, albeit discretionary cash flow coverage of net debt has eased to new lows in FY16 and 1H FY17 (65%; 48%), and the short term debt exposure was high at 71% of total debt at 1H FY17 (FY16: 59%). Net interest cover remains adequate (FY16: 4.3x; 1H FY17: 8.5x), and is expected to trend within range for the current ratings in the medium term.
Despite an aggressive cumulative outlay of N813.6 billion on capex in the five and a half years under review, Dangote Cement also paid out N573.2 billion in distributions, which represented 63% of cumulative net income.
This has seen total borrowings more than double from N181.2 billion at FYE13 to N432.6 billion at 1H FY17, of which 47% represented DIL (Naira denominated) loans.
In addition to proven shareholder support, note is also taken of established relationships with strong funders, N120 billion in trade finance credit lines, as well as plans to access debt capital markets to reduce reliance on shareholder loans and enhance funding flexibility and improve the debt maturity profile. International operations do provide a natural currency hedge, albeit constrained by the erratic performance trajectory in some regions.
Although net gearing and net debt to EBITDA have risen from very conservative levels reported prior to FY14, they remain aligned to the ratings, at 39% and 79% respectively as of 1H FY17 (FY16: 32%; 100%). Stressed scenarios indicate that metrics are expected to remain within range over the rating horizon, assuming a tapered capex plan (amongst other considerations).
An upgrade will be dependent on the proven ability to sustain high capacity utilisation domestically in the medium term and the successful bedding down of international capacity enhancements translating to strong Pan-African free cash flows and sustained conservative gearing metrics for the Group.
Conversely, slower than anticipated economic growth in key territories, delays in rolling out public infrastructure projects, foreign currency scarcity, the adverse movement in foreign exchange rates, punitive regulatory changes and competitive pressures may constrain demand and/or pricing flexibility. This could adversely affect earnings and result in liquidity strain, increased gearing metrics and impede debt service, placing downward pressure on the ratings.
By Adedapo Adesanya
TotalEnergies EP Nigeria has signed a Sale and Purchase Agreement with Vaaris for the divestment of its 10 per cent non-operated interest in the Renaissance JV licences in Nigeria.
The Renaissance JV, formerly known as the SPDC JV, is an unincorporated joint venture between Nigerian National Petroleum Company Limited (55 per cent), Renaissance Africa Energy Company Ltd (30 per cent, operator), TotalEnergies EP Nigeria (10 per cent) and Agip Energy and Natural Resources Nigeria (5 per cent), which holds 18 licences in the Niger Delta.
In a statement by TotalEnergies on Wednesday, it was stated that under the agreement signed with Vaaris, TotalEnergies EP Nigeria will sell its 10 per cent participating interest and all its rights and obligations in 15 licences of Renaissance JV, which are producing mainly oil.
Production from these licences, it was said, represented approximately 16,000 barrels equivalent per day in company’s share in 2025.
The agreement also stated that TotalEnergies EP Nigeria will also transfer to Vaaris its 10 per cent participating interest in the three other licences of Renaissance JV which are producing mainly gas, namely OML 23, OML 28 and OML 77, while TotalEnergies will retain full economic interest in these licences, which currently account for 50 per cent of Nigeria LNG gas supply.
Business Post reports that the conclusion of the deal is subject to customary conditions, including regulatory approvals.
“TotalEnergies EP Nigeria has signed a Sale and Purchase Agreement with Vaaris for the sale of its 10 per cent non-operated interest in the Renaissance JV licences in Nigeria.
“Under the agreement signed with Vaaris, TotalEnergies EP Nigeria will sell to Vaaris its 10 per cent participating interest and all its rights and obligations in 15 licences of Renaissance JV, which are producing mainly oil. Production from these licences represented approximately 16,000 barrels equivalent per day in the company’s share in 2025.
“TotalEnergies EP Nigeria will also transfer to Vaaris its 10 per cent participating interest in the 3 other licenses of Renaissance JV, which are producing mainly gas (OML 23, OML 28 and OML 77), while TotalEnergies will retain full economic interest in these licenses, which currently account for 50 per cent of Nigeria LNG gas supply. Closing is subject to customary conditions, including regulatory approvals,” the statement reads in part.
The development is part of TotalEnergies’ strategies to dump more assets to lighten its books and debt.
By Aduragbemi Omiyale
The trading licence of Monument Securities and Finance Limited has been revoked by the regulatory arm of the Nigerian Exchange (NGX) Group Plc.
Known as NGX Regulations Limited (NGX Regco), the regulator said it took back the operating licence of the organisation after it shut down its operations.
The revocation of the licence was approved by Regulation and New Business Committee (RNBC) at its meeting held on September 24, 2025, a notice from the signed by the Head of Market Regulations at the agency, Chinedu Akamaka, said.
“This is to formally notify all trading license holders that the board of NGX Regulation Limited (NGX RegCo) has approved the decision of the Regulation and New Business Committee (RNBC)” in respect of Monument Securities and Finance Limited, a part of the disclosure stated.
Monument Securities and Finance Limited was earlier licensed to assist clients with the trading of stocks in the Nigerian capital market.
However, with the latest development, the firm is no longer authorised to perform this function.
Economy
NEITI Advocates Fiscal Discipline, Transparency as FG, States, LGs Get N6trn in Three Months
By Adedapo Adesanya
The Nigeria Extractive Industries Transparency Initiative (NEITI) has called for fiscal discipline and transparency as data showed that federal government, states, and local governments shared a whopping N6 trillion Federation Account Allocation Committee (FAAC) disbursements in the third quarter of last year.
In its analysis of the FAAC Q3 2025 allocation, the body revealed that the federal government received N2.19 trillion, states received N1.97 trillion, and local governments received N1.45 trillion.
According to a statement by the Director of Communication and Stakeholders Management at NEITI, Mrs Obiageli Onuorah, the allocation indicated a historic rise in federation account receipts and distributions, explaining that year-on-year quarterly FAAC allocations in 2025 grew by 55.6 per cent compared with Q3 of 2024 while it more than doubling allocations over two years.
The report contained in the agency’s Quarterly Review noted that the N6 trillion included 13 per cent payments to derivative states. It also showed that statutory revenues accounted for 62 per cent of shared receipts, while Value Added Tax (VAT) was 34 per cent, and Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue each accounted for 2 per cent, respectively.
The distribution to the 36 states comprised revenues from statutory sources, VAT, EMTL, and ecological funds. States also received additional N100 billion as augmentation from the non-oil excess revenue account.
The Executive Secretary of NEITI, Mr Sarkin Adar, called on the Office of the Accountant General of the Federation, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) FAAC, the National Economic Council (NEC), the National Assembly, and state governments to act on the recommendations to strengthen transparency, accountability, and long-term fiscal sustainability.
“Though the Quarter 3 2025 FAAC results are encouraging, NEITI reiterates that the data presents an opportunity to the government to institutionalise prudent fiscal practices that will protect the gains that have been recorded so far in growing revenue and reduce vulnerability to commodity shocks.
“The Q3 2025 FAAC results are encouraging, but windfalls must be managed with discipline. Greater transparency, realistic budgeting, and stronger stabilisation mechanisms will ensure these resources deliver durable benefits for all Nigerians,” Mr Adar said.
NEITI urged the government at all levels to ensure the growth of Nigeria’s sovereign wealth and stabilisation capacity, by committing to regular transfers to the Nigeria Sovereign Wealth Fund and other related stabilisation mechanisms in line with the fiscal responsibility frameworks.
It further advised governments at all levels to adopt realistic budget benchmarks by setting more conservative and achievable crude oil production and price assumptions in the budget to reduce implementation gaps, deficit, and debt metrics.
This, it said, is in addition to accelerating revenue diversification by prioritising reforms that would attract investments into the mining sector, expedite legislation to modernise the Mineral and Mining Act, support reforms in the downstream petroleum sector, as well as the full implementation of the Petroleum Industry Act (PIA) to expand domestic refining and value addition.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn