Dangote Cement shareholders to split N145bn

Nigeria’s most capitalised company and the cash cow of Africa’s richest man, Alhaji Aliko Dangote, Dangote Cement has announced that it would distribute N144.84 billion to shareholders as cash dividends for the 2016 business year.

The dividend recommendation was one of the highlights of the audited report and accounts for the year ended December 31, 2016. The board of directors of the company, under the chairmanship of Aliko Dangote, indicated it has recommended distribution of N144.84 billion as cash dividend for the 2016 business year, 6.25 per cent above N136.32 billion paid for the 2015 business year.

A breakdown of the gross dividend indicated that shareholders will receive a dividend per share of N8.50 for the 2016 business year as against N8 paid for the 2015 business year.

The group audited report showed that total sales rose from N491.73 billion in 2015 to N615.10 billion in 2016. Gross profit rose marginally by 0.47 per cent from N289.92 billion to N291.29 billion. Profit before tax declined by 3.91 per cent from N188.29 billion to N180.93 billion. With a tax boost, net profit after tax inched up by 2.9 per cent from N181.32 billion to N186.62 billion. Consequently, the earnings per share increased from N10.86 in 2015 to N11.34 in 2016.

Dangote Cement’s share price remained unchanged at N168.99 at the NSE. Analysts at FBN Capital stated that the earnings report had been factored into the pervious valuations of Dangote Cement.

At a recent presentation of the underlying facts on the operations of the cement group, chief executive officer, Dangote Cement Plc, Onne Van der Weijde, had outlined the strategic initiatives being taken to improve the profitability of the cement group.

Van der Weijde said the cement group would start 100 per cent coal production in September 2016 in an attempt to overcome the shortage of gas supply and reduce the challenge of foreign exchange (forex).

According to him, the company had decided three years ago to diversify and de-risk fuel supplies by opting for coal mills as energy sources, with the coal mills now ready for operation by end of September 2016.

He said switching to coal would improve margins compared with Low Pour Fuel Oil, improve fuel security, eliminate shutdown as 100 per cent coal use will be possible across all lines and reduce forex need for imported fuel.

He added that some of the company’s plant in Obajana in Kogi State and Ibese in Ogun State have already started using locally purchased coal blended with imported coal to assure optimal quality for their operations.

“We will begin mining our own coal at Ankpa in Kogi State in fourth quarter,” Van der Weijde said.

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He noted that klin fuel is the major cost of cement production, pointing out that the group margins are affected by the inefficiencies in the fuel mix.

He assured that in the second half, the group expects strong volume growth with Ghana likely to import more cement from Nigeria while simultaneously focusing on protection of margins in Nigeria with more coal facilities in Nigeria coming on stream and increased exports to ECOWAS countries.

He said the groups’ Congo plant is set for operation in October 2016 while the Sierra Leone plant is expected to be ready by October 2016.

 

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