I am not for naira devaluation, says Dangote

Africa’s richest man, Aliko Dangote, on Tuesday categorically rejected calls in some quarters for the devaluation of Nigerian currency, Naira.

Dangote told shareholders at the annual general meeting of his company, Dangote Cement Plc, in Lagos that he was not an advocate of devaluation. He however assured shareholders that even as bad as it may turn out for the economy, devaluation will not in any way affect the fortunes of the cement group.

“We have good strategy in place, the volatility of the foreign exchange will not affect our operations. I am not an advocate of devaluation of our currency, even if that had happened; it would not have affected your company,” Dangote said.

Dangote assured the shareholders that the company would continue to deploy strategies that would increase profitability in spite of the prevailing harsh operating climate.

He explained that with the measures put in place, the foreign exchange volatility would not affect the operations of the company significantly more so when its other African plants are operating maximally and yielding positive results to cushion the effect of the scarce foreign exchange at home.

Dangote in his statement to the shareholders said Africa is rapidly developing, that the UN estimated that its population would rise from about one billion now to 2.4 billion in 2050 with the urbanized population rising from 400 million, to 1.4 billion, which will be more than four times the current population of the United States.

“To support this growth, countries must invest in infrastructure and housing. The World Bank estimates that Africa needs to invest $337 billion a year on new infrastructure in power, roads, transport, and water and then spend a further $35 billion a year on operations and maintenance. This indicate the size of opportunity for a cement manufacturer operating in Africa”, Dangote said.

Dangote said, the company has achieved significant progress in becoming a truly pan-African manufacture and distributor of cement.

“We began the year with three factories in Nigeria, a small import operation in Ghana and several building sites across Sub-Saharan Africa. As a result of the sizable investments that we have made over the past few years, Dangote Cement ended the year with new lines in Nigeria, factories becoming operations in Senegal and South Africa,” he said.

He also added, “As a result of all these initiatives, I believe our company is well on its way to be a global and respected force in cement production, operating an efficient plant in exiting growth markets that will generate substantial returns for shareholders for many years to come.”

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The Company boss noted that the market opportunities opened to the Cement company became apparent upon the opening of its plants in Senegal, Cameroon, Ethiopia, and Zambia, adding that though the countries already had established cement companies but that Dangote cement became successful immediately.

As at today, Dangote disclosed that the company produces 44 million mtpa in eight countries with 14, 289 staff, and N491.7 billion in sales.

One after another, the shareholders expressed their satisfaction at the management style of the company which has continued to increase its earnings and profitability at a time its competitors and other companies are struggling to stay afloat, due to the inclement operating climate.

The Company announced a profit after tax of N181.3 billion for the financial year ended Dec. 31, 2015 while profit after tax grew by 13.7 per cent. Accordingly, the firm is paying N8 per share as dividend to shareholders.

Highlights of the result showed that revenue is up by 25.6 per cent to 491.7 billion as new plants perform strongly across Africa. Earnings before interest, taxes, depreciation and amortization (EBITDA) up by 17.5 per cent to 262.4 billion at 53.4 per cent margin.

This showed that all plants profitable across Africa. Also, earnings per share appreciated by 15.2 per cent to 10.86. Also, dividend went up by 33.3 per cent to 8 per share at 73.7 per cent payout ratio.

Group cement volumes rose by 35 per cent to nearly 19 million tonnes, price reduction drives strong rebound in Nigerian market in the fourth quarter as volumes up 36 per cent and full-year volumes up 3.2 per cent despite severe economic challenges.

It would be recalled that Dangote Cement invested N217 billion on its expansion programme across African countries. The countries are Nigeria, Senegal, Cameroun, Congo, Ghana, Cote d’Iviore, Sierra Leone, South Africa, Ethiopia, Tanzania and Zambia.

 

 

 

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