Dangote Cement’s half-year profit slightly higher despite record revenue

Nigeria’s biggest company by market value, Dangote Cement, attained only a single-digit rise in net profit for the year’s first half, a performance at variance with that of its turnover, which accelerated by as much as 85.1 per cent to the peak point ever since it was set up.

The corporation’s revenue of N1.8 trillion in the six-month period already surpasses that of the whole of 2022 and is only a breath away from matching its turnover for last year.

Sales volume inched up by 3.9 per cent, suggesting that the mega revenue posted by the manufacturer was driven by sharply higher prices at which it sold its products rather than by it growing its sales significantly.

Dangote Cement cashed in on hikes in cement prices in Nigeria early in the year, helping the company to sell a tonne of clinker at an average price of N127,614, compared to N71,766 a year earlier, according to figures from its latest earnings report.

Scaling up profit was clearly challenging for the cement business of Africa’s richest man, Aliko Dangote, in the six months to June, with the direct cost of production more than doubling.

Fuel and power alone accounted for nearly half of direct costs, having surged by 138.7 per cent year on year.

Investment Corporation of Dubai, the chief investment arm of the Government of Dubai, holds a 1.5 per cent minority interest in the entity.

Price levels, which galloped to their highest in 28 years within the review period, also took their toll on operations, causing big jumps in administrative expenses as well as selling and distribution costs.

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The corporation incurred N201.3 billion in net foreign exchange loss, relative to N113.3 billion in the same period of last year.

Profit before tax stood at N293 billion, up by 22.1 per cent, while post-tax profit climbed to N189.9 billion from N178.6 billion.

Worth N5.4 trillion in total assets, the cement maker opened trade on Friday in Lagos at a market capitalisation of N11.2 trillion.