Africa’s largest cement producer, Dangote Cement, has announced resilient results in the first six months that ended June 30, 2021 as Group sales volumes hit 15.3Mt.
According to the company’s unaudited results for the period under review, Nigerian operations accounted for a sales volume of 9.87Mt while pan African operations contributed the balance of 5.5Mt. The increase in sales volume was supported by an increase in housing infrastructure and commercial construction.
In the period, the cement giants posted a profit after tax of ₦191.6 billion, after a tax charge of N89.6 billion.
The company recommenced clinker exports from Nigeria in second quarter, with two clinker shipments, one each from Apapa and Onne terminals.
Speaking on the results, Group Managing Director, Dangote Cement, Michel Puchercos,said: “We are pleased to report a solid set of the good results for the first half of the year. Our performance reflects the strong demand across the Group, with increases in revenue and profitability, compared to the same period last year. This strong intrinsic performance is magnified by the lower Q2 2020 results because of COVID-19. The growth trend continues, and we are focused on meeting the strong market demand across all our countries of operation.”
On the steps taken by the company to protect the stakeholders, he said: “We also continue to maintain a strong focus on health and safety measures in all our engagements with stakeholders. We have learned a lot over the past year on how to mitigate risks associated with COVID-19. We remain committed to protecting our team members and communities by being fully compliant with local laws and regulations.
“We recommenced clinker exports in the second quarter after taking the strategic decision to pause our clinker exports. This was to ensure we met the historic volume growth in the Nigerian domestic market since mid-2020. We are improving the output of our existing and new assets and I am happy to announce that our 3Mt Okpella Plant, Edo State, is on track to come on stream in the next quarter.”
Puchercos stated that the company’s Alternative Fuel project which focuses on leveraging waste management solutions, reducing CO2 emissions and sourcing material locally is at an advanced stage while procurement and installation of the necessary equipment across all plants is ongoing.
He added that Dangote Cement is focused on sound governance, saying: “We are leading the way with our commitment to sustainability and best practices. We are driven by the goal of achieving the highest level of governance and building a sustainable brand for all stakeholders. Transparency and consistency are at the core of every part our business culture.”
Dangote Cement became the first Nigerian listed company to report its financial results using XBRL format with the IFRS taxonomy. Adopting XBRL reporting format will strongly benefit Dangote Cement’s existing and potential investors. It represents another step in continuing efforts to modernize and enhance transparency of, and access to, companies’ disclosures.
Dangote Cement Plc is Sub-Saharan Africa’s largest cement producer with an installed capacity of 45.6Mta capacity across 10 African countries and operates a fully integrated “quarry-to-customer” business, with activities covering manufacturing, sales, and distribution of cement.
The Group has a production capacity of 32.3Mta in its home market, Nigeria. It has three cement plants in Nigeria, Obajana plant in Kogi state, with 16.3Mta of capacity across four lines; Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and Gboko plant in Benue State has 4Mta. Through recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement, serving neighbouring countries.
In addition, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).
Dangote Cement has a long-term credit rating of AAA(NG+) 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.
Similarly, Dangote Sugar Refinery recorded strong improvements in performance indices in half year ended June 30, 2021, as group revenue increased by 27.8 percent to N131.95 billion in contrast to N103.23 billion recorded at the same period in the preceding year.
According to the refinery’s unaudited results for the period, Gross Profit grew double digit at 37.3 per cent to N28.59 billion, compared to N20.82 billion at the preceding year due to better topline performance.
Group Sales Volume increased to 388,589 tonnes while production volume also increased by 7.6 per cent to 403,846 tonnes, driven by operations optimization drive.
Commenting on the company’s half year 2021 performance, the Group Managing Director/CEO, Ravindra Singhvi, said: “We commenced the year on a strong footing with impressive performance in first half as the financial results have shown, with a stronger Q1 topline growth and a robust Q2 topline growth year-on-year.
“During the period under review, we launched our new packaging designs for the 50kg fortified and non-fortified sugar bags with the theme ‘Dangote Sugar has a new look…. Same Great Quality.’ The theme reaffirms the quality of our product and inspires a deeper connection to the Dangote Sugar brand among our valued customers and consumers, whilst refreshing our market presence as the leading sugar brand in Nigeria.”
He added: “As part of our Supply Chain Management Sustainability journey, we continued to enhance our Outgrowers Scheme. The technical and agriculture support provided for them over time has led to the improved yield from our Outgrowers sugarcane farms at the Numan Sugar Estate. This effort will be sustained to ensure the socio-economic growth of our immediate communities and improved sugar cane supply for production.
“The team is committed to navigate the second half of the year, keeping the health and safety of our people and partners as top priority. Our Refinery in Apapa and Backward Integration Operations in Numan, Adamawa State and Tunga, Nasarawa State, continue to operate in compliance with our health and safety protocols while ensuring our commitment to the environment and sustainable business practices are maintained.”
He stated that the recurrent challenges with Apapa traffic gridlock persisted during the first half of the year but expressed optimism that the truck call up system will address the situation.
“Achieving the Dangote Sugar Backward Integration Projects targets remains our focus. We are resolute and will continue in our quest to put Nigeria on the path of sugar self-sufficiency and on the world sugar map,” he added.
Dangote Sugar Refinery is Nigeria’s largest producer of household and commercial sugar with 1.44M MT refining capacity at the same location. The refinery located at Apapa Wharf Ports Complex, refines raw sugar imported from Brazil to white, Vitamin A fortified refined granulated white sugar suitable for household and industrial uses.
It has the Backward Integration goal of becoming a global force in sugar production, by producing 1.5M MT/PA of refined sugar from locally grown sugar cane for the domestic and export markets.
To achieve this, Dangote Sugar Refinery Plc acquired DSR Numan Operations (Savannah Sugar Company Limited), located in Numan, Adamawa State in December 2012, and embarked on the ongoing rehabilitation of its facilities and expansion of its 32,000 hectares’ sugarcane estate. In September 2020, the scheme of merger between DSR and Savannah Sugar Company Limited was completed which gave birth to a bigger and stronger business, with considerable opportunity for growth and delivery of superior benefits to all stakeholders. The expansion of the sugar estate is still ongoing as well as the development of the greenfield site acquired at Tunga, Nasarawa State, for the achievement of DSR’s sugar for Nigeria development master plan.
The Nasarawa Sugar Company Limited is the registered subsidiary of Dangote Sugar Refinery Plc. The 78,136 hectares Sugar Project site is located at Tunga, Awe Local Government Area, of Nasarawa State. Massive development in agriculture, irrigation infrastructure amongst others is ongoing at the site.
Dangote Cement and Dangote Sugar are subsidiaries 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, pasta, beverages, and real estate, with new multi-billion-dollar projects underway in the oil and gas, petrochemical, fertilizer and agricultural sectors.