Shareholders of the Dangote Cement Plc have thrown their weight behind the pan-African expansion of the company, saying it will yield sustainable returns.
They noted that the expansion would make the company the foremost cement manufacturer in the world. The endorsement came during the annual general meeting (AGM) of the company held in Lagos.
Addressing the shareholders, Chairman of DCP, Alhaji Aliko 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.
“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. Diversification is the key to our strategy and that is why we have intensified our expansion.
The way we have gone about our expansion, it would appear we have over invested in capacity expansion in Nigeria given that at 29 million metric tonnes per annum(mtpa) and we have another 12 million mtpa capacity plants under construction. But the truth of the matter is that investments can never be enough in Nigeria. We need it,” he said.
According to him, DCP has achieved significant progress in becoming a truly pan-African manufacturer 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. 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 plants in exiting growth markets that will generate substantial returns for shareholders for many years to come,” he said.
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 due its quality products and competitive prize.
Dangote disclosed the company produces 44 million mtpa in eight countries with 14, 289 staff, and N491.7 billion in sales.
“We have invested billions of dollars in building new capacity across Africa, creating thousands of jobs in factories, logistics, sales and support. We have single handedly helped Nigeria become self-sufficient in cement,” he said.
One after another, the shareholders expressed their satisfaction at the management style of the company which has continue 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.
They specifically lauded the disposition of the Company Chairman, Aliko Dangote to creating wealth and jobs for the teeming populace, noting that about five of Dangote in Africa would have turned the continent to a developed one to the envy of others.
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 the amazement of the shareholders.
Highlights of the result showed that revenue up by 25.6 per cent to 491.7 billion as new plants perform strongly across Africa. Earnings before interest, taxes, depreciation and amortisation (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.
Dangote Cement had 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.