By Goddy Egene and Nosa Alekhuogie
Dangote Cement Plc has reported a revenue of N292billion for the half year ended June 30, 2016, indicating an increase of 20 per cent over N242billion posted in the corresponding period in 2015.
According to the reports filed with the Nigerian Stock Exchange (NSE), profit before tax rose to N229.9billion in 2016, from N145.6billion in 2015. However, Profit after tax fell by 14 per cent to N106.3billion, compared with N123.1billion in the corresponding period of 2015.
A further analysis of the performance showed that the fall in profit for half year resulted from foreign exchange loss of about N101 billion which shot up the finance cost to N118 billion in 2016, up from N24.381 billion in 2015.
Commenting on the results, the Chief Executive Officer of Dangote Cement Plc, Mr. Onne Van der Weijde said: “We have achieved a commendable result, given the very challenging situation in our main market and general economic weakening across Africa.”
He said the management would continue to respond to the prevailing operating environment with strategically thought measures for the organisation to maintain its leadership and profitability.
Speaking on the expansion, he added: “While the company remains committed to its ambitious plans, we are taking a more measured approach to the roll-out of new capacity across Africa.”
Dangote Cement has more than doubled production capacity since 2013 and said in April it may increase cement capacity by a further 77 per cent by the end of 2019. However, foreign exchange constraints in Nigeria have prompted the company to reconsider the pace of its expansion and now believes a five-year building program is more appropriate, it said.
According to the company, earnings in the period were affected by lower selling prices, higher fuel costs and the fact that several new plants are still in less-efficient start up phases.
“Cement sales volumes in the period increased 60 per cent, bolstered by record volumes in its home market, where the company announced a price cut last September, as well as new plants elsewhere on the continent. The devaluation of the naira will affect costs in the country and Dangote will seek to protect its profit margins,” Van der Weijde said.