Dangote Cement Raises N50bn via CP to Support Short -term Funding

Dangote Cement Raises N50bn via CP to Support Short -term Funding

Goddy Egene

Dangote Cement Plc is raising N50 billion in the fifth, sixth and seventh series of its N150 billion Commercial Paper (CP) programme.

The series 5 is for 93 days tenor with effective yield of 12.38 per cent, while series 6 is for 178 days and has effective yield of 13.08 per cent. On the other hand, series 7 is for 269 days and has a yield of 13.16 per cent.

The offer opened last Wednesday and will close today. Minimum subscription is for each series is N5 million and multiples of N1,000 thereafter.

According to Dangote Cement Plc, the proceeds of the CP would be used to support its short term financial requirements.

The leading cement manufacturing firm, last year recorded a revenue of N901.21 billion, with Nigerian operations accounting for N618.30 billion, representing an increase of 11.9 percent over N552.36 billion in 2017.

Pan-African operations recorded revenues of N263.26 billion, an increase of 9.6 percent over N258.44 billion posted in the corresponding period in 2017. Profit after tax stood at N390.32 billion, up from N204.25 billion while earnings per share rose from N11.65 to N22.83. The company directors are proposing a dividend of N16 per share.

A further analysis of the performance showed that Dangote Cement maintained its dominance of the Nigerian market, accounting for 65 per cent of the total volume sold in the domestic cement sector in 2018. The company also exported 800,000 metric tonnes (MT) of cement to West African countries, strengthening Nigeria’s position as a cement exporting country, creating jobs in the economy, and earning foreign exchange.

The company sold a total of 23.54 MT of cement across Africa indicating an increase of 7.4 per cent over 21.92 MT sold in 2017. Nigerian operations accounted for 14.18 MT representing an increase of 11.4 per cent over the volume of 12.72 metric tonnes sold during the preceding year. The increase in the Nigerian volume is attributable to higher building activities as the economy recovered from recession.

Commenting on the results, Group Chief Executive Officer, Dangote Cement, Joe Makoju, said: “This is a record financial performance by Dangote Cement, driven by a strong increase in our home market, Nigeria, despite heavy rains and uncertainties about the election. Although Pan-African volumes were unchanged in 2018, I am confident that we will see an increase in 2019, driven by higher volumes in Tanzania, Ethiopia, Congo and Sierra Leone. Now that we have gas turbines operating in Tanzania we will also see increased profitability in the Pan-Africa region and this will help to improve overall Group margins.”

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