Vetiva Capital Management Limited has said Dangote Cement Plc will continue to record growth despite the intensified competition in the industry.
In a report, Vetiva said that Dangote Cement held on to its domestic market share in 2019, noting that going forward the cement firm will post two per cent year-on-year(y/y) growth in 2020. The investment bank explained that in 2019, Dangote Cement group’s revenue fell one per cent to N892 billion.
“Notably, the moderation in Nigeria’s top-line was driven by a one per cent y/y drop in average revenue/ tonne to N43,221.69 even as volumes stayed largely flat y/y. Further to the above, the report stated that pan African revenues stayed flat in 2019, after weak pricing in Senegal and Zambia offset strong volume ramp ups in Tanzania (94 per cent up y/y) and Senegal (two per cent up y/y). Given an expectation of continued volume growth in Tanzania, Senegal, Congo and Sierra Leone, Vetiva projects a 10 per cent y/y growth in Pan African revenue in 2020,” the investment bank said.
Speaking on the report, the Industrial Goods Analyst at Vetiva Capital Management Limited, Onyeka Ijeoma said that the group, in its 2019 figures, reported earnings, before interest, taxation, depreciation and armotisation (EBITDA) falling nine per cent y/y to N395 billion, translating to an EBITDA margin of 44 per cent.
Following the developments in the FY’19 results, Vetiva revised some of its
expectations for 2020 full year earnings, saying revenue is expected to be N934 billion (+5 y/y), with the Nigerian business accounting for 67 per cent. Vetiva said the cement maker is expected to post a profit after tax of N207 billion.