Dangote Cement Plc (DANGCEM), Africa’s biggest producer of the building material, said nine-month profit increased 46 percent on higher Nigerian sales even as gas supplies were disrupted at its largest plant.
After-tax income for the nine months through September advanced to 154.9 billion naira ($974 million) from 105.5 billion naira a year earlier, the Lagos-based company said in a statement posted on the website of the Nigerian Stock Exchange today. Revenue rose 29 percent to 288.9 billion naira, as cement sales in Nigeria gained 30 percent to 9.95 million metric tons.
Dangote Cement, controlled by billionaire Chairman Aliko Dangote, has production capacity of 20.3 million metric tons in Nigeria. The company has three plants in Africa’s second largest economy and plans to expand into 13 other nations on the continent, bringing total capacity to more than 50 million tons by 2016.
“Demand for cement remains strong in Nigeria and with our sales nearly 30 percent higher than last year, Dangote Cement has grown at twice the market’s rate of growth,” Chief Executive Officer Devakumar Edwin said in an e-mailed statement today. “As we predicted in July, the gas supply to Obajana was lower than desired during the third quarter and we are looking for additional sources of gas and other fuels such as coal to keep us fully supplied in the coming years.”
Gas utilization at Dangote’s Obajana factory in Nigeria’s Kogi state fell to 67 percent in the third quarter, while its Ibese plant in Ogun state was unaffected, the company said. Normal operations have resumed in Senegal after the nation’s Supreme Court ruled in the company’s favor over a land dispute. The 1.5 million metric ton capacity plant will soon start producing cement, Edwin said.
“Our South African venture, Sephaku Cement, is well on track to open in the early part of 2014,” he said. “These two plants will be our first production ventures outside Nigeria as we aim to become Africa’s leading supplier of cement.”
Dangote Cement’s stock has advanced 48 percent this year, compared with a 33 percent increase in the Nigerian Stock Exchange All-Share Index. (NGSEINDX)
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