Dangote Cement First-Half Profit Gains on Record Nigeria SalesChris Kay
Dangote Cement Plc, Africa’s biggest producer of the building material, said first-half profit increased 52 percent on record sales in Nigeria.
After-tax income for the six months through June advanced to 107.7 billion naira ($670 million) from 70.8 billion naira a year earlier, the Lagos-based company said in an e-mailed statement today. Revenue rose 28 percent to 198.5 billion naira, as cement sales in Nigeria advanced 29 percent to 6.76 million metric tons.
Dangote Cement, controlled by billionaire Chairman Aliko Dangote, has production capacity of 19.3 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, brining total capacity to 55 million tons by 2016.
“Nigeria’s demand for cement remained robust across the first six months of 2013,” Chief Executive Officer Devakumar Edwin said in the statement. “The 29.4 percent increase in shipments we achieved was more than double the market’s rate of growth.”
Gas supply to Dangote’s two largest cement factories in Nigeria will probably fall in the third quarter due to vandalism of pipelines in the south of the country. The company estimates that 80 percent gas and 20 percent low-pour fuel oil will be used to run the plants this year.
A factory in Senegal hasn’t been able to start production in the first half as intended because of a legal dispute over the land title.
“We remain committed to achieving an acceptable resolution of the land dispute,” the company said in the statement. “Once such a resolution has been achieved, the commissioning process can begin in earnest and the plant could be operational and producing cement within weeks.”
Dangote Cement’s joint venture with Sephaku Holdings Ltd. on a plant in South Africa is expected to start producing in the first quarter of 2014. The plant will have a capacity of three million tons, Dangote Cement said.
Dangote Cement’s stock was unchanged at 190 naira at 1:29 p.m. in Lagos, Nigeria’s commercial capital. The shares have risen 48 percent this year, outpacing the 33 percent increase in the Nigerian Stock Exchange All-Share Index.