To scale its operations, Dangote Cement invested N249.3 billion (equivalent to about $332.4 million) in its twenty-five subsidiaries, most of which allow them to grow profits outside Nigeria. Some of these entities are “currently loss-making and dependent on financial support from the group”, independent auditor KPMG highlighted in a report accompanying the audited financials released on Monday.
Despite incurring N79.9 billion (equivalent to approximately $106.5 million) in administrative expenses, fueled largely by labor costs, Dangote Cement was able to increase revenues due to the rise in prices of its products. However, sales and distribution costs, more than half, are outweighed by the weight of carrying costs on businesses in its home market Nigeria, where logistics costs are among the highest in the world.
While profit before tax fell 2.7 percent to N524 billion (equivalent to about $698.7 million), cash set aside to service debt through financing costs almost doubled, profit after tax improved, bolstered by lower income tax expense.
In its audited annual report, Premium Times Dangote Cement has reportedly disclosed that it will pay a dividend of N20 (equivalent to approximately $0.03) per share for 2022, maintaining the payout level for 2021 when a total of N340.8 billion was declared. The corporation disclosed that it will stick to the same amount paid to shareholders in 2022 as in fiscal 2021. Directors “consider the capital required to fund the company’s operations and expansion plans,” the document said, rather than shareholders needing to collect cash rewards.
The company’s stock price saw no upward movement at the close of trade in Lagos, where it was quoted at N272 (equivalent to approximately $0.36) per unit, which means the announcement is no cheering news for equity investors. The dividend proposal, subject to withholding tax, awaits shareholder approval at Dangote Cement’s forthcoming annual general meeting, with the qualifying date set for March 30. “By April 14, 2023, the dividend will be paid electronically to shareholders whose names appear in the register of members as on March 30, 2023,” the company said elsewhere.
Dangote Cement is setting up a new cement factory in Itori, Ogun State, which is expected to add 6 million tonnes to its current nominal capacity of 51.6 million tonnes per annum. The company’s commitment to expansion plans is expected to drive growth and deliver value to its shareholders.
