Despite a challenging operating environment, Dangote Cement Plc grew sales while only slightly increasing profitability. In accordance with its certified financial statement, its yearly profit increased 4.8% to N381.33 billion.
According to a regulatory filing by the cement firm, the board of directors recommended a final dividend to shareholders of N20 per share.
Dangote Cement increased its annual earnings per share from N21.24 recorded in the comparable year in 2021 to N22.27, an increase of 4.8%. Out of this, the management declared a N20 dividend with a 30 March 2023 qualifying date.
Dangote Cement Plc reported a 17% year-over-year growth in revenue to N1.62 trillion from 1.38 trillion recorded in 2021 in its audited financial statement published to the Nigerian Exchange.
Analysts said the company’s claimed greater revenue might be explained by an increase in pricing coupled with a decrease in production levels as it works to maintain its profit margin. The cement firm struggled with higher operating expenses in Nigeria, notably because of pressures from inflation, in the full-year results.
According to a statement from CSL Stockbrokers, the company’s cost of sales (adjusted for depreciation) increased 20.4% annually from N475.07 billion in 2021 to N572.13 billion in 2022, outpacing revenue.
The year’s gross performance was hindered by the pressures. According to the full-year results, Dangote’s gross margin for the fiscal year 2022 decreased slightly by 100 basis points, from 65.7% to 64.6%.
The rise in production cost of sales was driven mainly by an uptick in raw materials cost and cost of energy, according to the report reviewed by analysts including foreign exchange losses.
The cement company’s operating Expenses (adjusted for depreciation) were up 49.4% to N345.48 billion in 2022 from N231.20 billion in 2021. The surge was driven by both administrative expenses adjusted for depreciation (up to N71.52 billion from N57.68 billion in 2021) and selling & distribution expenses.
In 2022, the cement company’s net finance cost rose by 39.4% year on year to N62.633 billion from N44.94 billion in the comparable year in 2021.
Analysts said this is a result of an increase in Interest Income (up 86.4% to 38.72 billion in 2022) amidst a stronger increase in interest expense which was up by 98.4% to N130.37 billion in 2022.
Unsurprisingly, the pressures ate into the company’s bottom line in the toughest year of its existence. The audited statement showed that Dangote Cement’s pre-tax profit declined by 2.8% to N523.02 billion in from N537.89 billion in 2021.
However, a significant decline in tax expenses supported its posttax profit performance in the year. According to its audited report, net income increased by 4.8% to N381.33 billion from N363.93 billion following reduced tax expenses..
