Dangote Cement half-year PAT up 51% to 191.6bn naira

Dangote Cement, Africa's largest cement maker, has announced a significant increase in its half-year post-tax profits, up by 51.9% to 191.6 billion naira. The company also reported a 44.8% growth in revenues, driven by a 26.1% increase in group volumes to 15.3 metric tonnes, with Nigeria alone seeing a 33% rise in volumes to 9.9 metric tonnes. Michel Puchekos, the Group Managing Director of Dangote Cement, recently joined CNBC Africa to discuss the factors behind these impressive numbers. Puchekos attributed the strong revenue growth to a combination of price increases and increased volume sales. Despite facing resistance in some markets due to the sensitivity of cement pricing, Dangote Cement managed to raise prices across all its operating countries. The global economic factors, particularly rising freight costs, put pressure on the company's input costs, prompting them to pass on some of these increases to consumers. The efficient supply chain from mining to customer delivery played a crucial role in maintaining high revenue realization for the company. By focusing on market share growth and ensuring constant product quality and availability, Dangote Cement was able to outperform market growth rates. The company also successfully controlled costs and maintained efficient assets to achieve a bottom line growth that outpaced market trends. In the face of challenges such as USD scarcity in Nigeria and unprecedented increases in freight costs, Dangote Cement implemented a robust export program to generate US dollars and mitigate the impact on its business. Despite these hurdles, the company benefitted from a strong market demand since June 2020, leading to positive outcomes for its operations. Looking ahead to the second half of the year, Puchekos expressed optimism about continued strong demand for cement in Nigeria, driven by infrastructure and housing projects. The recent commissioning of the Oqel Plant and upcoming capacity expansions are expected to support the growing demand from customers. The company also plans to restart clinker shipments to Cameroon, contributing to its volume growth targets. Dangote Cement's operations across Africa have seen significant sales volume growth, with a 15% increase compared to the previous year. Despite challenges in some markets like Ethiopia and South Africa, the company remains focused on driving growth and meeting demand. The ongoing multi-instrumentation insurance program, valued at 300 billion naira, aims to support Dangote Cement's debt management and financing needs. In terms of capital market initiatives, Dangote Cement's buyback program has received positive feedback from investors and was recently renewed for another year. The company plans to continue returning cash to shareholders through buybacks alongside annual dividend payments. As the construction sector outlook remains favorable in most countries of operation, Dangote Cement is poised for a strong performance in the second half of the year. With a focus on infrastructure development, cost reduction initiatives, and market expansion, the company is well-positioned to maintain its growth momentum and generate value for shareholders.