Dangcem profit up 32% to ₦364bn in 2021

Dangote Cement, a leading cement producer, has announced a remarkable 32% increase in its profits to ₦364 billion for the year 2021. The boost in profitability was primarily driven by a surge in both domestic and export sales in Nigeria and the pan-African segment. Michel Puchercos, the Group Managing Director of Dangote Cement, shed light on the factors fueling the company's impressive financial performance. Puchercos attributed the robust top-line growth to multiple factors, including expansion in various countries across Africa, with Nigeria leading the pack. The growth was predominantly stimulated by local infrastructure development, housing, and commercial construction activities, underscoring the resilience of the local economy. Puchercos emphasized the pivotal role of cost control measures in navigating inflationary pressures on inputs such as freight, coal, and other essential components for cement production. The efficient management of costs, coupled with increased volume and improved fixed cost absorption, culminated in the stellar profit figures for the year. Notably, Dangote Cement witnessed a substantial uptick in its market share across several countries, surpassing market growth rates and reinforcing its position as the preferred supplier for customers. The company's performance in Nigeria was particularly impressive, with a double-digit growth rate of 17%, exceeding the historical growth trends over the past 25 years. This surge in demand post-COVID in 2020 has been sustained throughout 2021, further bolstering Dangote Cement's market dominance. In light of pricing dynamics, Dangote Cement implemented strategic measures to manage prices effectively by reducing rebates, cutting marketing expenses, and absorbing external inflationary pressures while adjusting prices in line with market conditions. The company's operations outside Nigeria also exhibited strong growth, albeit facing some challenges in regions reliant on imported inputs like clinker, cement, and coal. Despite these hurdles, overall performance beyond Nigeria remained robust, aligning with the objective of expanding sales beyond local market growth rates. Investors have responded positively to Dangote Cement's financial achievements, with the board recommending a 25% increase in dividends for 2021, amounting to ₦20 per share. The company's dividend policy underscores a commitment to rewarding shareholders, evident in the successful completion of a buyback program and the substantial cash return of over ₦372 billion to shareholders, reflecting a 33% increase from the previous year. Looking ahead, Dangote Cement remains focused on operational expansion initiatives, having successfully added six million tons of new capacity in Nigeria over the past two years. The company's ongoing projects in Ivory Coast and Ghana are progressing as planned, with expectations of their operational commencement within the next 12 months. Future investments are projected to be less capital-intensive, with a strategic approach to optimizing existing assets and enhancing cost efficiencies. As Dangote Cement navigates the remainder of 2022, priorities include maximizing the utilization of current assets, leveraging alternative fuel sources to mitigate energy costs, and exploring opportunities in countries where market saturation is nearing. The company's commitment to sustainable growth, profitability, and stakeholder value remains unwavering, underlining its dedication to meeting high-demand markets while fostering positive impacts across all facets of its operations.