9M 2024 numbers for Dangote Cement show an essentially flat performance due to the spike in finance costs. Except Q4 rebounds strongly, FY 2024 profit after tax may come in lower than the prior year.

About the firm

Dangote Cement Plc was incorporated in Nigeria as a public limited liability company on 4 November 1992 and commenced operations in January 2007 under the name Obajana Cement Plc.

The name was changed on 14 July 2010 to Dangote Cement Plc. Its parent company is Dangote Industries Limited (DIL) Its ultimate controlling party is Alhaji Aliko Dangote.

The principal activity of the Company and its subsidiaries (together referred to as “the Group”) is to operate plants for the preparation, manufacture, and distribution of cement and related products. 

Volumes 

Nigerian volumes were up by 9.5% year on year from 12 million tonnes in 2023 to 13.1 million tonnes in 2024. 

African volumes declined slightly year on year due to adverse weather conditions in Tanzania. From 8.4 million tonnes in 2023 to 8.3 million tonnes in 2024. 

Revenues 

Revenue rose by 69% from N1.5 trillion in 2023 to N2.5 trillion in 2024. Revenues rose way faster than volumes, suggesting the firm took a couple of price increases within the period. 

Profit rose marginally 

Profit after tax rose marginally from N277 billion in 2023 to N279 billion in 2024.  

The slim growth was duie to a spike in finance costs following the devaluation of the Naira. Finance costs rose by more than 100% from N190 billion in 2023 to N451 billion in 2024.

How’s 2024 likely to end ?

9M 2024 earnings per share was N16.55 

Q3 2024 earnings per share was N5.29 

One can reasonably estimate FY 2024 earnings would come in at a minimum of  N21. 

At its current price, the stock is trading at a TTM of 17.7 times earnings.

What of a dividend?

For FY 2023, the company paid a final dividend of N30 per share. Chances of the company a much bigger dividend are low.