Higher raw materials cost led to a drop in profit in Q3 2024 for NASCON (Dangote Salt)

About the firm

Nascon Allied Industries Plc (Formerly known as National Salt Company of Nigeria) was incorporated in Nigeria as a limited liability Company on 30 April 1973. It was fully privatised in April, 1992 and became listed on the Nigerian Stock Exchange on 20 October, 1992. 

At a general meeting held on 29 September 2006, the shareholders approved the acquisition of the assets, liabilities and business undertakings of Dangote Salt Limited and the issue and allotment of additional NASCON PLC shares as the purchase consideration.

The major shareholder of the Company is Dangote Industries Limited which owns 62.19% of the issued share capital, while the remaining 37.81% is held by the general public. 

The principal activities of the company include, the processing of raw salt into refined, edible and grade salt. The company also produces seasoning cubes. The Company’s products are sold through distributors across the country.

9M 2024

Revenue grew by 40.2% from N20.9 billion in Q3 2023 to N29.4 billion in Q3 2024. 

Gross profit is where the story starts to change. Gross profit is the figure you get when you deduct the cost of sales from revenue. That dropped slightly from N13.3 billion in 2023 to N13.2 billion in 2024.

The key driver behind this was a 114% year on year increase in the cost of sales. From N7.5 billion in 2023 to N16.2 billion in 2024. This was due to higher raw materials cost and running expenses. 

Profit after tax for the quarter dropped from N4.8 billion in 2023 to N4.1 billion in 2024. 

Sales breakdown by Geography

 Sales in the North grew fastest during the period accounted for 71% of total sales by the firm. That’s been pretty much constant for this firm. 

All 3 regions (East, West, North) had robust growth during the period. Up over 40% year on year. 

The North had N21.1 billion in sales. The West was next with N6.4 billion in revenue. The East came in third with N1.8 billion in revenue.

Will there be an interim dividend?

In Q3 2023, the firm paid an interim dividend of N1. An interim dividend is one paid before the end of a company’s financial year. As of today, there’s no word, on if an interim dividend will be paid for Q3 2024

At the AGM, which held in May this year, a bonus issue of 1 new share for every 50 shares was approved.

Earnings per share, dropped marginally for 9M 2024 from N5.54 in 9M 2023 to N4.42 in 9M 2024.