WorldStage Newsonline– Dangote Cement (DangCem) has published its first quarter (Q1) 2018 results which showed that profit before tax (PBT) grew strongly, by 40% to N108.4bn compared with Q1 2017.
Despite a 572bp increase in the effective tax rate to 33.5%, profit after tax (PAT) advanced by 35% to N80.0bn, thanks to a positive result of N10.8bn in other comprehensive income (OCI) compared with N1.3bn in Q1 2017.
The results were driven by a combination of factors including sales growth of 16% , a gross margin expansion of 197bps to 59.8% and a net finance income of N4.6bn compared with a negative net interest expense of N5.9bn in Q1 2017
The net finance income was driven by forex gains of N12.5bn.
Similar to prior quarters, Nigeria was the key driver of performance. Unit volumes for Nigeria grew by 5% to c.4.0 million metric tonnes (mmt). This is the first quarter of growth after five consecutive quarters of unit volume declines and is a broad indication that the nation is on a path of economic recovery. On the back of unit volume growth, sales for the Nigeria division was up 14% y/y. In terms of margins, EBITDA margin for Nigeria was stable at 66.3%.
In contrast, unit volume for the Pan-African operations declined by 4% y/y to around 2.2mmt due to lower sales recorded in Tanzania and Ethiopia. However, sales for the segment grew by 16% y/y due to higher prices in countries like Cameroon and Sierra-Leone relative to Q1 2017.
