WorldStage Newsonline– Dangote Cement on Tuesday released its fourth quarter (Q4) 2017 results through the Nigerian Stock Exchange with an after-tax loss of N16.1 billion from the PAT of N43.2bn in Q3 2017.
The huge loss was driven by a negative result of –N21.81billion in other comprehensive income (OCI) and a significant increase in income tax rate to 84% as against 11% Q4 2016.
The results which showed that profit before (PBT) grew by a stellar 116% y/y to N69.4bn, driven by a 17% y/y expansion in sales, a 799bp y/y expansion in gross margin to 54.7% and an -86% y/y reduction in net interest expense.
A N2.2 billion profit from associates related to DangCem’s investment in Onigbolo Cement in Benin Republic also contributed to a lesser extent to the earning. These positives completely offset a 53% y/y rise in opex.
On a full year basis, sales and PBT were up by 31% y/y and 60% y/y to N805.6bn and N289.6bn respectively. However, due to the negative result on the OCI line, PAT declined by -22% y/y to N195.1bn.
Meanwhile, management has proposed a dividend of N10.35 per share, which is up 24% y/y and broadly in line with our and consensus DPS forecasts of N10.1 and N10.7 respectively. The DPS imply a yield and pay-out ratio of 3.9% and 90.4% respectively.
Although unit volumes for Nigeria are still under some pressure, it appears that demand is starting to pick up slowly. Based on management’s statement, unit volumes for Nigeria showed a slower rate of decline of -4% y/y to 3.09 million metric tonnes (mmt), compared with the -16% y/y decline to 2.8mmt in Q3 2017. In contrast, unit volume growth for the pan-African operation was up by around 11% y/y in Q4 to around 2.3mmt, driven by strong performances in Cameroon, Ethiopia and Senegal.
