Dangote Cement Plc recently disclosed its second-quarter results for 2023, which showed a 14% decrease in pre-tax profits, amounting to N93 billion. This brought the half-year pre-tax profits to N239.9 billion, compared to N264.8 billion during the same period last year.
One of the significant factors impacting the results was an exchange rate loss of N103.8 billion in the second quarter due to the unification of the naira.
However, amidst the challenges, the company also reported several positive highlights. Revenue witnessed a remarkable increase of 37.8% to N544.1 billion, and the operating profit soared by an impressive 64.9% to N93 billion. This substantial growth in operating profits contributed to a rise in gross margins to 59.7% from 57.4% year on year, and an increase in operating profit margin to 41% from 34.3%.
The earnings per share slightly rose to N3.95 from N3.92, while the net cash flow from operating activities reached N355.2 billion.
On the financial front, the company showed a significant increase in finance costs, which surged by 385% to N130.1 billion during the quarter. Moreover, Dangote Cement’s short-term loans saw a substantial rise, reaching N683.4 billion compared to N338 billion in Q1 2023. Similarly, long-term loans increased to N370.7 billion from N342 billion in Q1 2023.
Insights into the results reveal that Dangote Cement demonstrated robust operating profit earnings during the second quarter, marked by a 65% increase in operating profits.
However, like many other corporates, the company also faced foreign exchange losses of N103.8 billion, which impacted its financials. It is worth noting that the forex component of Dangote Cement’s loans is N217.4 billion, primarily consisting of letters of credit, and these loans are at a Secured Overnight Financing Rate (SOFR) plus 10%.
