Dangote Cement Plc, a leading cement company majority owned by Africa’s richest man Aliko Dangote, posted a single-digit rise in its profit for the first half of the 2023 fiscal year, with figures from the recently published financial results indicating a profit surge exceeding $230 million.
According to the disclosed financials, the company’s profit for the first six months of 2023 grew by 3.78 percent, climbing from N172.1 billion ($222.2 million) in H1 2022 to N178.6 billion ($230.6 million) in H1 2023. Meanwhile, the group’s revenue witnessed a significant uptick of 17.67 percent, soaring from N808.04 billion ($1.04 billion) in the first half of 2022 to N950.8 billion ($1.22 billion) during the first half of 2023.
Despite the double-digit surge in revenue, the company’s profit only experienced a modest increase of 3.78 percent. This growth was attributed to higher administrative expenses and selling as well as distribution expenses. Additionally, finance costs during the period amounted to N49.42 billion ($63.8 million), exerting added pressure on the revenue during the first half of 2023.
However, despite these challenges, the company showcased its resilience, leading to a surge in total assets from N2.61 trillion ($3.37 billion) at the beginning of 2023 to N3.19 trillion ($4.12 billion) as of June 30, 2023. On the other hand, retained earnings declined to N804.7 billion ($1.04 billion), down from N969.5 billion ($1.25 billion) at the start of the year.
This decline in retained earnings can be attributed to the deduction of the N340.8 billion ($439.9 million)* dividend paid to shareholders at the end of the 2022 fiscal year. A significant portion of this dividend, N295 billion ($380.8 million)*, was awarded to Nigerian billionaire Aliko Dangote, owing to his 86-percent stake in the leading cement maker.
In a strategic move aimed at enhancing the company’s valuation for shareholders, including Dangote, Dangote Cement executed a share buyback program in July.
Under this program, the company repurchased 168,735,593 ordinary shares, amounting to N50.6 billion ($65.8 million), representing one percent of its current issued shares.
Dangote Cement’s steady financial performance and proactive approach to boosting shareholder value have continued to solidify its position as a major player in the cement industry. As the company navigates the remainder of its fiscal year, stakeholders are keen to see how these initiatives will shape the future trajectory of Africa’s leading cement manufacturer.
* Adjusted to reflect the current going exchange rate