Dangote Cement Plc has released its earnings report for the first-half (H1) of the year 2020. The unaudited result for the period revealed that the nation’s largest cement manufacturer posted a profit of N126.14 billion, against N119.24 billion recorded H1 of 2019.
The company reported revenue of N476.85 billion for the period ended June 2020 compared to N467.73billion recorded for the period ended June 2019. This represents a 2% increase in the comparative period in 2019.
This was disclosed in the interim financial statementthe company sent to the Nigerian Stock Exchange on Friday.
Its Profit before tax was ₦N162.85 billion for the period ended June 2020 from ₦ 155.48 billion reported for the period ended June 2019. The company’s cost of sales went up to N202.42billion in H1’20 from H1’19 level of N193.17billion, up 4.8%.
Dangote Cement Plc, however, reported earnings per share of 745kobo for the period ended June 2020 compared 707 kobo reported for the comparative period in 2019.
Nairametrics had reported when Dangote Cementrecorded a decline in Revenue (-1.1% y/y to N891.7 billion) in FY 2019, coming below our FY 2019 forecast of N922.3 billion.
The decline in Group Revenue was largely due to weak Revenue from its Nigerian operations (-1.3% y/y to N610.2 billion), as the growth in sales volumes generated by sales promotions could not cushion the impact of price discounts offered to customers.
The weak topline performance, coupled with an increase in Operating Expenses (+17% y/y to N184.6 billion) and Finance Cost (+16% y/y to N57.7 billion), led to a decline in Pre-tax Profit (down 16.7% y/y to N250.5 billion) in FY 2019.
Analysts expect the deterioration in the macroeconomic conditions, caused by the outbreak of COVID-19 which triggered a sharp decline in oil prices to constrain activities in the construction industry as fiscal spending on capital projects weakens.
Dangote Cement is currently trading at ₦124.00.