Dangote Cement to pay over N97bn for 2020 corporate tax

Africa’s largest cement producer, Dangote Cement Plc has remained a major contributor to the economy with a tax charge of N97 billion for the financial year ended Dec. 31, 2020, even as it proposed a dividend of N16 per share.

According to the cement group’s audited results released on the floor of the Nigerian Stock Exchange (NSE), the tax charge represents an increase over the sum of N50 billion recorded in 2019.

Dangote Cement’s Nigerian operations during the period sold 15.9Mt for the full year 2020, compared to 14.1Mt in 2019, which includes both cement and clinker sales.

Looking at the domestic sales alone, Nigerian operations sold 15.6Mt.

Revenues for the Nigerian operations came in at ₦720.0 billion, owing to demand in the domestic market.

This volume growth was enhanced by a successful innovative national consumer promotion “Bag of Goodies – Season 2” and lower rains in the third quarter compared to the previous year.

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Dangote Cement posted a record high Pan-African Earnings before interest, taxes, depreciation and amortization (EBITDA) of ₦71.3 billion.

Within the period under review, the cement group commissioned its gas power plant in Tanzania; Group earnings per share was ₦16.14.

Dangote Cement recorded strong performance not only at the top line but also at the bottom line, owing to cost saving measures.

In spite of inflationary pressures and foreign exchange volatility, disciplined cost control measures enabled the company to maintain a relatively flat cash cost per tonne.

The cost control measures include improved plant efficiency, better fuel mix and general overhead optimisation.

Chief Executive Officer, Dangote Cement Plc, Michel Puchercos, in his comments on the results, said: “2020 was a good year for Dangote Cement across board. Several firsts made 2020 a productive year such as our maiden clinker shipment, maiden bond issuance and successful buyback programme.

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“We increased our capacity by 3Mt in Nigeria, commissioned our two export terminals and commissioned our gas power plant in Tanzania. All these were achieved whilst we focused on protecting our people, customers and communities from the impact of the pandemic.

“Looking ahead, we have strengthened our Alternative Fuel initiative which focuses on leveraging the circular economy business model and reducing exposure of our cost base to foreign currencies fluctuations. We continue to embed Dangote Cement’s 7 sustainability pillars into every aspect of our operation and culture.

“We remain committed to keeping safe our staff and communities by being fully compliant with health and safety measures in all our territories of operation. We are focused on adapting to the rapidly evolving markets in which we operate.”

Dangote Cement Plc is sub-Saharan Africa’s largest cement producer with an installed capacity of 45.6Mt across 10 African countries and operates a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales and distribution of cement.

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Dangote Cement has a long-term credit rating of AA+ by GCR and Aa2.ng by Moody’s due to its market leading position, significant operational scale and strong financial profile.

These are evidenced by the company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, satisfactory cash flow and low leverage.

Dangote Cement is a subsidiary of Dangote Industries Limited, a diversified and fully integrated conglomerate as well as a leading brand across Africa in businesses such as cement, sugar, salt, beverages, and real estate.

It also has new multi-billion dollar projects underway in the oil and gas, petrochemical, fertiliser and agricultural sectors.

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