March 3, 2022/FSDH Research
Key Performance Highlights:
- Dangote Cement Group revenue increased by 33.8% YoY to N1,384 billion in FY21 (2020: N1,034 billion), and 32.5% YoY in 4Q21 to N361 billion in 4Q21, outperforming its closest competitor Lafarge Africa (+27.1% YoY) comprehensively. The gross profit for the year increased by 39.6% YoY to N833 billion (2020: N596 billion), resulting in a 252 bps YoY gross margin expansion to 60.2% in FY21. It is worth noting that the company has managed to improve its margins every quarter on a YoY basis. The total sales volume stood at 29,271 kilo tonnes in FY21, a 13.8% increase from the levels of 25,721 kilo tonnes in FY20. The sales volume also increased 2.5% QoQ to 7,108 kilo tonnes in 4Q21.
- The group EBITDA margin expanded 325 bps YoY to 49.5% in FY21. Although the EBITDA margin improved 199 bps YoY in 4Q21, it was down 208 bps sequentially. The total selling and distribution expenses rose 24.7% YoY in FY21, mainly due to an increase in the Haulage expenses to N147 billion in FY21 from N98.9 billion in the previous year. The administrative costs for the company were up 6.6% YoY from N60.4 billion to N64.4 billion in FY21. There was a rise in the company’s other income (+30.9% YoY), majorly due to income derived from the sale of electricity N5.0 billion (2020: N3.29 billion) and sale and disposal of PPE for N0.5 billion, which offset the drop in the Insurance claims to N0.50 billion from N1.3 billion. The company’s net finance cost increased 49.4% YoY to N65.7 billion in FY21, primarily due to Foreign exchange loss of N8.7 billion in FY21 (FY20: 0) and an increase in the average effective interest rate to 10.75% from the 2020 levels 9.67% per annum.
- Consequently, Profit before Tax was reported at N538.4 billion, a 44.2% YoY growth. With a significantly increased effective tax rate to 32.3% in FY21 from 26.0% in FY20, Profit after Tax was reported at N364.4 billion, a 32% YoY growth from N276 billion in FY20. The group earnings per share jumped 31.6% YoY to N21.24 (2020: N16.14) per share. Dangote cement announced a final dividend of N20.00 per share, to be paid to shareholders whose names appear in the Register of Members at the close of business on May 30, 2022.
- Dangote Cement announced the appointment of Ms Halima Aliko-Dangote as a Non-Executive Director with effect from February 26, 2022. Halima Aliko-Dangote is the Group Executive Director (GED), Commercial Operations of Dangote Industries Limited (DIL), one of the largest and most diversified business conglomerates in Africa encompassing manufacturing, Cement, Sugar, Salt, Poly-products as well as Logistics, Oil & Gas and Real Estate.
Market Reaction: Investor reaction to the strong FY21 results was muted as the Dangote Cement stock closed unchanged at N273.50 versus a marginal 0.19% gain for the All-Share Index (1/3).
Dangote Cement Earnings Highlight FY21
Source: Company Financials, FSDH
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