April 28, 2025/Cordros Report

Dangote Cement Plc (DANGCEM) released its Q1-25 unaudited results on Friday (25 April), reporting an 83.9% y/y increase in EPS to NGN12.29 (Q1-24: NGN6.68). The strong earnings performance was underpinned by a 21.7% y/y rise in revenue alongside a modest cost growth (+1.7% y/y, ex-depreciation).

DANGCEM’s aggregate revenue grew by 21.7% y/y to NGN994.66 billion in Q1-25, driven by a 30.5% y/y increase in average price per tonne to NGN151,417.11, offsetting a 6.7% y/y decline in group volumes to 6.57Mt.

On geographical performance, Nigerian operations revenue grew by 53.7% y/y to NGN696.04 billion (67.6% of total), propelled by a 60.6% y/y increase in average price to NGN158,335.30/t, despite a 4.3% y/y decline in sales volume to 4.40Mt. However, export volumes increased by 21.2% y/y to 320.00Kt, with eight (8) clinker shipments delivered to Ghana and Cameroon. Whereas, in the Pan-African market, revenue fell by 15.4% y/y to NGN322.65 billion (32.4% of total), reflecting a 6.0% y/y price decline to NGN132,234.84/t and a 10.0% y/y drop in volumes to 2.44Mt. Management attributed the slowdown in volumes in the region to post-election disruptions in Senegal and South Africa, as well as liquidity constraints in Ethiopia.

Meanwhile, gross margin expanded by 710bps y/y to 63.9% as the growth in COGS ex-depreciation (+1.7% y/y) lagged revenue growth. Management stated that the slower increase in cost is reflective of cost optimization initiatives, including the increased use of alternative fuels and stable currency trends. Consequently, key cost drivers improved, with energy costs down 2.6% y/y (49.4% of COGS) and raw material costs down 11.3% y/y (24.2% of COGS).

Similarly, EBITDA margin expanded by 854bps y/y to 46.2%, further supported by a modest 4.7% y/y increase in OPEX (ex-depreciation), as stable diesel prices and a shift toward CNG-powered trucks helped moderate haulage expenses (-1.1% y/y | 65.4% of OPEX).

Furthermore, net finance costs declined by 14.1% y/y to NGN96.02 billion, aided by a 192.7% surge in finance income to NGN33.35 billion and a 72.6% y/y reduction in FX losses to NGN17.47 billion, which offset the 87.1% y/y rise in interest expense to NGN110.30 billion.

Finally, profit before tax (PBT) increased by 87.5% y/y to NGN311.97 billion, while profit after tax (PAT) grew by 85.7% y/y to NGN209.25 billion.

Management call on Wednesday (April 30) at 3.00 p.m. Nigerian time. Click here to register.

Comment: Dangote Cement (DANGCEM) delivered robust top- and bottom-line growth, broadly in line with industry peers, primarily driven by higher pricing in Nigeria despite softer volumes across both domestic and Pan-African operations. The strong earnings performance also reflects the company’s effective cost-saving initiatives, including increased adoption of alternative fuels and raw materials, as well as lower distribution expenses. Looking ahead, we expect the earnings momentum to remain resilient, supported by upward price adjustments and continued cost optimisation efforts. Additionally, a recovery in volumes, particularly in the Pan-African market, might further drive performance, contingent on an improvement in political stability and liquidity conditions across key markets. Our estimates are under review.