April 29, 2025/InvestmentOne Report

Dangote Cement Plc delivered an impressive performance in Q1:2025, with revenue rising by 21.69% YoY to NGN994.66bn, majorly driven by price increases as group sales volume declined by 6.72% YoY to 6.57 million metric tonnes. Production cost of sales edged up modestly by 2.29% YoY to NGN407.27bn, due to increases in plant maintenance cost (+53.14% YoY to NGN49.68.40bn), depreciation & amortization (+6.95% YoY to NGN48.24bn), other production expenses (+2.33% YoY to NGN28.36bn) and royalty payments (+87.35% YoY to NGN1.20bn).

Meanwhile, major cost drivers including materials (-11.35% YoY to NGN87.06bn), fuel & power consumed (-2.57% YoY to NGN177.19bn) posted declines following the reduction in production volumes. Gross margin expanded by 777bps on annual basis to 59.05%.

Dangote Cement Plc remains well-positioned for growth, supported by its strong market leadership, capacity expansion and pricing strategy. Its export strategy across Africa is expected to provide foreign exchange earnings that could help mitigate currency depreciation risks.

While macroeconomic uncertainties persist, we believe Dangote Cement s strategic market dominance and strong fundamentals, will enable it to maintain steady earnings growth in the year. We therefore place an OVERWEIGHT rating on DANGCEM.

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