July 28, 2025/Cordros Report
DANGCEM published Q2-25 unaudited results on Friday (25 July), reporting a 303.5% y/y surge in EPS to NGN18.45, driven by a 39.6% y/y increase in operating profit and a sharp 96.5% y/y decline in net finance costs. Consequently, H1-25 EPS rose by 173.1% y/y to NGN30.74 (H1-24: NGN11.26), surpassing 2024FY EPS of NGN29.74.
DANGCEM’s aggregate revenue grew by 14.2% y/y to NGN1.08 trillion in Q2-25 (H1-25: +17.7% y/y to NGN2.07 trillion), supported by a 15.9% y/y increase in the average price per tonne to NGN158,466.60/t, which offset a 1.4% y/y decline in group volumes to 6.80 million tonnes (Mt). On a quarter-on-quarter basis, group revenue advanced by 8.3%.
On a regional basis, Nigerian operations delivered strong performance, with revenue rising by 38.6% y/y to NGN746.28 billion, accounting for 66.6% of total revenue. This growth was driven primarily by a 33.9% y/y increase in the average cement price to NGN163,838.42/t, alongside a modest 3.5% y/y increase in sales volume to 4.56Mt. In contrast, revenue from Pan-African operations declined by 15.6% y/y to NGN359.47 billion (33.4% of total revenue), reflecting an 8.2% y/y drop in average cement price to NGN140,528.15/t and an 8.1% y/y decline in volumes to 2.56Mt. Management attributed the weaker performance in Pan-Africa to post-election disruptions in Senegal and South Africa, as well as ongoing liquidity challenges in Ethiopia.
Meanwhile, gross margin expanded by 441bps y/y to 63.5% (H1-25: +567bps to 63.7%), as cost of sales (ex-depreciation) rose by just 1.9% y/y, lagging topline growth. We attribute the slower increase in COGS to the increased use of alternative fuels & raw materials, lower energy costs, and relative FX stability. Consequently, raw material costs fell 21.4% y/y, accounting for 20.5% of COGS, while energy costs—comprising 53.4% of COGS—grew moderately by 8.8% y/y.
Similarly, the group EBITDA margin expanded by 714bps y/y to 44.9% in Q2-25 (H1-25: +781bps y/y to 45.6%), even as operating expenses (ex-depreciation) increased by 10.9% y/y to NGN224.22 billion. Notable drivers of OPEX included higher staff costs (+13.9% y/y), CSR spending (+10.1x y/y), and other operating expenses (+74.2% y/y). Importantly, we highlight that haulage expenses, which account for 57.6% of OPEX, declined 7.0% y/y, reflecting both the impact of stable diesel prices and the increased deployment of CNG-powered trucks.
Elsewhere, net finance costs declined by 96.5% y/y to NGN6.88 billion, buoyed by a 154.9% y/y rise in finance income to NGN34.16 billion and a NGN63.21 billion FX gain, which offset the 46.2% y/y rise in interest expenses (NGN104.18 billion). In H1-25, net finance costs declined by 66.6% y/y to NGN102.91 billion.
As a result, profit before tax rose by 230.3% y/y to NGN418.06 billion, while profit after tax jumped 303.0% y/y to NGN311.21 billion, following a tax charge of NGN106.85 billion.
Management call on Thursday (July 31) at 3.00 p.m. Nigerian time. Click here to register.
Comment: DANGCEM’s Q2-25 topline performance remained solid, supported by strong pricing across its markets, particularly in Nigeria, which offset the muted volume growth, especially in the Pan-African segment. Meanwhile, earnings growth was even more pronounced, driven by a combination of disciplined cost control, margin expansion, and a decline in net finance costs. Looking ahead, we expect topline growth to be sustained through further price adjustments, while earnings momentum is expected to remain resilient, supported by ongoing cost optimisation efforts and favourable input cost dynamics. Our estimates are under review.
