October 29, 2026/Cordros Report
DANGCEM published its Q3-26 unaudited results at the close of business (27 October), reporting EPS of NGN20.15 (+54.0% y/y), bringing 9M-26 EPS to NGN58.37 (+33.2% y/y). Earnings growth was supported by revenue growth of 16.4% y/y, a 128bps y/y expansion in EBITDA margin to 45.9%, and a 98.9% y/y decline in net finance costs.
DANGCEM’s aggregate revenue increased by 16.4% y/y in Q3-26 (9M-26: +19.6% y/y), driven by favourable pricing and volume dynamics. Specifically, average realised price rose by 11.1% y/y to NGN175,135.63/tonne (9M-26: +9.4% y/y to NGN170,493.20/tonne) and group sales volumes increased by 4.7% y/y to 7.20 million tonnes (9M-26: +9.4% y/y to 22.14 million tonnes) thus supporting the outturn. On a quarter-on-quarter basis, revenue declined by 4.2%, reflecting a 3.7% q/q decline in volumes alongside a marginal 0.6% q/q dip in realised price. The sequential volume decline was driven by Nigeria, which we attribute to the seasonal rainfall typically seen in Q3.
On a regional basis, Nigerian operations remained the primary growth driver, with revenue increasing by 19.4% y/y and accounting for 67.1% of group revenue (9M-26: +23.2% y/y). The performance was driven by a 14.5% y/y increase in average realised price to NGN198,573.76/tonne (9M-26: +15.1% y/y to NGN190,017.43/tonne), alongside a more modest 2.3% y/y increase in sales volumes to 4.36Mt (9M-26: +6.4% y/y to 14.06Mt). We attribute the volume growth to increased government infrastructure projects, housing development and a stronger private sector project pipeline. Export performance also remained strong, with clinker and cement exports growing by 41.8% y/y to 1.5Mt in 9M-26, further supporting volume growth.
Similarly, Pan African operations reported revenue growth of 10.7% y/y, contributing 32.9% of group revenue (9M-26: +12.6% y/y). Revenue growth was supported by a 5.5% y/y increase in sales volumes to 3.10Mt (9M-26: +14.0% y/y to 9.05Mt) and a 4.9% y/y increase in average realised price to NGN133,575.25/tonne (9M-26: -1.2% y/y to NGN131,430.02/tonne). Pan African figures are reported in naira, and the stronger naira against most Pan African currencies reduced the translated value of revenue and realised prices, which means underlying growth in local currency terms was higher than reported. The 9M-26 volume performance was largely supported by Ethiopia (+18.8% y/y), Senegal (+29.9% y/y) and Tanzania (+9.2% y/y), alongside the ramp up of the newly commissioned Côte d’Ivoire grinding plant (529.2Kt), which more than offset volume declines in Cameroon (-9.8% y/y), Ghana (-10.1% y/y) and South Africa (-6.1% y/y).
Gross margin expanded by 316bps y/y to 63.2% in Q3-26 (9M-26: +400bps y/y to 63.2%), reflecting the slower growth in cost of sales (+7.1% y/y) relative to revenue (+16.4% y/y). The increase in COGS was primarily driven by higher raw material costs (+43.8% y/y; 27.2% of COGS), alongside an 11.5% y/y increase in staff costs (9.1% of COGS). Energy costs remained the largest component of COGS at 42.3% and rose by 7.8% y/y in Q3-26, while growing by only 2.0% y/y in 9M-26, reflecting a favourable energy mix and increased use of alternative fuels. Lower plant maintenance costs (-30.0% y/y) and other production expenses (-20.2% y/y) also supported margins during the quarter.
EBITDA margin expanded by 128bps y/y to 45.9% (9M-26: +154bps y/y to 46.8%), despite an 18.3% y/y increase in operating expenses. The increase in OPEX was primarily driven by haulage expenses (+19.8% y/y; 56.1% of OPEX) and staff costs (+15.9% y/y; 12.4% of OPEX). We attribute the increase in haulage expenses to higher fuel prices, although the impact was partly mitigated by the deployment of CNG trucks, including 500 units commissioned in Tanzania. On a regional basis, EBITDA margin performance was mixed. Nigerian EBITDA margin declined by 131bps y/y to 59.1% (9M-26: +58bps y/y to 59.8%), primarily reflecting lower other income, mainly government grants (NGN11.85 billion vs NGN21.67 billion in Q3-25). Excluding other income, the margin was broadly stable at 57.5% (+17bps y/y). Pan African EBITDA margin expanded by 466bps y/y to 21.7% (9M-26: +2bps y/y to 19.1%).
Elsewhere, net finance costs declined sharply by 98.9% y/y to NGN1.12 billion, primarily reflecting an 86.4% y/y reduction in interest expense to NGN9.17 billion and a swing to a net FX gain of NGN4.27 billion (net FX loss of NGN46.87 billion in Q3-25). The decline in interest expense was driven by continued debt repayment, which reduced total debt by 59.0% y/y to NGN541.53 billion (Q3-25: NGN1.32 trillion) and moved the group to a net cash position of NGN51.14 billion, alongside NGN30.96 billion of borrowing costs capitalised to qualifying assets during the quarter. In 9M-26, net finance costs declined by 53.6% y/y to NGN96.98 billion.
Overall, profit before tax (PBT) grew by 57.9% y/y to NGN491.12 billion, driven by strong operating performance and significantly lower finance costs. However, a tax charge of NGN154.86 billion, equivalent to an effective tax rate of 31.5% (Q3-25: 28.3%), limited the earnings benefit, with profit after tax (PAT) increasing by 50.9% y/y to NGN336.26 billion. For 9M-26, PBT and PAT grew by 41.5% y/y and 31.2% y/y, respectively.
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Comment: DANGCEM delivered a strong earnings performance in Q3-26, underpinned by robust pricing in its Nigerian operations and a sharp reduction in finance costs, as continued debt repayment moved the group to a net cash position. Looking ahead, we expect revenue momentum to remain supported by resilient pricing in Nigeria and a seasonality effect, with lower rainfall favouring construction activity, alongside continued volume growth across key Pan African markets. Our estimates are under review.
