Africa’s top cement producer, Dangote Cement, has related its results for the first quarter of 2023, which reveals a decrease in volumes.
According to Nairametrics, a Nigerian business publication, similar to the 2022 period when generated incomes were N321.9 billion, Dangote Cement recounted a drop to N280.3 billion in the first quarter of this year. This, is said to be the first sales decline in five years, owing to the negative impact of poor government policies on firms.
The company has always presented generated income increase from year to year and quarter to quarter in the aspect of expenditure strength on building and infrastructure. The first quarter of every year since 2019 has witnessed sales increase for five straight quarters for the company.
Nevertheless, domestic issues like disorderly election and cash crunch decelerated facility spending.
The Cement producing company’s sales by Nigerian operations dropped by 24.6% in the first quarter of this year from the 4.8Mt sold in the first quarter of 2022 to 3.6Mt. Roughly 58% of the set volume shipped are to the Nigerian market, down from 66.7% at the same time in 2022. Also, 69% of the group’s generated incomes are from organisations in Nigeria, down from 78% at the same time in the previous year.
Furthermore, the group’s total manufacturing cost soared to N163.6 billion from N154.1 billion during the same period last year as administrative costs shot up to N87.3 billion by 12.5%.
The 6.2% increment in production costs was attributed to inflation by the company while administrative costs increase was caused by higher goods transportation costs and AGO costs. It was also stated that devaluation is another cause of price pressure.
In total, the cement producing EBIDTA reduction results in a 45.7% decline similar to the period in 2023.
Arvind Pathak, the CEO of Dangote Cement, in his speech stated that in the course of fulfilling their dedication to generating more value for their shareholders, the company has gotten regulatory sanction for their second repurchase program and there will be continuous monitoring of the transforming business environment and state of the market in making decisions on sections of the share repurchase program.
In spite of the difficulties, the company stated that it has proceeded to spot ability as a result of the increasing need for cement by the nation which has hastened their struggle to elevate their local ability in Nigeria from 35.25Mta to 41.25Mta.