Dangote Cement Share Price Jumps after Dividend Notice

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Dangote Cement Share Price Jumps after Dividend Notice
Aliko Dangote, Chairman, Dangote Group

Dangote Cement Share Price Jumps after Dividend Notice

Pan Africa cement company, Dangote PLC gained in the stock market due to a positive outlook on the company’s future earnings stream. Data from the local bourse showed that its share price grew by 2.2% to N278 over buying interest amidst expectations of dividend payment to shareholders.

But the company shareholders’ profile has reduced after its share buyback program targeted at curbing market Volatility.  An unconfirmed statement from Broadstreet has it that Dangote group plans to list on London Stock Exchange.

The share buyback program aims at obtaining the right share price for listing in London Stock Exchange”, notable Broadstreet analysts told MarketForces Africa.

There have been fluctuations in the company share price movement despite solid earnings records. The market is however weighing the impact of borrowings on net income or distributable income in the short term

Favourable metrics and of course track record of dividend payment history keep the stock attractive. Demand for the stock has been intermittent. In the Nigerian Exchange, (NGX) the Cement Company now ranks behind Tech companies as major market movers.

Dangote Cement has gained steadily in recent times. Analysts said the positioning was driven by expectations of dividend payment after the cement company earnings scorecard for 2022 was released to the market.

In its financial statement, Dangote Cement Plc’s sales were impacted, and price adjustment actually pushed revenue to #1.6 trillion.  While volume sold declined across the Africa market, higher prices helped pushed turnover higher again.

Audited results showed that Africa’s leading cement manufacturer revenue for the period rose by 16.96 per cent from N1.383 trillion in 2021 to N1.618 trillion in 2022.  However, a breakdown of its annual revenue showed that domestic sales in Nigeria amounted to N1.172 trillion.

The audited statement showed that Dangote Cement’s pre-tax profit declined by 2.8% to N523.02 billion from N537.89 billion in 2021. Helped by a significant decline in tax expenses, the company went home with a 4% year-on-year increase in after-tax profit.

The outlook for the cement market remains positive due to deficit housing record in Nigeria. The same goes for other African countries where the cement group plays strong except for the weakening local currencies.

One of the core downsides to Dangote Cement’s performance in the year was its exposure to dollar transactions. The negative impacts of weakening currencies across Africa reduced the size of earnings.

However, a decline in tax expenses helped the day. According to its audited report, net income increased by 4.8% to N381.33 billion from N363.93 billion following reduced tax expenses.

Also, finance cost was way up as the company ramp up borrowings to meet operational and expansion plan. Finance costs grew by 98.41 per cent from N65.707 billion in the corresponding period of 2021 to N130.37 billion.

The group recorded a profit before tax of N52.002 billion and a profit after tax stood of N382.311 billion, while earnings per share stood at N22.27, up from N21.24. Dangote Cement has a production capacity of 51.6 million tonnes per year across 10 countries in Sub-Saharan Africa.

It has integrated factories in seven countries, a clinker grinding plant in Cameroon, and import and distribution facilities for bulk cement in Ghana and Sierra Leone. Dangote Cement Plc. board of directors declared a dividend of N20 with the qualification date slated for 30 March 2023. #Dangote Cement Share Price Jumps after Dividend Notice

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