Dangote Cement turns to exports as earnings face pressure in 2016

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Nigeria: Dangote Cement’s earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 2% year-on-year to US$817m in 2016 from US$834m in 2015. However, its sales revenue rose by 25.1% to US$1.95bn from US$1.56bn and its sales volumes of cement rose by 25% to 23.6Mt from 18.9Mt. The cement producer reported a particular increase in sales volumes, revenue and earnings outside of Nigeria and it said that its export sales have turned Nigeria into a net exporter.

“We exported nearly 0.4Mt into neighbouring countries and in doing so, we achieved a great milestone by transforming Nigeria into a net exporter of cement. This is a remarkable achievement, given that only five years ago, Nigeria was one of the world’s largest importers, buying 5.1Mt of foreign cement at huge expense to our balance of payments. We will increase our exports substantially in 2017,” said chief executive officer Onne van der Weijde. He added that despite some local and temporary disruptions in Ethiopia and Tanzania, the cement producer strengthened its market share in every country. Operations are also due to start in the Republic of Congo and Sierra Leone in 2017.

By region, Nigeria’s economy entered into a recession in 2016. Dangote Cement increased its domestic sales volumes by 11.1% to 14.8Mt from 13.3Mt, although it said that its fourth quarter was hit by a price increase in September 2016. Despite the poor economic situation in the country it said that overall cement sales grew by 5.7% in 2016. Outside of Nigeria it increased its cement volumes by 54% to 8.64Mt from 5.61Mt, aided by the opening of a plant in Tanzania.

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