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DANGCEM OUTPERFORMS OTHERS IN GROSS PROFIT MARGIN AT 60.4 %

Although all three major players in the cement industry had gross profit margins higher than 25%, Dangote Cement led the pack with 60.54%. Dancem was followed by , BUA Cement with 46.64%, and Lafarge Africa trailing behind at 29.18%.

 Dangote’s 9month 2021 result shows double-digit revenue growth, despite a difficult macroeconomic environment. The Group has demonstrated resilience in its operations which has translated to significant improvement in its earnings.

 Dangote Cement recorded 10.57 behind BUA Cement’s 83.30 interest coverage ratio. An interest coverage ratio of 83.30 may suggest that the company was not using its borrowings efficiently. Lafarge Africa posted 8.55 in interest coverage.

 The average Asset turnover ratio for the cement industry was 0.40x for the period; DANGCEM and Lafarge Africa recorded figures above industry average, while BUA Cement was below the industry average.

Lafarge Africa recorded the lowest leverage ratio; this does not come as a surprise as the company’s total debt stock has been on a steady decline in recent times. Dangote Cement’s share buy-back program suggests that the company’s cost of debt would be lower than its cost of equity. The higher cost of equity explains the company’s decision to resort to large unsecured commercial paper (CP) financing

 Dangote Cement Plc is the  second listed company on the Nigerian Exchange Limited (NGX) to record a revenue of N1trn on the heels of MTN, the leading stock with over one trillion Naira (SWOOT) in turnover. Dangote’s 9month 2021 result shows double-digit revenue growth, despite a difficult macroeconomic environment. The Group has demonstrated resilience in its operations which has translated to significant improvement in its earnings.  

 A  t review of the company, showed that gross profit margin was a major driver of the Company’s rising equity return (ROE). With the limestone crusher’s share buyback programme (in other words, repurchase), leading to a reduction in its market free float, the company’s earnings per share (EPS) is expected to rise notably  by the year-end December 31, 2021.

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