Earnings Update: Dangote Cement Plc FY 2024 – Borrowing Costs Temper Profitability

Event

Dangote Cement Plc (“the Group”) reported strong revenue growth across both the Nigerian and Pan African market, cumulatively resulting in a 62% year-on-year increase to N3.58 trillion (FY 2023: N2.21 trillion).

The Nigerian market maintained its dominance as the Group’s primary revenue driver, with a 69% surge to N2.19 trillion (FY 2023: N1.30 trillion), fueled by volume growth and price increase. Volume grew by 7% to 17.68 Mta (FY 2023: 16.39 Mta), supported by enhanced promotional activities and an optimised route-to-market strategy.

The Pan-African market recorded a 60% revenue growth, reaching N1.48 trillion (FY 2023: N925.93 billion). However, this growth was largely driven by favorable pricing adjustments and foreign exchange translation gains, rather than volume expansion. Sales volume declined by 1% to 11.13 Mta (FY 2023: 11.25 Mta), reflecting operational challenges across key markets.

Outlook

We project a 26% revenue growth in 2025, driven by stronger performance in both the Nigeria and Pan-Africa markets. In Nigeria, the improving economy and a potential decline in interest rates – which would enhance access to capital, could stimulate construction activity in the private sector. Additionally, the government’s planned capital expenditure in the 2025 budget may further boost demand in the cement sector. As the leading player in the Nigeria cement sector, Dangote Cement Plc is well positioned to benefit from the positive outlook for the sector.

We expect volume growth in the Pan-African market to recover as the temporary factors that constrained performance in 2024 is expected to ease.

Valuation

We retain our HOLD recommendation for the stock, with a revised fair value of N457.55 (previously: N433.81). This valuation reflects our improved optimism for the Group’s prospect for 2025 and was derived using a blend of discounted cash flow (DCF), discounted dividend model (DDM), residual income (RIM), and enterprise valuation (EV/EBITDA) methodologies.

Please follow the link “Dangote Cement Plc FY 2024 – Borrowing Costs Temper Profitability” to view the whole report. 

Thank you.