Earnings Update: Dangote Cement Plc Q3 2024 – Volume Recovery in Nigeria Market, but Net Finance Costs Weigh on Profitability.

Event

Dangote Cement Plc (“the Group”) sustained its revenue growth momentum in Q3 2024, recording a 42% year-on-year rise to N800.52 billion (Q3 2023: N563.77 billion). Management attributed this growth to strong volume growth from Nigeria market, enhanced pricing and translation gains from the Pan-Africa market.

The Nigeria market posted robust topline growth, as intensified promotional activities and improved route to market resulted in a 7% volume growth to 4.17Mta. Additionally, to mitigate the impact of inflationary pressure on input cost, price increases were implemented. These factors resulted in a 72% revenue surge to N540.10 billion (Q3 2023: N314.54 billion).

In contrast to the Nigeria market, the Pan Africa Market reported a 7% decline in volume, largely due to unfavorable weather conditions, particularly in Tanzania. Nonetheless, an improved pricing mix, and translation gain drove a 14% revenue growth to N286.50 billion (Q3 2023: N251.85 billion).

Outlook

Revenue growth is anticipated to continue throughout the end of the year, fueled by sustained volume rebound in Nigerian market, and strategic price adjustments. However, our profitability outlook for FY 2024 is tempered by cost pressures and  currency depreciation in most of its operational countries.

Our fair value now stands at N433.81 (previously: N511.52), implying a 9% discount to the current market price of N478.80. Nonetheless, we retain our HOLD recommendation for the stock.

Please follow the link “Dangote Cement Plc Q3 2024 – Volume Recovery in Nigeria Market, but Net Finance Costs Weigh on Profitability” to view the whole report.

Thank you.