Below is a detailed overview of Dangote Cement’s performance during the first half of 2023 (H1:2023).

Higher Revenue Riding on Pricing Strategy 

Dangote Cement Plc. recently released its H1:2023 financial results, depicting a 17.67% Year-on-Year (YoY) growth in revenue to NGN950.83bn. This is amid a decline (-5.53% YoY to 13.4Mt) in sales volume during the period. We opine that the increase in revenue is associated with a strategic upward price review by the company’s management.

We believe the management will sustain revenue growth through strategic pricing and improved sales volume.

Net Exchange Loss on Foreign Denominated Transactions Erodes Profits

Net Exchange loss on foreign denominated transactions spiked 179.47% YoY to NGN113.63bn in H1:2023 (vs. NGN40.66bn in H1:2022). This is following the FX liberalization policy enacted by the new administration in Nigeria. For context, its Q2:2023 stand-alone financial statement revealed a 362.79% YoY Jump in net exchange loss on foreign denominated transactions to NGN103.84bn in Q2:2023. Consequently, Profit Before Tax (PBT) declined by 9.45% YoY to NGN239.86bn in H1:2023 while Profit After Tax (PAT) grew marginally by 3.78% YoY to NGN178.60bn in H1:2023.

Barring any further significant Naira devaluations, Dangote Cement would continue to keep posting decent performance. Hence, we maintain our target price of NGN348.34.

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