Shareholders Endorse Dangote Cement Expansion, Approve Dividend | Independent Newspapers Limited
Newsletter subscribe

Stock Market Report

Shareholders Endorse Dangote Cement Expansion, Approve Dividend

Posted: Apr 20, 2016 at 3:00 am   /   by   /   comments (0)

As returns from African projects lifted the earnings and profits of the company, shareholders of the Dangote Cement Plc have endorsed the pan African expansion of the company and urged the management to make a foray into other countries in a bid to make the company the foremost cement manufacturer in the world.

The endorsement came just as the Chairman of the company, Aliko Dangote at the annual general meeting of the company held in Lagos assured the shareholders that the company would continue to deploy strategies that would increase profitability in spite of the prevailing harsh operating climate.

He explained that with the measures put in place, the foreign exchange volatility would not affect the operations of the company significantly more so when its other African plants are operating maximally and yielding positive results to cushion the effect of the scarce foreign exchange at home.

He said the company has good strategy in place and the volatility of the foreign exchange will not affect the operations of company.

Dangote in his statement to the shareholders said Africa is rapidly developing that the United Nations estimated that its population would rise from about one billion now to 2.4 billion in 2050 with the urbanised population rising from 400 million, to 1.4 billion, which will be more than four times the current population of the United States.

“To support this growth, countries must invest in infrastructure and housing. The World Bank estimates that Africa needs to invest $337 billion a year on new infrastructure in power, roads, transport, and water and then spend a further $35 billion a year on operations and maintenance. This indicate the size of opportunity for a cement manufacturer operating in Africa”, Dangote said.

Dangote said, the company has achieved significant progress in becoming a truly pan-African manufacturer and distributor of cement.

“We began the year with three factories in Nigeria, a small import operation in Ghana and several building sites across Sub-Saharan Africa. As a result of the sizable investments that we have made over the past few years, Dangote Cement ended the year with new lines in Nigeria, factories becoming operations in Senegal and South Africa,” he said.

He also added: “As a result of all these initiatives, I believe our company is well on its way to be a global and respected force in cement production, operating efficient plants in exiting growth markets that will generate substantial returns for shareholders for many years to come.”

The company boss noted that the market opportunities opened to the cement company became apparent upon the opening of its plants in Senegal, Cameroon, Ethiopia, and Zambia, adding that though the countries already had established cement companies but that Dangote cement became successful immediately due its quality products and competitive prize.

One after another, the shareholders expressed their satisfaction at the management style of the company which has continue to increase its earnings and profitability at a time its competitors and other companies are struggling to stay afloat, due to the inclement operating climate.

They specifically lauded the disposition of the company Chairman, Aliko Dangote to creating wealth and jobs for the teeming populace, noting that about five of Dangote in Africa would have turned the continent to a developed one to the envy of others.

The company announced a profit after tax of N181.3 billion for the financial year ended Dec. 31, 2015 while profit after tax grew by 13.7 per cent.

Accordingly, the firm is paying N8 per share as dividend to the amazement of the shareholders.

Highlights of the result showed that revenue up by 25.6 per cent to 491.7 billion as new plants perform strongly across Africa. Earnings before interest, taxes, depreciation and amortization (EBITDA) went up by 17.5 per cent to 262.4 billion at 53.4 per cent margin.

This showed that all plants are profitable across Africa as earnings per share appreciated by 15.2 per cent to 10.86. Also, dividend went up by 33.3 per cent to 8 per share at 73.7 per cent payout ratio.

Group cement volumes rose by 35 per cent to nearly 19 million tonnes, price reduction drives strong rebound in Nigerian market in the fourth quarter as volumes up 36 per cent and full-year volumes up 3.2 per cent despite severe economic challenges.