Weakness in Domestic Market led revenue decline: Dangote Cement Plc.’s (DANGCEM) Q1:2019 group revenue slipped by 0.81% YoY to NGN240.16bn (vs. NGN242.12bn in Q1:2018). Despite a YoY marginal increase of 0.55% in volume, Nigerian revenue declined by 2.31% to NGN169.89bn, from NGN173.91bn in Q1:2018. We believe this largely reflects the impact of trade discounts on the average price in the Nigerian market and competitive pressure from the entrance of 1.5Mta Kalambaina plant which has commenced substantial ramp-up. On the other hand, Pan-African revenue witnessed a 4.82% volume growth that translated into revenue growth of 2.50% to NGN70.27bn. Key positive developments in Pan-African volumes include; 49.0% growth in Congo, which was supported by the introduction of 32.5R new grade cement & opening of new depots, 19.2% growth in Ethiopia, which was driven by retail sector demand, 78% growth in Sierra Leone as a result of increased sales and marketing activities, and 127% growth in Tanzania in the aftermath of the use of gas as opposed to LPFO in Q1:2018. Growth in the Pan-African markets, however, continue to be subdued by security challenges in Cameroon (-10.0%), insufficient cement supply to Ghana import terminal (-39.0%), and economic slowdown and price competition in South Africa (-19.0%). Kindly find attached the full report.
Earnings Update- DANGCEM: Q1 2019.
Weakness in Domestic Market led revenue decline: Dangote Cement Plc.’s (DANGCEM) Q1:2019 group revenue slipped by 0.81% YoY to NGN240.16bn (vs. NGN242.12bn in Q1:2018). Despite a YoY marginal increase of 0.55% in volume, Nigerian revenue declined by 2.31% to NGN169.89bn, from NGN173.91bn in Q1:2018. We believe this largely reflects the impact of trade discounts on the average price in the Nigerian market and competitive pressure from the entrance of 1.5Mta Kalambaina plant which has commenced substantial ramp-up. On the other hand, Pan-African revenue witnessed a 4.82% volume growth that translated into revenue growth of 2.50% to NGN70.27bn. Key positive developments in Pan-African volumes include; 49.0% growth in Congo, which was supported by the introduction of 32.5R new grade cement & opening of new depots, 19.2% growth in Ethiopia, which was driven by retail sector demand, 78% growth in Sierra Leone as a result of increased sales and marketing activities, and 127% growth in Tanzania in the aftermath of the use of gas as opposed to LPFO in Q1:2018. Growth in the Pan-African markets, however, continue to be subdued by security challenges in Cameroon (-10.0%), insufficient cement supply to Ghana import terminal (-39.0%), and economic slowdown and price competition in South Africa (-19.0%). Kindly find attached the full report.