Dangote Cement Plc, BUA Cement Plc and Lafarge Cement Plc recorded a combined net profit of N536.969 billion in the full year ended December 31, 2022.
Despite the harsh operating environment in 2022, the three companies profit-after-tax rose by 6.22 per cent from N505.522 billion in 2021 to N536.969 billion in 2022.
Meanwhile, Dangote Cement, Nigeria’s largest producer and the second most capitalised firm on the NGX, reported net profit of N382.311 billion in 2022 from N364.439 billion in 2021, while revenue for the period rose by 16.96 per cent from N1.383 trillion in 2021 to N1.618 trillion in 2022.
Also, BUA Cement posted a profit-after-tax of N101.011 billion as against N90.079 billion in 2021, while Lafarge Africa declared a net profit of N53.647 billion, higher than N51.004 billion achieved in 2021.
Capital market analysts noted that players in the cement sub-sector recorded strong financial performances in 2022, with earnings expanding on the back of industry-wide price increases amid moderation in sales volume growth.
They attributed the higher cement prices to the surge in input costs (energy and raw materials costs), exacerbated by the simultaneous impact of the Russia-Ukraine conflict and foreign exchange issues, as manufacturers had to pass on costs to customers.
“However, on sales volume growth, cement producers were unable to maximise their capacities as production levels came under pressure due to energy supply disruption, severe power outrages due to national grid shutdowns, and heavy rainfall in Q3, 2022, which influenced slower demand from customers during the period,” they stated.
The chairman of the company, Aliko Dangote recently said, “Over the last decade, Dangote Cement has recorded exponential growth across all areas. Group volumes are now at almost 30Mta, our capacity has tripled to 51.6Mta and we export cement from five countries across Africa.
“As the volatile global environment propels us into a new era of uncertainties, we are fortunate that the last two years have taught us resilience, adaptability and grit. These values are what we need to face unpredictable times in the future.
“Dangote Cement remains the leading cement company in Africa, well-positioned for a positive and sustainable future. We are resolute in transforming Africa, while creating sustainable value for our stakeholders. I am confident that we are well equipped for our next growth journey.”
For Lafarge Cement, CEO, Khaled El Dokani said, “In 2022, we recorded 27.3 per cent and 29.3 per cent improvement in net sales and recurring EBIT respectively, compared to full year 2021 results. The worsening exchange rate situation led to revaluation losses, thereby constraining our net income growth to 5.2 per cent.
“We remain committed to our sustainability ambitions by utilising affordable clean energy in our operations and optimising our green logistics strategy; among other initiatives that are in alignment with our net zero pledge journey,” he added.
On the 2023 outlook, Lafarge Africa said, “It expects good demand momentum in 2023, albeit moderated due to the impact of the general elections. It plans to continue to maximize volume opportunities across their markets and actively manage their costs.
“Listed on the Premium Board of the Nigerian Exchange Group, Lafarge Africa is actively participating in the urbanisation and economic growth of Nigeria, the largest economy in Africa. In 2023, it expects to consolidate its efforts on sustainability.”
Volume drivers for 2023, analysts at CardinalStone Partners said that the FG’s Road Infrastructure Tax Credit (RITC) scheme will likely continue supporting cement volumes in 2023, saying the impact of the RITC on cement demand stems from the fact that most of the contracted roads would require concrete bridges, pavement dividers, and gutters.