Industrial firm Dangote Cement posted a significant rise in profit in 2021, with nearly a third increase in the bottomline, boosted by an unprecedented turnover that rose to N1.4 trillion from the N1 trillion declared in 2020.
Africa’s biggest cement manufacturer upped production volume from 24.7 million to 28.5 million in the period under review to strengthen performance, according to its audited financials issued on Monday.
It also turned to good use the elevated price of cement in the Nigerian market, where the product sells some 240 per cent higher than the global average, according to industry data, even though the country’s production capacity was 47.8 million as of last April about the same time annual demand was about 20.7 million.
Rival Lafarge Africa, which also benefited in no small measure from the steep pricing, Tuesday announced a jump in profit by 66.1 per cent for the same period.
Dangote Cement’s pre-tax profit rose to N538.4 billion from N373.3 billion while its after-tax profit stood at N364.4 billion, 32 per cent more than that of the previous year.
Controlled by Africa’s wealthiest man Aliko Dangote, the cement-maker was handed a ten-year tax incentive from the Nigerian government in 2017 in exchange for helping some of the country’s thoroughfares and interstates, with tax credits to the firm reaching N22.3 billion as of April last year.
“The carrying amount of ₦162 billion representing the company’s investment in subsidiaries is significant,” independent auditor KPMG said in its report
“Some of the subsidiaries are currently loss-making and are dependent on financial support mostly in the form of loans and advances from the parent company for their ongoing operations,” the consultancy added, raising fears about how much of the sum is recoverable.
Nigeria contributed approximately 72 per cent of Dangote Cement’s sales for last year, according to its earnings report. The rest came from its pan-African operations.