• Business - Companies
  • Updated: July 24, 2020

Dangote Cement Suffers Revenue Loss As Cost Drag Profit Down

Dangote Cement Suffers Revenue Loss As Cost Drag Profit Down

Dangote Cement has released its interim financial statements for the second quarter of 2020, and its all not good news for its shareholders as revenue for the period between April and June declined compared to the corresponding second quarter of last year, AllNews gathered in a recent statement obtained.

The company's Q2 revenue couldn't surpass the corresponding period as it could only generate N153 billion, significantly short when compared to the N158.4 billion revenue it grossed in Q2 2019. The production cost also affected the gross profit, as it increased to N45.8 billion in Q2 this year, from N43.9 billion of 2019 Q2.

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The drop in the revenue and increase in operating cost negatively affected the Company's gross profit, as it stood at N107.2 billion at the end of this year's second quarter, way below the profit of 2019 Q2, which was reported as N114.4 billion. However, in the first six months of 2020, Dangote Cement company recorded N332.3 billion, surpassing the N328.2 billion revenue of 2019 first half (H1), the statement submitted to Nigerian Stock Exchange (NSE) disclosed.

Profit After/Before Tax

A closer look into the financial statement revealed that the company's profit before tax also fell in Q2 2020 when compared to Q2 2019. The profit before tax of this year's Q2 was pegged at N76.8 billion, while that of the corresponding period was put at N88.9 billion. The profit after tax also declined, as the company couldn't surpass the N72 billion generated last year's second quarter, after managing to generate N69.9 billion in three months between April to June.

Dangote Cement Group Wasn't Impressive

Meanwhile, Dangote Cement Group's revenue ended the second quarter of 2020 at N227.6 billion, rising slightly above the N227.5 billion it recorded between April to June 2019. The production cost also increased, jumping from N93.6 billion of last year's Q2, to N98 billion in 2020 Q2.

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The slow growth in revenue and increase in cost of operation sent the gross profit crashing, as it dropped from N133.8 billion of 2019 Q2, to N129.5 billion in this year's second quarter. Aside from the gross profit falling, the profit before tax also declined, as the Group could only record N74.7 billion in Q2 2020, far below the N76.5 billion it reported in Q2 2019.

But Dangote Cement group was able to increase its profit after tax, as it pegged it at N65.5 billion for this year's second quarter, higher than the N58.9 billion it recorded in 2019 Q2.

Factors That Affected Dangote Cement Q2 Revenue

Material consumed (N33 billion Group) (N10.3 billion Company)

Fuel & power consumed (N30.9 billion Group) (N18.5 billion Company)

Royalty (N318 million Group) (N149 million cOMPANY)

Salaries and related staff costs (N8.5 billion Group) (N4.7 billion Company)

Depreciation & amortisation (N15.6 billion Group) (N9.4 billion Company)

Plant maintenance cost (N7 billion Group) (N3.8 billion Company)

Other production expenses (N3.2 billion Group) (N1.2 billion Company)

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