Vetiva Projects Higher Revenue, Profit for Dangote Cement in 2020

Investment bank Vetiva Capital Management Limited projects Dangote Cement Plc to continuously record growth despite the competitive market.

Vetiva added that the group consistently maintained its domestic market share in 2019, which might help the group post two% year-on-year(y/y) growth in 2020. 

The investment bank added that in 2019, the Dangote Cement group’s revenue fell by one% to N892 billion and Nigeria’s top-line was driven by a 1% y/y drop in average revenue/ tonne to N43,221.69 even as volumes stayed largely flat y/y. 

according to the report, "the pan African revenues remained flat in 2019, following the weak pricing in Senegal and Zambia offset strong volume ramp-ups in Tanzania (94% up y/y) and Senegal (2% up y/y). 

"In expectation, Vetiva projects the volume growth in Tanzania, Senegal, Congo, and Sierra Leone to be 10% y/y growth in Pan African revenue in 2020,” the investment bank said.

Speaking on the report, the Industrial Goods Analyst at Vetiva Capital Management Limited, Onyeka Ijeoma said that the group, in its 2019 figures, reported earnings, before interest, taxation, depreciation, and amortization (EBITDA) falling 9% y/y to N395 billion, translating to an EBITDA margin of 44%.

In the light of this development,  FY’19 results, Vetiva revised some proposed 2020 yearly earnings, adding that the revenue is presumed to be N934 billion (+5 y/y), with the Nigerian business accounting for 67%. 

Vetiva has conclusively said that the cement maker is expected to post a profit after tax of N207 billion.