Research and Analytics
Research and Analytics
Although revenue declined, we note that the cost of sales surged during the period. Specifically, cost of sales was N103.94 billion compared to N70.65 billion recorded in the corresponding period of 2019. This was due to 95% increase in operational and maintenance expenses (N23.56 billion) and 59.4% increase in depletion, depreciation and amortisation (N33.75 billion).
Gross profit grew by 13.6% compared to the corresponding period of 2019. The gross profit growth is however slow due to the fact that the growth in cost of sales was more than the growth in revenue. While revenue grew by 13.6% y/y, the cost of sales grew by 28.8%. Hence, gross profit printed N71.73 billion.
With profit after tax increasing by 16.7% and earnings per share declining by 30.8%, then we suspect the decline must have been due to the listing of additional shares during the year.
In the first 9 months of 2020, Dangote Cement (DANGCEM) plc was able to grow its revenue by 12% on the basis of solid production volume (+5.6% y/y to 18.40 million tonnes) with an overall effect on sales volume (+6.6% y/y to 19.21 million tonnes).
