Dangote Cement, 22 Blue-chip Firms Generated N8.11tn Revenue in H1

Dangote Cement followed by MTN Nigeria Communication Plc and BUA Foods Plc topped others in revenue generation.

Dangote Cement Plc and 22 other firms defied macro economic challenges to generate about N8.11 trillion revenue in the half year (H1) ended June 2024, about 68 per cent increase when compared to N4.83 trillion reported in the corresponding period of 2023.

The other 22 firms are made up of telecommunication, agro-allied, cement manufacturing, power generating, oil & gas, Fast-Moving Consumer Goods (FMCG) companies, among others.

An independent investigation by THISDAY revealed that the firms grew revenue significantly amid a double-digit inflation rate that has led to a hike in cost of food and services across the country.

But the cost of operation and foreign exchange loss weaken profit generation and posed a threat on their 2024 financial result and accounts.

Companies operating in Nigeria have been bedevilled by low purchasing power amid hike inflation that spread across Africa, weakened naira, insecurity and bad road networks that prolonged delivery of goods and services across the country.

In the period under review, Dangote Cement followed by MTN Nigeria Communication Plc and BUA Foods Plc topped others in revenue generation.

The breakdown showed that Dangote Cement reported revenue of about N1.76 trillion in H1 2024, about 85 per cent increase from N950.83 billion reported in H1 2023, while MTN Nigeria reported N1.54 trillion revenue in H1 2023, representing an increase of 33 per cent from N1.16 trillion in H1 2023.

Commenting on the results, the Chief Executive Officer, Dangote Cement, Arvind Pathak in a statement said: “We effectively navigated macroeconomic headwinds to deliver positive results in the first half of the year. Group volumes were up 3.8 per cent, with our Nigeria operations achieving double-digit volume growth of 10.9 per cent. This growth was driven by improved efficiency across our operations and supported by increased market activity levels compared to the election year and cash crunch in 2023.

“Despite the challenges of elevated inflation, high borrowing cost and a further weakening of the currency in the first six months of the year, our business demonstrated strong resilience. This was due to our rigorous focus on cost minimisation and our diversified business model.

“Group revenue and EBITDA rose 85.1per cent and 50.3per cent to N1,760.1 billion and N666.2 billion, respectively. Our PAT reached N1,89.9 billion, marking a 6.3 per cent increase. I am pleased with the performance of our business, as key financial indicators are showing positive trends.

“By leveraging our robust export-to-import strategy, Dangote Cement completed 14 shipments of clinker from Nigeria to Ghana and Cameroon. This effort resulted in a 55.2per cent surge in our Nigerian exports, underscoring our commitment to fostering African self-sufficiency.”

For MTN Nigeria, the CEO of the telecommunication giant, Mr. Karl Toriola stated that the H1 2024 results underlined operating performance despite macro headwinds and foreign currency impacts.

“The macroeconomic conditions in Nigeria have been challenging during the period. The country has been dealing with rising inflation and the continued depreciation of the naira against the dollar and other currencies. The inflation rate reached 34.2 per cent in the month of June, with an average rate of 32.8 per cent in the first half of the year, while the naira closed June 2024 at N1,505/Dollar (December 2023: N907/$) at the Nigerian Autonomous Foreign Exchange Market (NAFEM). However, we are encouraged by the improving liquidity n the foreign exchange in the period which enabled us to reduce our exposure to foreign currency-denominated obligations,” he said.

In its part, BUA Foods declared N672.39 billon revenue in H1 2024, a growth of 109.5 per cent from N320.93 billion reported in H1 2023.

The company attributed increase in revenue to a to a y-o-y increase of 88 per cent in Sugar sales to N369.7 billion (H1 2023: N196.5 billion), 164 per cent in Flour sales to N227.9 billion (H1 2023: N86.05 billion), and 95per cent in Pasta sales to N74.03 billion (H1 2023: N37.9 billion).

The Managing Director, BUA Foods, Ayodele Abioye said: “The first half of the year has been one of significant resilience and achievements for our company. We attained a robust financial performance, with total revenue increasing by 110per cent to N672.3 billion compared to the same period last year. Our gross profit stands at N218.4 billion, reflecting a growth of 64per cent. This solid performance is a testament to the efficacy of our strategic initiatives, operational efficiency, and unwavering dedication of our board, management, and other members of staff.

“During this period, we have made significant strides in executing our strategic plans, successfully launching new products, specifically, macaroni, premium pasta and semolina to meet the yearnings of our customers Our diversified portfolio and expansion into new markets impacted revenue growth while strengthening our partnership with key stakeholders. We also maintained a strong focus on cost optimization, resulting in sustained margins and profitability.”

He added, “Looking ahead, we remain confident in our ability to navigate the challenges and opportunities in the market. We will continue to leverage our strong and orchestrated supply chain system to deliver a great financial performance in line with our strategic vision for sustainable growth and value creation for all stakeholders.”

Capital market analysts said despite facing significant economic challenges such as elevated inflation, a depreciating exchange rate, and ongoing security concerns, these companies have been resilient over the years.

The CEO, Wyoming Capital & Partners, Mr. Tajudeen Olayinka, said: “The performance of H1 2024 results is mixed while some have very good results, others were faced with CBN naira revaluation policy that impacted their bottom-line. Nigerian companies are resilient and we expect some to outperformance 2023FY, while some will declare loss over macro challenges.”

Commenting, Analyst and Managing Director, High Cap Securities Limited, David Adonri, stated that: “Nigeria’s economy is witnessing challenges including hike in inflation, security, removal of subsidy, unstable foreign exchange, among other factors that have continued to have mixed performance on revenue generation. However, we should commend these firms for generating a significant increase in revenue and let’s hope they will outperform 2023FY results and declare a dividend.”

Also, analysts at CardinalStone in a report stated, “In 2024, the Nigerian cement industry is expected to benefit from renewed government focus on infrastructure development and construction projects, which could stimulate demand for cement products.

They added, “With increased budget allocations to critical sectors and ambitious infrastructure initiatives (N1.32 trillion to infrastructure, which represents five per cent of the total FG 2024 budget), the construction industry is likely to experience a resurgence. Cement manufacturers, in response, are beginning to recalibrate their production strategies in the form of capacity expansion and improved efficiency to meet the anticipated rise in demand. While challenges may persist, the outlook for Nigeria’s cement industry in 2024 is one of cautious optimism, with potential growth opportunities emerging amidst the recovery phase.”