Dangote Cement Crossed N10Trn as Investors Bet On Earnings

Dangote Cement Plc has crossed N10 trillion in market value after strong buying interest that pushed its share price to its all-time high. The leader in the Nigerian cement oligarchy is expected to release its 2023 financial statement in the coming week. 

Data from the Nigerian Exchange showed that the cement company share has become expensive, traded at N592.6 on Monday.  The company has announced a close period, meaning that the ongoing buying interest is devoid of directors dealing in shares ahead of the release of its earnings scorecard for 2023.

The company told the Nigerian Exchange that the closed trading period applies to all parties that may at any time, possess sensitive information that may materially affect the price of the securities. Accordingly, no insider may deal in the Company’s securities during the Closed Trading Period. 

In its outlook, Cordros Capital Limited said its analysts are positive on the Cement sector. The Investment firm anticipates cement manufacturers to capitalise on robust demand expected from both the public and private sectors, leading to decent revenue growth in 2024.

Despite this positive outlook on volumes, analysts note that sticky cost pressures pose challenges to profit margins for DANGCEM, BUA and WAPCO –which are all rated buy.

In the note, analysts said the foreign exchange devaluation challenges from 2023 are not foreseen to continue impacting earnings significantly, given the various government reforms. Thus, analysts project that our coverage companies will achieve impressive earnings growth in 2024.

Dangote Cement’s operations were affected negatively by the election uncertainty and cash unavailability which impacted business operations in Q1 2023, CSL Stockbrokers said in a note. According to the investment firm, the cement company also noted that the significant FX devaluation in Q2 2023 also hampered sales volumes.

Consequently, the group sales volume declined 2.3% year on year to 20.29m MT in 9M 2023. However, the combination of increases in prices and strong volume growth from its Pan-African operations came to the rescue. This resulted in revenue growth of 28.7% year on year in 9M 2023, CSL Stockbrokers explained in a note.

“We believe constrained purchasing power and low CAPEX expenditure by the government continue to affect sales volumes across the whole industry”. Dangote cement controls the largest market share in the industry (61.2%) and is well-positioned to meet increased demand when industry volumes pick up. Selloffs Provoke Spike in Nigerian Treasury Bills Yield

The management announced the commencement of operations at its 0.45Mta grinding plant in Ghana and noted that the company has reached an advanced stage in the deployment of 1.5Mta grinding plant in Cote d’Ivoire. Clinker export to Cote d’Ivoire is also expected to commence in 2024. #Dangote Cement Crossed N10Trn as Investors Bet On Earnings
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