By Itohan Abara-Laserian
Lagos, Sept. 23, 2020 Dangote Cement Plc. says it has established a very strong platform for future growth and consolidation of the company across the African Continent.
Mr Michel Puchercos, the Group Managing Director and Chief Executive Officer of the company, said this at the virtual Facts Behind the Figures (FBF) and Facts Behind the Sustainability Reports (FBSR) by the Nigerian Stock Exchange (NSE) on Wednesday in Lagos.
Puchercos said that at the end of 2019, the 2020 outlook was positive, considering the several plans for higher economic growth before the outset of COVID-19 pandemic.
“While the world faces economic recession and downturn, we are fortunate enough to have had a decent start in the year as reflected in our first half financial results, this is indeed humbling for me.
“H1 Group EBITDA was slightly up, supported by strong operating performance in Nigeria and Pan-Africa amidst COVID-19 challenges. EPS was up 6.3 per cent at N7.45. We are fortunate to have resilient H1 2020 results amid impact of COVID-19.
“Cement is an essential building material with no viable substitutes and the global cement industry continues to grow, driven by urbanisation, population growth, housing growth, industrialisation, and infrastructure development, especially, in emerging economies such as Africa, where we operate.
“We are presented with a huge opportunity and are strategically positioned to take advantage of these opportunities with our operational efficiency, product quality, modern facilities, and technology to leverage our unique economies of scale and know-how,” he said.
He also said that aside from regional and international institutions planning for higher growth, the Nigerian government had put plans in place for an increase in infrastructure spending, following the election cycle in 2019.
“Then the whole world was struck by COVID-19 pandemic which posed a significant threat to public health and overall economic conditions. We have all undoubtedly faced unprecedented challenges since. It is a social and economic phenomenon that is affecting us all professionally and personally.
“Some of the countries in which we operate, experienced full or partial lockdown earlier this year or had various levels of restrictions and curfews to protect public health and safety.
“Dangote Cement has placed an emphasis on the health and safety of team members, customers, suppliers, and communities at large as a core value.
“We have implemented several rigorous protocols in all our operations across the continent to support public health policies and ensure the highest level of protection of our stakeholders.
“I believe the future looks very bright for Dangote Cement. We have established a very strong platform for future growth and consolidation across Africa.
“We are on track to be a global leader in cement production, recognised for the quality of our products and services, and for the way we conduct our businesses.,” he said.
Guillaume Moyen, Chief Financial Officer of the company, said they paid over N1 trillion to share holders over the last seven years.
Moyen said that Dangote Cement had a focus on helping the Nigerian economy as it had taken Nigeria from a cement importing country to an exporter of cement.
“Dangote Cement has a sustained focus on helping the Nigerian economy and doing what it can to benefit the economy. Arguably our biggest achievement to date is taking Nigeria from being a big importer of cement to being self-sufficient and now an exporter.
“Dangote Cement has paid its taxes over the last 10 years and our VAT contribution in the last 10 years has been impressive. We are developing road infrastructure and durable concrete roads, which are major economic catalyst and hugely beneficial for the country’s transport sector.”
He also said that Dangote Cement had signed up to the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme; a public-private partnership (PPP) intervention.
“Participants are allowed to utilise the total cost (Project Cost) incurred in the construction or refurbishment of an eligible road as a tax credit against their future Companies Income Tax (CIT) liability,” he said.
According to Moyen; like the rest of the world, Sub-Saharan Africa will be affected by the ongoing Coronavirus pandemic and the International Monetary Fund (IMF) forecasts that it will contract by 1.8 per cent in 2020.
“H1 2020 numbers, which were resilient, bearing in mind the impact of COVID-19. Nigeria domestic volumes were up by 1.8 per cent despite the full lockdown at the end of March in key cities and states of Nigeria including Lagos, Abuja and Ogun states which are major markets for us.
“Revenues were up by 1.2 per cent owing to higher realised prices. EBITDA was only down by 3.1 per cent to N194.4 billion owing to higher energy costs and the adverse effects of COVID-19 on various dimensions of our operations,” he said.
He expressed belief that on a longer term, the African Continental Free Trade Area (AfCFTA) would give Dangote Cement the opportunity to leverage high quality limestone reserves and production assets to serve African markets still importing cement and clinker.
Mr Oscar Onyema, the Chief Executive Officer, NSE, said that the exchange was leveraging on digital technologies to ensure uninterrupted information about market activities.
Onyema said: “We have continued to remain resilient even in the face of the pandemic, leveraging various digital platforms and technology to ensure business continuity and uninterrupted information.
“We are pleased that Dangote Cement has chosen to use this platform to inform the market of its financial performances as well as its strategic and operational developments.
“Given that the market is driven by timely, regular information, your constant interaction with the market through this forum is vital and we encourage you to continue with this trend.
“We commend the board of the company for integrating sustainability into the core of their business operations,” he said.
Onyema commended the company for its efforts in curbing the spread of COVID-19 as well as its various interventions and donations to support national efforts to cushion the effects on the Nigerian populace.
He also pledged NSE’s continued emphasis on the importance of sustainable business practices in delivering value to their listed companies, investing publics to support Africa’s economic growth.
Also, Mr Bismarck Rewane, the Managing Director of Financial Derivatives Company, while giving his analysis said that the economy would spur slowly even though it was pandemic resilient.
Rewane said that of the 10 countries that Dangote Cement was represented in, only four would show positive growth this year in spite of the pandemic. He listed them as: Ghana, Ethiopia, Senegal and Tanzania.
“The average inflation rate across Africa is going to be about 8.6 per cent, the highest being Ethiopia with about 20 per cent and the lowest being Brazzaville with 1.1 per cent.
“The major exporters are South Africa with 31.2 per cent of total export, Nigeria is 28 per cent, Angola 21 per cent and Cote d’Ivoire 1.6 per cent.
“In terms of imports, major importers are : ,South Africa, 40 per cent; Nigeria 18 per cent, Kenya, 5.7 per cent and Cote d’Ivoire 2 per cent.
“This shows that there is a lot of economic activities in Africa and in the 54 countries, the bulk of activities lie with the top five or 10 and looking at the countries where Dangote Cement operates are the key drivers of the African economy, ” he said.
Eunice Sampson, Head of Sustainability, Dangote Cement, said that the company was strongly committed to its economic, environmental and social responsibilities.
Sampson said that these would ultimately translate to business sustainability, which therefore aligned with the UN’s Sustainable Development Goals (SDG’s).
“Our 2019 sustainability report is written in accordance with the reporting standards of the Global Reporting Initiative (GRI).
“Our approach to sustainability operationalisation is defined by our seven Dangote sustainability pillars which are: institutional, financial, operational, cultural, economic, social and environmental pillars,” she added.