Dangote Cement Plc, Nigeria’s most capitalised quoted company and Africa’s largest cement producer, plans to raise N150 billion in new debt capital to finance its business operations.
In a regulatory filing yesterday, Group Managing Director, Dangote Cement Plc, Engr Joseph Makoju, said the new capital raising would be done through the issuance of commercial papers, whether as a standalone transaction or by way of a programme to be executed in tranches, series or proportions.
According to the company, the net proceeds from the issuance would be used to finance capital expenditure, working capital and general corporate purposes.
The proposed N150 billion capital raising comes on the heels of last week’s payment of N178.9 billion cash dividend to shareholders. After the approval of the dividend recommendation at the annual general meeting in Lagos, shareholders received a dividend per share of N10.50, representing an increase of 23.5 per cent on a dividend per share of N8.50 paid for the 2016 business year.
Key extracts of the audited report and accounts of Dangote Cement for the year ended December 31, 2017 had shown that the group turnover grew by 31 per cent from N615.1 billion in 2016 to N805.6 billion in 2017. Profit before tax increased from N180.93 billion in 2016 to N289.59 billion in 2017. Profit after tax rose from N142.86 billion in 2016 to N204.25 billion in 2017. Earnings per share consequently improved to N11.65 in 2017 compared with N8.78 in 2016.
The report indicated that while sales from the three plants in Nigeria contributed N552.36 billion to the group’s revenue, the balance of N258.44 billion was accounted for by plants in other African countries. Revenue attributable to Nigeria grew by 29.6 per cent while that from Pan-African operations rose by 32.5 per cent.
Though group sales volumes were lower by seven percent due to depressed Nigerian market, Pan-African sales volumes went up by 8.4 per cent to 9.4 metric tonnes with strong volume increases in Senegal, Ethiopia and Cameroon and new capacities of 1.5 metric tonnes in Congo and 0.5 metric tonnes in Sierra Leone.
Chairman, Dangote Cement Plc, Alhaji Aliko Dangote, said the 23.5 per cent increase in dividend was due to improved performance in 2017 and in line with the group’s policy to reward shareholders while retaining reasonable earnings for future growth.
Dangote’s Dangote Industries Limited (DIL) holds more than 75 per cent controlling equity stake in Dangote Cement.
Dangote noted that in the face of challenges in doing business in Africa, the group has benefited from diversity that it has created across its businesses and the local knowledge of doing business in neighbouring countries in Africa.
“Our large capacity, financial strength, vertical integration and prudent management have enabled us to enter markets, gain share and withstand competitive and pricing pressures that have wrought more damage on the smaller, less well-funded manufacturers who initiated them,” Dangote said.