LAGOS: Dangote Cement Plc, Africa’s biggest producer of the building material by sales, said net income declined 21 percent last year after rain, energy supplies and taxes hurt operations in its home market of Nigeria.
Profit was 159.5 billion naira ($801.5 million) in 2014, compared with 201.2 billion naira the previous year, the Lagos-based company said in an e-mailed statement. Sales increased 1.4 percent to 391.6 billion naira as the company added plants in South Africa and Senegal.
“Despite the challenging conditions of the erratic fuel supply and prolonged rainy season that affected revenues and profitability in Nigeria,” the company is confident about the future, Executive Director Devakumar Edwin said in the statement. The company paid a 25.2 billion-naira income tax bill compared with a credit of 10.4 billion naira in 2013 as the tax-exempt status of some Nigerian operations expired, Dangote said.
Dangote Cement, controlled by billionaire Chairman Aliko Dangote, is expanding in new African countries to tap demand for building materials as governments invest in infrastructure. The company plans to raise capacity to as much as 60 million metric tons by 2016 from 29 million tons. Plants in Ethiopia and Zambia are due to start operations next month, the company said in a presentation.
The shares declined 0.8 percent to 151.35 naira at the close in Lagos, valuing the company at 2.6 billion trillion naira ($13 billion). Net debt more than doubled during the year to 222 billion naira.
Dangote Cement, which has to import goods from explosives for limestone mining to packaging for cement bags, was hit by the naira’s 11 percent fall against the dollar in the last quarter of 2014, Edwin said in a conference call. The currency weakened along with the price of oil, which accounts for 90 percent of Nigeria’s export earnings. Dollars in the country are scarce and the company may have to slow its foreign purchases, said Edwin.
