. . . Increases Shareholders Dividend By 50% To N30 Per Share

Amidst applause by shareholders for the impressive results in the 2023 financial year despite the harsh business operating environment, the Chairman of Dangote Cement Plc, Aliko Dangote has announced an increase of 50 percent on dividend payout to the shareholders, from N20.00 per share paid in the 2022 financial year to N30.00 for the last financial year 2023.

In the same vein, Dangote also revealed it had concluded arrangements for thousands of the company’s delivery trucks to henceforth run on Compressed Natural Gas (CNG) in line with the Federal Government agenda on adoption of alternative fuel for official vehicles.

This decision, Dangote told excited shareholders at the 15^th Annual General Meeting (AGM) of Dangote Cement Plc, held in Lagos was to add to the Federal Government’s quest towards reducing dependence on fossil fuel, thereby enhancing the nation’s energy independence and contributing to a more secure energy future.

According to him, “We are now going to start using CNG vehicles, especially with the new policy of the Federal Government, launched by the Renewed Hope Agenda by His Excellency, President Bola Tinubu.

“By the end of next year, all our trucks that are operating in the company will be running on CNG, and that is a whole lot of money that we are going to invest. But we are equal to the task, and we will continue to push and make sure that we continue to make our shareholders happy.”

The Chairman disclosed to the shareholders the Company’s ongoing efforts at ramping up production with the ongoing construction of a new plant of six million metric tonnes per annum at Itori, in Ewekoro local government area of Ogun State, noting that despite the hiccups at the Apapa Port in Lagos, the plant would be completed to time.

Dangote said the company’s impressive performance was in fulfillment of the promise he made of an enhanced Return on Investments (RoI) to the shareholders and other stakeholders in Dangote Cement, assuring them that the following year would even be better.

He expressed satisfaction that Dangote Cement achieved double-digit growth in revenue of ₦2,208.1 billion, while Group EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) reached a record high of ₦886.1 billion, increasing by 25.1%.

“This outstanding EBITDA performance was underpinned by our robust cost control measures and our diverse Pan-Africa operations. The latter acted as a cushion, providing resilience to country-specific risks, while the former enhanced our overall profitability. Our Pan-Africa operations now contribute 41.2% to the Group’s overall volumes,” he added.

Dangote pointed out,” We made significant strides in our expansion initiatives, with the successful launch of operations at our 0.45Mta grinding plant in Ghana, increasing our total installed capacity to 52.0Mta. Furthermore, our 1.5Mta grinding plant in Côte d’Ivoire is making substantial progress and is nearing completion. Lastly, we have commenced construction on our 6Mta Itori plant in Ogun State, a crucial step in supporting our ambitious export goals.”

The 2023 results showed that Africa’s largest cement manufacturer recorded improvement in all performance measurement indicators with group revenue rising by 36.4 per cent to ₦2,208.1 billion while Profit after tax (PAT) was up by 19.2 per cent to ₦455.6 billion. Earnings per share went up by 18.8 per cent at ₦26.47. Dangote Cement is garnering more market share across the continent with Pan-Africa volumes going up by 12.7 per cent to 11.3Mt.

In his interview with the media during the AGM, the Group Managing Director of Dangote Cement Plc, Arvind Pathak said 2023 was yet another testament to the effectiveness of the management’s diversification strategy, despite the challenging macroeconomic conditions.

He said, “Our diverse operations acted as a cushion, providing resilience to country-specific risks. Pan-African volumes were up 12.7 per cent and now account for 41.2 per cent of Group volume. Consequently, Pan-African revenue increased by a record 123.2 per cent to ₦925.9 billion, while EBITDA surged by over four-fold to ₦263.7 billion.”

Alluding to what Dangote said on use of CNG as an alternative fuel for its cement trucks, Pathak noted that in response to the heightened inflationary environment, “we implemented new and innovative business strategies that helped to drive up revenues, contain costs, and protect margins. These initiatives included fuel mix optimisation, propelling the use of alternative fuels to replace more expensive fossil fuels. We also began the phased transition from diesel power trucks to full Compressed Natural Gas (CNG) trucks.”

Shareholders one after another were full of praise for the board and management of the Company for the impressive outing in 2023, which accounted for the dividend payout of N30 per share; an increase of 50 per cent over the 2022 dividend despite the economic headwind that characterised 2023.

Mrs. Bisi Bakare, Chairperson of the Pragmatic Shareholders Association lauded the management of Dangote Cement for what she described as a huge dividend payout even when many other companies could not pay their shareholders a dime because they declared losses.

She stated that the shareholders were happy, and expressed optimism that with the way the management has steered the Company in the face of the current economic downturn and recorded good results, the 2024 dividend will be higher.

In his comment, the President, of the Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar said the shareholders could not but thank the board and management of Dangote Cement for a job well done.

He noted that no company, in recent time, has been able to be as profitable as Dangote Cement, just because of the sound judgment of the management in navigating the murky economic weather which has had negative impact on results of some other companies.

He commended Dangote for his patriotism and dedication to the cause of Nigeria and her people with his decision to reduce prices of his petroleum products.

He expressed hope that the price of Premium Motor Spirit popularly called petrol would come down once the Dangote Refinery rolls out the product soon.

On Tuesday, the naira surged to N1,173.88 against the dollar on the Nigerian Autonomous Foreign Exchange Market (NAFEM), achieving its strongest closing rate since April 26, when it was N1,339.23/$1, according to FMDQ data.

Meanwhile, on the streets of Lagos, bureau de change (BDC) operators reported the naira trading at N1,480 per dollar, improving from Monday’s rate of N1,498/$1.

On Friday, May 24, 2024, the naira edged up to N1,482.81 per dollar, reflecting a 0.19 percent increase after a four-day winning streak ended.

Foreign exchange turnover surged to $556.25 million, marking a 231.99 percent increase. This boost was driven by the Central Bank of Nigeria’s (CBN) robust liquidity management, including raising N1.16 trillion through an Open Market Operation (OMO) bill auction.

The CBN’s actions aim to control inflation and stabilize the naira amid ongoing economic challenges.

However, on Monday, FX turnover sharply decreased by 67.50 percent to $180.8 million. This significant drop suggests a lower demand for dollars, which likely contributed to the naira’s appreciation.

With fewer dollars being purchased, demand decreases, strengthening the naira against the dollar.

On Tuesday, the naira traded at N1,888 against the British pound sterling, N1,630 against the Euro, N1,112 against the Canadian dollar, and N150 against the Chinese yuan.

Stakeholders in the capital market have voiced reservations over the proposed amendments to the Central Bank of Nigeria (CBN) Act No. 7 of 2007, pointing to potential adverse economic consequences.

Biztllers reports that the Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON) are among notable bodies to have raised concerns that the bill could undermine the independence of the Central Bank of Nigeria (CBN).

The legislation, which has passed its second reading and is scheduled for a public hearing on May 30th, seeks to modify the CBN’s autonomy by subjecting its budget to the National Assembly’s approval, while also establishing a new Coordinating Committee for Monetary and Fiscal Policies.

Those versed in economic and fiscal policies opine that these changes could introduce political interference in monetary policy decisions, hampering the central bank’s ability to manage the economy effectively and objectively.

President and Chairman of the Council of CIS, Oluropo Dada, pointed out that the pivotal role of the central bank in maintaining economic stability and preserving international credibility cannot be overemphasised.

Dada said, “Safeguarding the independence of the Central Bank of Nigeria is crucial for aligning with global economic best practices and ensuring decisions are driven by sound financial principles, free from undue influence.”

On his part, Chairman of ASHON, Sam Onukwue, highlighted the potential negative impact on investor confidence.

“An independent central bank is a cornerstone for maintaining the country’s standing in the global financial community, which directly affects investor confidence, credit ratings, and the overall economic outlook,” Onukwue cautioned.

While both organizations acknowledged the merit of some proposed amendments aimed at enhancing corporate governance and compliance, they stressed the importance of considering the broader ramifications.

“It is imperative to ensure that fiscal authorities do not encroach upon the central bank’s operational independence, as this is vital for effective and timely monetary policy responses,” Dada added.

As the public hearing approaches, financial market participants, economists, and analysts will closely monitor the proceedings and subsequent legislative actions. The outcome will have far-reaching implications for Nigeria’s economic policy framework and its position in the global economic landscape.