Dangote Cement Plc Financial Year End 2016 Result Summary

12 Months Report DANGOTE CEMENT PLC
	2016 N'000	2015 N'000	change	Year End
Revenue	615,103,000	491,725,000	25%	December
Profit before taxation	180,929,000	188,294,000	-4%
Profit for the period	186,624,000	181,323,000	3%
Issued Shares (Units)	17,040,507,405	17,040,507,405
Basic Earnings Per Shares (Kobo)	1,134.00	1,086.00	4%
Last total dividend paid (Kobo)	850.00	800.00	6%

Dangote Cement clearly the Market Leader in that sector,  even as it is not currently maximizing its capacity. It has a capacity of 42,550 metric tonnes with 22,534 metric tonnes utilized. This represents 52.96% of their capacity. A little increment of this would more than improve its revenue. 

The Company declared a dividend of 850k compare to 800k paid the same period last year. This is an increase of 6%.

With a dividend yield of 5.03% for a company like that, is not bad.

Quarter on Quarter Performance

Revenue 

Q1: #140,521,000,000

Q2: #151,670,000,000

Q3: #149,901,000,000

Q4:# 173,011,000,000

With an average of 153,775,770,000 per quarter. Q4 was way ahead of the average due to the price increase taken on all their products within this period in Nigeria.

PAT

Q1: #52,779,000,000

Q2: #50,641,000,000

Q3: #30,101,000,000

Q4: #53,103,000,000

With an average of #46,656,000,000 PAT per quarter. Only Q3 result was below the average, and this period reflected the time they have energy challenges at their factories in Nigeria, as a result of the vandalism of oil plant installations  in the Niger Delta region. This terrible affect gas supply.

Nigeria Market remains the biggest within the group and the only one currently running on profit.

A closer look at the Report shows that Dangote Cement Nigeria raked in a total of # 426,129,000,000 in terms of revenue and #379,331,000,000 in terms of PAT. While on the other hand, Dangote Cement Pan Africa has a revenue of # 195,028,000,000 translated to naira and (#38,520,000,000) loss in terms of PAT. 

Out of the 42,550 metric tonnes capacity, Dangote cement Nigeria has 29,250 metric tonnes out of which 14,973 metric tonnes was produced in Nigeria. The balance  13,300 metric tonnes capacity belong to the business Pan Africa interest out of which 3,439 metric tonnes volume was added to the total output.

The Cost of production still remains a major challenge here, material consumed increased by 48.75% while revenue increased by just 25%. In the same vein, fuel consumption increased by 68.83%, part of the reason for the price review resulted to by the company in the last quarter of 2016, and the switching from gas energy to coal within the same period. 

Although there are concern around the implication of coal on the health of the people living around the factories but the company is still working on the best alternative in the medium term. 

The stock still maintain its position on my Benjamin Graham list of portfolio designed to track the All share Index. 

It is expected that the firm would surpass its 2016 performance with relative ease now settling down in the Niger Delta, and possible benefits of the early passage of 2017 budget with its unequivocal vote for infrastructure which will result in improve turnover for them and the industry in general.

While we await this turn around of event, let us see what the market reaction would be.