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   Market Date: 29-01-2015   
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Sokoto Cement posts N1.8b profit, declares 10k dividend

Category: Capital Market

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Sokoto Cement posts N1.8b profit, declares 10k dividend


Sokoto based Cement Company of Northern Nigeria (CCNN), has declared a final gross dividend of 10 kobo per share, bringing the total dividend paid to shareholders to 90 kobo in the 2009 financial year.It also recorded a profit after tax of N1.8 billion, against a net profit of N1.5 billion recorded in the previous year.

Speaking at the 31st yearly general meeting of the company held in Sokoto yesterday, its chairman Alhaji Abdulsamad Rabiu said since the company was acquired by BUA International Limited as a core investor last year, it embarked on cost cutting measures to ensure improved profitability.He maintained that BUA International made a strategic investment in CCNN to improve the quality of cement production, in order to take its rightful place and market position in Nigeria.

According to him, clinker production and cement sales in 2009 were all time high despite the problems encountered with the kiln filter and that the daily clinker production will increase when the new filter is installed during the third quarter of 2010.He stated that the demand for cement was high during the first eight months, while the company experienced a weaker market in the remaining period of the year, saying the development was to a large extent compensated for by export to Republic of Niger .

Rabiu noted that the average price of liquefied petroleum fuel oil (LPFO) used in powering the factory during the year was 56 percent higher than in 2008, thereby adding about 40 per cent to the cost of production.He observed that power is the major problem facing the cement industry, noting that the cost of transporting LPFO from the South to Sokoto State was one of the problems that added to the cost of production by almost 40 per cent this year.

“Our major problem is power and if we can have power in the factory, it will reduce our cost of production. But, unfortunately, we are using LPFO to power our machines in CCNN which we have to transport from the South and this adds about 40 per cent of our cost of production,” he said.The Chairman assured that the management of BUA International will use   Managing Director of CCNN, Mr Alf Karlsen said cement consumption in Nigeria has increased by 10 percent to 14.8 million tonnes in 2009, while the demand is expected to continue to grow, hence the need for the company to continue improving its production processes to make them more cost efficient.

He stated that the company has procured a state of the art filter which will curb dust emission during production well below Nigerian and European emissions limit at the cost of N450 million.The CCNN boss pointed out that the number of shareholders of the company has increased from 18,000 at the end of 2008 to 36,000 in 2009 which is a reflection of the management and staff’s efforts to improve the company’s performance.Karlsen expressed gratitude to the state government and the host communities for their understanding during the unfortunate incidence, especially when the kiln filter was totally damaged.


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