Dangote laments impact of global, local meltdown on businesses
Category: Capital Market
The President and Chief Executive of the Dangote Group, Alhaji Aliko Dangote has lamented the negative effects of the global and local meltdown on businesses.
According to him, the outgoing financial year was difficult for businesses both globally and locally, as the global financial meltdown and crises in the domestic banking industry imposed challenges on the business environment through reduced access to both local and foreign capital, reduced purchasing power and sustained high price of wheat.
He noted some of the challenges facing businesses to include increase in the prices of raw materials, power and diesel which have gone up compared with the previous year and the inability of manufacturers to pass on these increases to consumers.
Addressing shareholders during the Dangote’s Annual General Meeting held recently in Lagos, he noted that the group has adopted a strategy to overcome the difficult operating environment and also to focus on internal efficiency to cut down on other areas of costs, the effect of which made the company profit before taxation to increase from N376 million in 2007 to N1.8 billion in 2008 financial year.
He said despite these challenges the group is looking ahead with optimism, especially in the light of the recent commissioning of the Dangote Noodles factory in Ikorodu, Lagos and two more to be commissioned in Kano and Calabar in the near future and also anticipating that the expansion of the production capacity in the factories in Apapa, Calabar and Ilorin will increase the production from the current 4,800 metric tons of milling capacity per day to 7,300 metric tons.
The expansion plan is boosted by the Group’s recent unaudited result for the nine-month period ending September 30, 2009 indicating some exciting prospects. The results showed that turnover for the period was N46.95 billion surpassing the turnover realized in the financial year of 2008. Profits after tax for the nine month period was N7.6 billion, an increase of 155 per cent over the financial year 2008.
However, Dangote Flour posted a net profit of N2.9 billion for the year ending December 31, 2008, representing a 400 percent increase compared to N561.55 million posted in 2007. According to the financial results audited by Akintola Williams Deloitte, Dangote Flour Group’s turnover increased from N43.13bilion in 2007 to N47.92 billion in 2008 financial year.
Following the impressive result, a dividend of 20 kobo per share was recommended by the directors for the year . “Group profits in 2008 also leaped from N676 million in 2007 to N3.2 billion in 2008 implying N1.4 billion attributable profits from subsidiaries”.The outlook according to the chairman of the Group “looks better and more promising as wheat prices remain relatively stable in 2009.
As such the Group has proposed an interim dividend of 30 kobo per share based on the nine months unaudited accounts of the Group for the period ended September 2009.