DANGCEM Declares N154.35bn PAT in Q3 2019 Results; Higher Finance Costs Drag Earnings Lower

Wednesday, October 30, 2019   /08:30PM  / By NSE With Additional Comments From CardinalStone Research/ Header Image Credit: Dangote Cement Plc

Dangote Cement Plc released its Q3 unaudited 2019 results for the period ended September 30th, 2019.

Key Highlights

Revenue declined by 0.8% to N679.79bn from N685.29bn in the previous quarter.

Profit before tax declined by 20.1% to N197.68bn.

Profit after tax declined by 2.5% to N154.35bn.

Net Assets declined by 13.3% to N856.58bn from N986.61bn as at December 31, 2018.

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Initial Reaction - CardinalStone Research

Higher finance costs drag earnings lower 

Dangote Cement Plc (DANGCEM: TP N212.32 ) announced after tax profits of N154.4 billion (-2.5% YoY) at the end of 9M'19, coxswained by average lower prices as well as higher selling & distribution costs. 

In addition to the earnings publication, the board of Dangote Cement recently considered proposals to consolidate its share capital and embark on a share buyback programme. Subject to regulatory approval and required guidance, the cement giant also disclosed its intention to fully back these recommendations. If approved, the implementation of both proposals is likely to lead to a reduction in the number of DANGCEM's shares in issue and an increase in both the nominal and market value of the shares. The details of the transaction will be communicated at a latter date. 

Some Positives:

• In Q3'19, DANGCEM recorded a 4.5% YoY growth in revenue, partly due to 5.0% YoY increase in cement sales despite unprecedented levels of rainfall during the period. The topline improvement was also supported by slightly higher prices (revenue/tonne in Q3'19 : N43,337 vs N43,187 in Q3'18).

Some Concerns: 

• EBITDA margin contracted by 4.78 ppts in Q3'19 to 40.2%  as EBITDA/tonne printed at N23,389, a record low in at least 11 quarters. Specifically, the main pressures on EBITDA stemmed from a significant jump in advertisement and promotion expenditures (N4.9 billion vs N1.3 billion in Q3'18). The company attributed the surge to heightened end user marketing campaigns in order to strengthen the visibility of the Dangote brand in the cement market. Management hinted that this higher marketing spend is likely to persist till the end of the year.

• Net finance expense surged by over 3x to N18.8 billion as parent party loan clinched N89.5 billion levels at the end of 9M'19 from N56.5 billion at the beginning of the year. The company also sustained its Commercial Paper issue program in its latest series 11, 12 and 13 issues. Total active commercial papers in issue at the end of 9M'19 amounted to N131.3 billion, compared to N79.3 billion at the end of FY'18 

Corporate Earnings Released So Far in Q3 2019 

1.      MTNN Declares N148.32bn PAT in Q3 2019 Results;(SP:N127.00k)

2.     Forte Oil Declares N5.26bn PAT in Q3 2019 Results; Revenue Grew by 30.3%,(SP:N15.90k)

3.     DANGSUGAR Declares N14.7bn PAT in Q3 2019 Result,(SP:N10.35k)

4.     TRANSCORP Declares N6.74bn PAT in Q3 2019 Results,(SP:N1.05k)

5.     MANSARD Declares N2.11bn PAT in Q3 2019 Result,(SP:N1.65k)

6.     NCR Declares N293.5m PAT in Q3 2019 Results,(SP:N4.50k)

7.     BETAGLAS Declares N3.91bn PAT in Q3 2019 Result, (SP:N53.80k)

8.     NEM Declares N2.04bn PAT in Q3 2019 Result, (SP:N2.00k)

9.     NIGERINS Declares N323.082m Loss in Q3 2019 Results,(SP:N0.20k)

10.  UNILEVER Declares N541m PAT in Q3 2019 Results,(SP:N26.70k)

11.   AGLEVENT Declares N904.25m Loss in Q3 2019 Results,(SP:N0.28k)

12.  CHELLARAMS declares N1.07bn Loss in Q2 2019 Results, (SP:N3.08k)

13.  TRIPPLEG Declares N11.75m PAT in Q1 2019 Results, (SP:N0.64k)

14.  NESTLE Declares N36.84bn PAT in Q3 2019 Result,(SP:1220.00k)

15.  AIICO Declares N4.69bn PAT in Q3 2019 Results,(SP:N0.69k)

16.  OMOSAVBNK Declares N66mn PAT in Q3 2019 Results,(SP:N0.55k)

17.  MCNICHOLS Declares N15.44 million PAT in Q3 2019 Results,(SP:N0.49k)

18.  FIDSON Declares 273mln Profit in Q3'19 Results;(SP:N4.00k)

19.  SCOA declares N277.86m Loss in Q3 2019 Results,(SP:N2.93k)

20. STERLNBANK Declares N7.58bn PAT in Q3 2019 Results,(SP:N2.00k)

21.  FIDELITYBK Declares N21.46bn PAT in Q3'19 Results;(SP:N1.70k)

22. SEPLAT Declares N56.65 billion PAT in 2019 Q3''19 Results,(SP:N517.00k)

23. INTBREW Declares N16.445bn Loss in Q3 2019 Results,(SP:N12.60k)

24. LASACO Declares N652m PAT in Q3 2019 Results, (SP:N0.26k)

25. CONOIL Declares N1.7bn PAT in Q3 2019 Results,(SP:N15.40k)

26. EQUITYASUR Declares N366m Loss in Q3''19,(SP:N0.20k)

27. LINKASSURE Declares N592m PAT in Q3 2019 Result,(SP:N0.51k)

28. DAARCOMM Declares N629.598mln Loss in Q3 2019 Result,(SP:N0.40k)

29. BERGER Declares N215.697m PAT in Q3 2018 Results,(SP:N7.50k)

30. REDSTAREX Declares N276.878m PAT in Q2 2019 Results,(SP:N4.05k)

31.  ABBEYBDS Declares N85.9m profit in Q3 2019 Results,(SP:N1.00k)

32. EKOCORP Declares N124.76 Loss in Q3'19 Results,(SP:N3.37k)

33. CHAMPION Declares N284.419m PAT in Q3 2019 Results,(SP:N1.02k)

34. INITSPLC Declares N19.28m PAT in Q3 2019 Results,(SP:N0.75k)

35. OANDO Declares N13.06bn PAT in Q3 2019 Results (SP:N3.40k)

36. RTBRISCOE Declares N681m Loss in Q3 2019 Result,(SP:N0.25k)

37. NNFM declares N153.32 Loss After Tax in Q2'19 Results,(SP:N4.30k)

38. UNIONDICON Releases Q2 and Q3 2019 Results; Declares N122m Loss in Q3,(SP:N12.15k)

39. Lafarge Africa Declares N20.57bn PAT in Q3 2019 Results,(SP:N14.70k)

40. LIVESTOCK Declares N9.57m PAT in Q3 2019 Result, (SP:N0.50k)

41.  ETI Declares N78.84bn PAT in Q3'19,(SP:N7.10k)

42. NB declares N12.27bn PAT in Q3'19 result; (SP:N46.05k)

43. UNITYBNK Declares N1.48bn PAT in Q3 2019 Results,(SP:N0.63k)

44. AIRTELAFRICA Declares $228m PAT in Q2 2020 Result, (SP:N308k)

45. Corporate Earnings For The Week Ending 251019 - ZENITHBANK Declares N150.72bn PAT in Q3 2019 Results

Related News on DANGCEM 

1.      DANGCEM Board Proposes Share Buyback And Reverse Share Split To Its Shareholders

2.     DANGCEM Notifies of Board Meeting and Closed Period

3.     MTNN Grows Market CAP By N753bn Since Listing; DANGCEM Still The Most Capitalized Stock

4.     DANGCEM Declares N60.25bn PAT in Q1'19 Results; Earnings Disappoint, EPS Contracts By 16.5% YoY

5.     DANGCEM Q1' 19 - Mounting Competition, Margin Erosion, Declining Earnings

6.     Corporate Earnings For The Week Ending 010319 - DANGCEM Declares N390bn PAT in 2018 Audited Results

7.     Corporate Earnings for the Week Ending 261018 - DANGCEM Declares N158.28bn PAT in Q3 2018 Results

8.     DANGCEM Declares N158.28bn PAT in Q3 2018 Results,(SP:N210 ...

9.     DANGCEM Declares N113.16bn PAT in Q2 2018 Results,(SP:N230.00k)

10.  Corporate Earnings for the Week Ending 270418 - DANGCEM Declares N72.12bn PAT in Q1 2018 Results

11.   DANGCEM Declares N72.12bn PAT in Q1 2018 Results,(SP:N248.0k)

12.  DANGCEM Declares N204.25 bn PAT in 2017 Audited Results,Proposes N10.50K per share       Dividend

13.  DANGCEM Proposed Issuance of 950 Billion Series 3 and 4 Commercial Paper

14.  One Week After: DANGCEM Records -0.85% Price Depreciation; Volume Traded Grew by 291.98%