Nigeria’s Cement Market Battles: Dangote Cement in Focus


Wednesday, June 12, 2019   /   08:0oAM / By  Proshare Research / Header Image Credit: Guardian 



Corporate battles can be dirty, but in the Nigerian Cement market competitors appear to have worked out a sort of edgy accord. Rivalry in the cement business has progressed with Dangote Cement being the largest manufacturer in the country with about 60% of market share, followed by Lafarge Africa with 30% share of customer wallets and CCNN picking up the balance of 10% of consumer spending on the building item. 

The competitive structure has allowed for non-aggressive rivalry enabling prices to stay fairly stable, until recently. The price of cement has dropped a notch over the last few months in 2019 as the coming on stream of CNN’s Kalabaina plant has added to industry capacity and required the smaller manufacturer to cut product price to push higher sales volume. The fall in price has compressed margins of the larger players in the business and seen Dangote Cements margins fall below its previous 60% while Lafarge Africa’s margins dip slightly below 30% even though Lafarge’s sales volume is expected to have increased in Q1 2019 unlike the case of Dangote Cement which saw a YTD fall in revenue and sales volume. 

If this trend continues the genteel competition amongst rivals could turn tougher as each firm tries to protect sales volume as margins slide.

Nigeria’s cement rivals appear to serve distinct market segments. Although the competition is about to disrupt this trend, CCNN is focused in the North, while DANGCEM and WAPCO serve the southern part of the country. 

According to the 2018 Global Cement Directory, Dangote Cement is the 10th largest cement producer in the world. With a total capacity of 43.8Mt per year and 12 plants (10 integrated and two grinding plants), it is Africa’s largest home-grown cement producer. With a market capitalisation of N3.22 trillion as at 10th June 2019, it is the most capitalised company on the Nigerian Stock Exchange (NSE) as it contributes 24.12% to the total market CAP.



The earning profile of DANGCEM over the last few quarters from Q1 2018 to Q1 2019 reveals that except Q1 2019, revenue grew by at least 12%. However, revenue declined by 0.80% in Q1 2019 as the company recorded N240.16bln revenue. Notwithstanding, this performance has been very commendable as revenue increased impressively in each of the quarters of 2018. Going further, the PAT also followed an upward trend as PAT rose during 2018 but saw a reversal of 16.5% in Q1 2019.


Table 1- Change in DANGCEM Revenue and PAT from Q1 2018 to Q1 2019



Revenue N'm

% chg in Revenue


% chg in PAT

Q1 2018





Q2 2018





Q3 2018





Q4 2018





Q1 2019





Source: DANGCEM Annual Reports and Accounts


Chart 1- Growth in DANGCEM Revenue from Q1 2018 to Q1 2019

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Source: Proshare Research


The Q1 2019 financial result of DANGCEM shows that the company recorded revenue of N240.16bln in Q1 2019, a decline of -0.80% compared to Q1 2018. During Q1 2019 the company sold cement worth N240.09bln and recorded N66m as revenue from the sale of other products. The increase in sales represents a marginal decrease compared to Q1 2018 as total revenue from cement was N241.99bn while revenue from sales of other products was N131m.


Chart 2- DANGCEM Revenue from Q1 2018 to Q1 2019

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Source: Proshare Research


In Q4 2018, DANGCEM recorded an impressive growth of +12% in revenue, which represents a rise to N901.21bn as against N805.58bn recorded as revenue in Q4 2018. In Q3 2018, revenue also increased but by more than the increase in Q4 2018 as revenue growth rate YoY was +13.50% from N603.58bn in Q3 2017 to N685.29bn in Q3 2018. Furthermore, revenue also increased by +16.30% and +16.90% in Q1 and Q2 2018 respectively.


Chart 3- Growth in DANGCEM PAT from Q1 2018 to Q1 2019

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Source: Proshare Research

In Q1 2019 DANGCEM recorded a decline of 16.50% in post-tax profit, PAT, from N72.12bln in Q1 2018 to N60.25bln in Q1 2019. The decline in PAT stems from a decrease in revenue over the period while other costs moved up slowly except sales and distribution expenses, which grew by 34% to N39.610bln. However, The Company recorded a spike PAT growth in Q4 2018 as PAT grew by 91%. Furthermore, there was a 2.7% growth in PAT of the company in Q3 2018 while it also increased by 3.10% and 29.1% in Q2 and Q1 2018 respectively.


Chart 4- DANGCEM PAT from Q1 2018 to Q1 2019


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Source: Proshare Research


Share Price Movement

Despite strong FY’18 performance, DANGCEM was among the 109 losers in 2018 on the NSE with a share price decline of -17.52%. It opened the year with a share price of N230 and closed the year with a share price of N189.70. The company’s share declined alongside the All Shares Index (ASI) as the ASI shed -17.81% in 2018. However, when compared to the performance of the NSE industrial index in 2018, DANGCEM outperformed as the industrial sector recorded -38.29% decline representing the highest drop among other sectorial indices. YTD, DANGCEM share price has declined marginally by -0.37% from N189.70 at the beginning of the year to N189.00 as at 10 June, 2019


Visit Dangote Cement Plc IR Page in Proshare MARKETS


Graph – One Year Share Price Movement


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Peer Review – Share Price, Financials

DANGCEM Share Performance Compared with Peers

In 2018, there was a weak sentiment towards Nigerian stocks; the NSE industrial index shed -38.29% over the period. Except for CCNN which outperformed the market in 2018, both DANGCEM and WAPCO recorded a decline in share price over 2018 with WAPCO recording the highest decline of -72.27%.

However, DANGCEM and its peers have seen a decline in share price movement YTD as there has been a negative sentiment around the company’s shares. CCNN has the highest decline among the three while DANGCEM recorded the least decline YTD among its peers with a share price decline of -0.37% which is above the YTD performance of the NSE-ASI.


Table 4: Peer Analysis on Share Price Performance 

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Reviewed quarterly, DANGCEM topped its peers in terms of share performance, and this happened in Q4 2018 and Q1 2019 even though it recorded a decline in Q4 2018. While its peers declined in Q1 2019, DANGCEM recorded a marginal increase of +0.69% in share price. Overall in 2018, CCNN emerged the top gainer while WAPCO topped the losers list.

Chart 5- YTD Share Price Performance of CCNN Compared with Peers

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Source: Proshare Research


Doing a five-quarter peer analysis shows that none of the listed cement companies experienced positive price growth YTD although DANGCEM recorded positive price growth in Q1 2019.


CCNN Financials Compared with Peers

Table 5: Peer Analysis of Financials



QoQ Performance Score





Asset Growth





Liability Growth





Net Asset Growth










PAT Growth





Source: Companies Quarterly and Annual Reports


Although the effect of merger reflected in the result of CCNN, DANGCEM has been able to increase its net asset by +21% from N986.613bln in Q1 2018 to N1046.709bln in Q1 2019. Overall, the bottom line results of the company improved QoQ as Net assets grew by +1% and +21% respectively while total liability declined by -19% QoQ. However, the top line was not impressive QoQ as the company’s performance saw a decline over the period.


Balance Sheet Financials Compared with Peers

Chart 6- Peer Analysis on Growth in Assets, Liabilities & Net Assets


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Source: Proshare Research


Increase in retained earnings in Q1 2019 contributed to the growth recorded in the net asset as DANGCEM was able to reduce total liabilities while CCNN topped its peers in all the indicators.


Chart 6- Q1 2018 & Q1 2019 Total Assets of CCNN and Peers

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Source: Proshare Research


DANGCEM has more assets than CCNN and WAPCO combined as its total assets grew by +1% to N1.74 Trillion at the end of Q1 2019. However, CCNN has been impressive in terms of recording growth in its financials especially in the growth of its assets as it recorded +1,223% in asset growth QoQ while, WAPCO experienced a decline in its asset from N562.56bln recorded in Q1 2018 to N546.23bln recorded in Q1 2019.

Chart 7- Q1 2018 & Q1 2019 Total Liabilities of CCNN and Peers


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Source: Proshare Research


Chart 8- Q1 2018 & Q1 2019 Net Assets of CCNN and Peers

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Source: Proshare Research


Top-line and Bottom-line Compared with Peers

Overall, the revenue and PAT performance of DANGCEM was unimpressive QoQ. DANGCEM and WAPCO recorded -1% and -11% decline each in revenue during Q1 2019 and Q3 2018 respectively while WAPCO recorded -223% decline in loss as a result of effectively managing and reducing the companies cost of sales and operating expenses as well as an income tax credit of N1.54bn during the period.

However, the revenue profile of CCNN at the end of Q1 2019 reveals a surge in the revenue growth rate from +23.97% in Q1 208 to 213% in Q1 2019. Attributed to this was the increase in the sale of cement as a result of an increased expansion accompanied by the use of alternative sources of energy. Therefore, gross sale of cement in Q1 2019 was N19.02bln up from N5.98bln recorded from the gross sale of cement in Q1 2018.


Chart 9- Peer Analysis on Growth in Revenue and PAT


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Source: Proshare Research


Chart 10- Q1 2018 & Q1 2019 Revenue of DANGCEM and Peers

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Source: Proshare Research


Chart 11- Q1 2018 & Q1 2019 PAT of DANGCEM and Peers

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Source: Proshare Research


NB: WAPCO is yet to release its 2018 audited result and Q1 2019 unaudited result. Therefore, the company’s financials were compared using Q1 2018 and Q3 2018 unaudited results.



Even though WAPCO is yet to release its Q1 2019 result, the Q1 2019 result of both DANGCEM and CCNN shows that competition is increasing in the cement industry with increasing volumes thereby denoting a case of price war taking a toll on margins of the firms. 

Although when compared to its financial performance in 2018, the performance of DANGCEM in Q1 2019 was not too impressive as it reflects the effect of increased competition, which outweighed the level of cement consumption.

In terms of share price, DANGCEM tops its peers as it was the only one with a positive share price growth in Q1 2019. YTD, it records the least decline in share price as its share price decline of -0.37% YTD is the lowest.


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