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Dangote Cement Breaks Record as Market Value Hits N10 Trillion

The cement giant’s share price rose by 9.99 percent on Monday, January 22, 2024, making it the most valuable company on the NGX.

by Motoni Olodun

Nigeria’s leading cement producer, Dangote Cement Plc, has achieved a historic milestone as its market capitalization reached N10.098 trillion on Monday, January 22, 2024. This is the first time any Nigerian company has crossed the N10 trillion mark, making Dangote Cement the most valuable company on the Nigerian Exchange Limited (NGX).

The cement giant’s share price rose by 9.99 percent to close at N592.60 per share, up from N538.80 on Friday, January 19, 2024. The surge in share price was driven by strong demand from investors, who were impressed by the company’s performance and prospects.

Dangote Cement recorded a 28.7 percent increase in revenue to N1.514 trillion in the first nine months of 2023, while its profit after tax grew by 30.2 percent to N277.5 billion. The company also declared an interim dividend of N16 per share for the period, amounting to N270.4 billion.

The company’s impressive results were attributed to its diversified operations across Africa, its export strategy, and its cost-efficiency measures. Dangote Cement operates in 10 African countries, with a total capacity of 52 million tonnes per annum. The company also has two export terminals in Nigeria, with a combined capacity of 8 million tonnes per annum.

Dangote Cement’s export strategy has enabled it to tap into new markets and earn foreign exchange. In the third quarter of 2023, the company exported clinker to Cameroon, while it also plans to commence clinker exports to Senegal and Ghana in 2024. The company’s clinker exports are expected to boost its earnings and reduce its dependence on the Nigerian market.

The company’s cost-efficiency measures have also helped it to improve its margins and profitability. The company has invested in alternative fuel projects across its operations, which have reduced its energy costs and carbon footprint. The company’s thermal substitution rate increased from 3.8 percent in 2022 to 9.8 percent in the first nine months of 2023. The company also commissioned nine alternative fuel projects in 2023 and plans to commission its Okpella alternative fuel system in December 2023.

Analysts have expressed optimism about the company’s outlook, citing its strong fundamentals, growth potential, and dividend policy. Some analysts have also upgraded their target price for the company’s shares, reflecting their bullish sentiment.

Dangote Cement’s market capitalization of N10.098 trillion represents 25.4 percent of the total market capitalization of the NGX, which stood at N39.7 trillion as of Monday, January 22, 2024. The company’s market value is also higher than the combined market value of the next nine most valuable companies on the NGX, which amounted to N9.9 trillion as of the same date.

Dangote Cement’s remarkable achievement has demonstrated the resilience and strength of the Nigerian capital market, despite the challenges posed by the global and domestic economic environment. The company’s success has also inspired other Nigerian businesses to aspire for excellence and innovation. As the company continues to pursue its vision of becoming a global leader in cement production, it is expected to create more value for its shareholders, customers, and the Nigerian economy.

Source: Business Day

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