Despite operational challenges, Dangote enterprises announce N1.5 trillion in revenues
In the first nine months of 2022, three Dangote companies listed on the floor of the Nigerian ExchangeGroup (NGX) generated combined revenue of N1.51 trillion (N2.01 trillion annualized).
This is stated in the companies' unaudited Q3 2022 results that were made public by the Nigerian Exchange. The organizations up for consideration are Nascon Allied Industries, Dangote Cement, and Dangote Sugar.
The Dangote companies' aggregate revenue was more than the N1.2 trillion reported during the same period previous year. The review period saw a decline in their total income from N296 billion to around N240.8 billion due to rising operational expenses.
Numbers increasing despite challenges: Despite inflationary pressure, where businesses and their customers have had to deal with the rising cost of products and services, the enterprises have thrived thanks to aggressive expansion.
However, like other industrial companies, their output has been negatively impacted by the irregular fuel supply, which has led to an increase in production costs.
They have also been harmed by the epileptic power supply, which restrains the expansion of manufacturers. This has continued to be a significant obstacle for manufacturers in Nigeria, the continent's largest economy.
It is impossible to overstate the impact of the declining exchange rate on businesses given their dependence on the importation of raw materials.
The companies' revenue increased by 27.54% year over year to N1.51 trillion in the nine months that ended in September 2022 from N1.24 trillion in the same period of 2021, according to data recorded by Nairametrics.
However, a large portion of the profits were lost due to growing sales costs after declining currency exchange rates and rising inflation. Over 49% of the revenue was accounted for by the enterprises' total cost of sales, which for the nine-month period was N739.86 billion as opposed to N577.1 billion the year prior.
Analyse breakdown: A quick glance at the financials revealed that Nascon Allied Industries Plc, Dangote Sugar Plc, and Dangote Cement Plc continued to generate the most income.
During the nine months that concluded in September 2022, Dangote Cement reported revenue of N1.18 trillion (N1.57 trillion annualised). Revenue climbed by 15.2% from N1.02 trillion in the first nine months of 2021 to the same period in 2022.
The company is expanding its Pan-African reach by setting up grinding plants in Ghana and Cote d'Ivoire in addition to scaling up production at the Okpella factory.
The management of Dangote Cement reported an increase in cement sales overall during the third quarter of 2022 of 6.2% to 20.8 metric tons.
The corporation claims that this was accomplished despite higher inflation brought on by a highly unstable global economy.
The company also opened its power plant in Okpella to improve cement supplies across its operational base, and plans to set up grinding facilities in Ghana and Cote d'Ivoire are moving along well.
Michel Puchercos, the chief executive officer of Dangote Cement, further explained that "to mitigate the impact of the significant increase in energy and AGO costs, we are strengthening our efforts to ramp up the usage of alternative fuels." He made this disclosure while presenting the Q3 2022 results.
"We have co-processed 101,553 tonnes of garbage so far this year, which represents a 77% increase from 2021. We plan to start operating the alternate fuel feed system at the Obajana lines I, V, and II in November.
In order to decrease our reliance on AGO, we are also increasing our investment in compressed natural gas, or CNG.
In the nine months that concluded in September 2022, Dangote Sugar's revenue increased by 47.5% to N288.32 billion, from N195.5 billion the previous year. In the same time frame, net profit increased by 60.1% to N24.83 billion.
Speaking about the third quarter 2022 results, Group Managing Director of Dangote Sugar Refinery Plc, Mr. Ravindra Singhvi, stated that Dangote Sugar Refinery, Nigeria's largest producer of household and commercial sugar with 1.44M MT refining capacity, had continued to implement its plans for sugar backward integration project and improved its out-growers scheme to support the economic development of the nearby communities.
When the initiatives have fully taken off, the company's goal, according to him, is to build a solid out-grower plan with no fewer than 5,000 outgrows.
This was in addition to the accomplishment of other goals of its "Sugar for Nigeria Project" strategy, he said.
The achievement of the Dangote Sugar Backward Integration Projects targets and positioning Nigeria on the route to sugar self-sufficiency and the global sugar map are the sugar refinery's primary goals.
The company's operations at the Apapa Refinery, its Sugar Backward Integration Operations in Numan, Adamawa, and Tunga, Nasarawa, continue to place a high focus on the health and safety of its employees as well as that of its business partners.
Additionally, Nascon Allied Industries Plc reported revenue of N40.61 billion for the nine months that ended in September 2022, up 62.8% from the N24.9 billion earned during the same period in 2021.
The price hikes implemented for all of Nascon's salt products were what caused the increase. While revenue from the Western (+14.6% y/y | 22.1% of revenue), Eastern (+54.2% y/y | 6.7% of revenue), and North (+71.2% of revenue) areas all maintained the momentum shown so far in 2022, respectively, the North continued to contribute the most to the total sales outturn.
“Nascon's Q3-22 result illustrates the company's resiliency since the turn of the year despite the challenging operating environment and fierce competition from Royal Salt in the retail market," say analysts at Cordros Capital. Despite the significant headwinds during the year, the food manufacturer kept margins at still-high levels. In light of the company's resilience thus far in 2022, we anticipate it will finish the year strongly expanding both its top and bottom lines.
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