This archive report was first published on 2 September 2019.
Published on September 2, 2019, Dangote Cement, Africa's largest cement manufacturer, continued to face challenges in Nigeria and other key African markets, but recorded a significant improvement in Tanzania.
The company's half-year revenues declined by three percent to $1.2 billion from $1.3 billion in the same period in 2018, largely due to lower volumes and net average prices in Nigeria.
However, the group's pan-African operations posted a 2.7 percent rise in sales to 4.7 million tonnes, up from 4.6 million tonnes over the same period in 2018.
Despite this, the group operating profit declined by 15 percent to $464.6 million, from $546.5 million in 2018, due to the depreciation of the Nigerian naira.
According to Dangote Group chief executive Joe Makoju, the company's variable costs continue to be affected by foreign exchange effects as well as higher fuel and distribution costs.
However, Dangote Cement tripled its market share in Tanzania to 22 percent from seven percent last year, after resolving operational challenges that resulted in a significant rise in sales.
The company's switch to gas turbines at its Mtwara plant in Tanzania was a significant turnaround in terms of saving costs and uninterrupted production, with uptake driven by the government's vast investments in infrastructure projects.
These projects include the Dar es Salaam-Morogoro railway, the Kenya-Tanzania railway, major road and bridge projects, and commercial housing.
Despite facing challenges in Ethiopia, where electricity rationing and shortage of foreign currency resulted in a decline in sales, Dangote Cement is optimistic that the rains which have begun to normalise water levels in the country's hydroelectric power cascade could result in a rise in sales in the second half.
