Nigeria’s two biggest cement factories, Dangote Cement and BUA Cement spent a whopping sum of N204.925 billion on fuel and power during the half year ended June 30, 2023.
A look at the financials showed that Dangote Cement spent the sum of N157.020 billion during the half year 2023 as against N129.957 billion in 2022 representing a growth of 20.82 per cent.
Following the high cost of sales, profit after tax grew marginally by 3.77 per cent to N178.603 billion for the half year 2023 as against N172.104 billion in 2022. The cost of sales grew by 18.80 per cent to N383.088 billion from N322.461 billion.
Similarly, BUA Cement spent N47.905 billion on energy in the first half of 023, representing an increase of 9.92 per cent over N43.580 billion reported in 2023.
Profit after tax was N63.616 billion in 2023 as against N61.363 billion in 2022, accounting for an increase of 3.67 per cent while the cost of sales stood at N114.943 billion in the half-year of 2023 from N97.503 billion in 2022, representing a growth of 17.88 per cent.
Dangote Cement on the other hand complained that it recorded lower volumes due to surging inflation.
According to the company’s six months of unaudited results, sales volume for pan-African operations was up 11.6 per cent compared to 4.9Mt in the first half of 2022. The total pan-African volume accounts for 40.4 per cent of Group volumes in the half year.
Chief Executive Officer of Dangote Cement, Arvind Pathak said: “Dangote Cement delivered positive results in the first half of the year. Our Nigeria operations achieved a 22.6 per cent recovery in sales over the first quarter, which was impacted by the general elections and the cash crunch. However, the steep currency devaluation in mid-June slowed this volume recovery and increased the already inflated operating cost.”
According to data, the profit after tax of these companies stood at N242.219 billion from N233.467 billion in 2022 representing a 3.75 per cent increase.
The profits were impacted by the rise in production cost of sales which was driven mainly by an uptick in raw materials cost and cost of energy.
The rising cost of sales swallowed much of the earnings following rising inflation and high exchange rate. The cost of sales for the firms stood at N498.031 trillion for the half year 2023 as against N419.964 billion in 2021, accounting for a growth of 41.15 per cent.
