Dangote Cement Buys Back N41.2b Shares
By Patience Ikpeme
Dangote Cement Plc has successfully repurchased approximately N41.2 billion worth of its shares from open transactions in the stock market.
This move is part of the company’s first tranche of a share buyback programme which aims to reduce the group’s issued shares by 10%.
During two trading sessions, Dangote Cement repurchased around 0.71% of its issued share capital from the open market. The total number of repurchased shares amounted to 121.40 million ordinary shares with a value of N41.16 billion, at an average price of N339 per share.
Although the number of repurchased shares fell short of the initial target, the completion of this phase reduced the total number of issued shares to 16.75 billion.
Following the repurchase, Dangote Cement plans to hold the bought-back shares as treasury shares, which may subsequently be cancelled. The company emphasized that this transaction had no significant impact on its financial position.
The share buyback scheme was approved by shareholders at an extraordinary general meeting in December 2022. Under this new program, the company can repurchase shares up to 10% of its issued capital.
However, the company is not obliged to purchase any or all of the shares put on offer during the specified buyback tranche.
In its audited report and accounts for the year ended December 31, 2022, Dangote Cement Group demonstrated sustained growth across major financial indicators. Group turnover increased by 17% from N1.38 trillion in 2021 to N1.62 trillion in 2022, while gross profit rose from N832.62 billion to N955.43 billion.
However, the company faced challenges due to a considerable increase in operating expenses and finance costs. Administrative expenses grew from N64.35 billion to N79.88 billion, and selling and distribution expenses surged from N191.65 billion to N295.23 billion. Despite these pressures, operating profit reached N585.88 billion in 2022, slightly higher than the N582.49 billion recorded in 2021.
The increase in finance costs to N130.37 billion in 2022, compared to N65.71 billion in 2021, moderated pre-tax profit from N538.37 billion to N524 billion. Tax provisions amounted to N141.69 billion in 2022, down from N173.93 billion in 2021. Nevertheless, the group’s net profit saw a 5.0% increase, rising from N364 billion in 2021 to N382 billion in 2022. Consequently, earnings per share improved from N21.34 in 2021 to N22.27 in 2022.
Dangote Cement Group also strengthened its balance sheet, as total assets increased from N2.39 trillion to N2.62 trillion between 2021 and 2022. Shareholders’ funds surpassed the trillion-naira mark, reaching N1.08 trillion in 2022 compared to N983.67 billion in 2021.
On a standalone basis, the parent company displayed even stronger performance, with total sales rising by 21% from N993 billion to N1.21 trillion. Net profit increased by 6.0%, reaching N403 billion in 2022 compared to N381 billion in 2021. Furthermore, the company’s earnings per share grew from N22.42 in 2021 to N23.87 in 2022.
