Dangote Cement to Transition Trucks to CNG
…Announces Record Financial Results
By Patience Ikpeme
Aliko Dangote, Chairman of Dangote Cement Plc, has announced that the company is preparing for a major shift in its logistics operations by converting its fleet of delivery trucks to run on Compressed Natural Gas (CNG).
This move aligns with the Federal Government’s push for alternative fuel usage and aims to enhance Nigeria’s energy independence.
Dangote made this announcement at the 15th Annual General Meeting (AGM) of Dangote Cement Plc, held in Lagos.
He noted that this transition supports President Bola Tinubu’s Renewed Hope Agenda, which promotes the adoption of CNG to reduce reliance on fossil fuels.
“By the end of next year, all our trucks will be running on CNG,” Dangote told the excited shareholders. “This investment will support the government’s goals and help secure a more stable energy future for our nation.”
Despite challenging economic conditions, Dangote Cement reported impressive financial results for 2023. The company increased its dividend payout by 50%, from ₦20.00 per share in 2022 to ₦30.00 per share. This decision was met with applause from shareholders, who were pleased with the company’s performance.
Dangote also shared updates on the company’s expansion efforts. A new plant with a capacity of 6 million metric tonnes per annum is under construction in Itori, Ogun State, and is expected to be completed on schedule despite logistical challenges at Apapa Port in Lagos.
The company’s financial performance in 2023 included a double-digit growth in revenue, reaching ₦2,208.1 billion. Group EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) hit a record high of ₦886.1 billion, a 25.1% increase. These results were driven by robust cost control measures and diverse operations across Africa, which now contribute 41.2% to the Group’s overall volumes.
“We made significant strides in our expansion initiatives, including the launch of a 0.45Mta grinding plant in Ghana and the nearing completion of a 1.5Mta grinding plant in Côte d’Ivoire,” Dangote added. “Our 6Mta Itori plant in Ogun State is crucial for supporting our ambitious export goals.”
Dangote Cement recorded a 36.4% increase in group revenue to ₦2,208.1 billion, with Profit After Tax (PAT) rising by 19.2% to ₦455.6 billion. Earnings per share grew by 18.8% to ₦26.47. The company also increased its market share across Africa, with pan-African volumes up by 12.7% to 11.3 million tonnes.
Group Managing Director Arvind Pathak echoed Dangote’s sentiments in his interview with the media during the AGM. He highlighted the success of the company’s diversification strategy, which helped buffer against country-specific risks and drive up revenues. Pan-African revenue surged by 123.2% to ₦925.9 billion, while EBITDA from these operations increased four-fold to ₦263.7 billion.
Pathak noted that the company’s response to inflation included innovative strategies such as fuel mix optimization and transitioning from diesel to CNG trucks, which helped contain costs and protect margins.
Shareholders praised the management for their impressive performance. Mrs. Bisi Bakare, Chairperson of the Pragmatic Shareholders Association, expressed satisfaction with the substantial dividend payout, especially given the economic challenges. Dr. Faruk Umar, President of the Association for the Advancement of Rights of Nigerian Shareholders (AARNS), commended the company’s sound management and its efforts to reduce petroleum product prices.
The AGM showcased Dangote Cement’s resilience and strategic direction, highlighting its commitment to sustainable growth and shareholder value despite a tough economic climate.
