Fakoyejo OlalekanAs earnings report for the first half (H1) period of 2022 emerges from Nigerian cement producers, Prime Business Africa analyses the performance of the Big Three companies operating in the industry.
The revenue generated by the Nigerian cement industry, based on publicly listed firms; Dangote Cement, Lafarge and BUA Cement, rose by 23.2% in first half (H1) of 2022, representing N223.34 billion gain.
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- Dangote Cement, Lafarge and BUA Cement generated a combined N1.18 trillion revenue in the first six months of this year, in contrast to the N959.83 billion turnover the three largest cement producers grossed in H1 2021.
- Prime Business Africa analysis showed that Aliko Dangote’s cement business is losing its market share to BUA Cement, owned by Abdulsamad Rabiu, and South Africa’s Lafarge.
- While Dangote Cement retained its position as the largest market share holder, its contribution to the industry’s revenue fell to 68.2% in H1 2022 (having accounted for 71.94% in H1 last year).
- BUA Cement snapped up what its rival lost, as its share rose to 15.9% (from 12.9%), to become the second largest market share holder, and surpassed Lafarge, which went up 15.7% (from 15.1%)
- Further analysis disclosed that the industry’s profit after tax appreciated marginally by 2.85%, as the construction solutions provider reported N270.87 billion in H1 2022, surpassing the N263.34 billion by N7.52 billion, as Dangote Cement decline weigh heavily on the industry.
Breakdown of Cement companies’ performance
The performance analysed below are listed from the best performing cement company, to the least performing;
BUA Cement (+51.7%)
Rabiu’s company was the best performer in H1 2022, after BUA Cement closed the period with N188.56 billion revenue, up 51.7%, from the N124.27 billion generated in the first half of last year.
- However, while BUA Cement was able to grow its turnover by 51.7%, the management was unable to tame the cost of manufacturing its products, spending N97.50 billion to produce and get its goods to the market in H1 this year. This is 47.3% higher than the N66.15 billion expended in H1 2021.
- At the end of the period in review, Prime Business Africa gathered that BUA Cement’s expenses overshoot its profit after tax, which appreciated by 41.4%, recording N61.36 billion PAT in the first half of 2022, in contrast to the N43.39 billion posted same period last year.
Lafarge Cement (+28.6%)
Despite losing its industry position to BUA Cement, to become the third largest market shareholder, Lafarge Cement’s turnover increased by 28.6%, from H1 2021’s N145.01 billion, to N186.58 billion same period this year.
- During the first half of 2022, Lafarge spent N90.51 billion on producing its cements within six months, which is a difference of 24.7% hike, when compared to the N72.53 billion of H1 2021.
- It’s cost of sales rose behind the company’s profit after tax, which grew 32.08% year-on-year to N37.41 billion year-to-June. It rose above the N28.32 billion PAT that Lafarge reported in H1 2021.
Dangote Cement (+17.01)
Dangote Cement’s revenue grew 17.01% between January to June 2022, generating N808.03 billion, which surpassed the N690.54 billion the company grossed during the same period last year.
- Compared to its market rivals, Dangote’s cement company was able to slow the growth of its expenses, which rose 16.7% (N46.34 billion) from N276.11 billion, to N322.46 billion.
- However, this wasn’t enough to save Dangote Cement’s profit after tax, considering it fell -11.3% year-on-year, to N172.10 billion during the period under review, failing to surpass the N191.63 billion PAT the manufacturer reported in H1 2021 – losing N19.52 billion.
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