NIGERIA – Dangote Cement Plc has obtained the approval of its board of directors to access the capital market for a medium-term debt funding under its N300 billion (US$818.1 million) bond registration programme.

The cement firm in a statement filed at the Nigeria Stock Exchange (NSE) has said it intended to issue its maiden series of bonds, tagged ‘Series 1 Bonds’, subject to obtaining regulatory approvals and favourable market conditions.

“The process of obtaining requisite approvals from the Securities and Exchange Commission for issuance of the series 1 bonds has begun,” the statement signed by Edward Imoedemhe, deputy company secretary stated.

“The management of the DCP has disclosed that the proceeds of the series 1 bonds will be used to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes. Book building for the series 1 will commence following approval of the transaction by SEC.”

Dangote Cement Plc has posted a profit after tax of N200.51 billion (US$546.7 million) for the financial year ended December 31, 2019 as against a profit of N390.325 billion (US$1.06 billion) posted in 2018, representing a drop of 48.63 per cent.

Profit before tax stood at N250.479 billion (US$683 million) from N300.81 billion (US$820.3 million) posted in 2018, accounting for a drop of 16.73 per cent, while its revenue was in the same region at N891.674 billion (US$2.43 billion) as against N901.213 billion (US$2.46 billion) in 2018.

The company lamented that its export volumes in 2019 had been affected by border closure in its home country of Nigeria, trying to combat smuggling.

Joseph Makoju, Dangote’s outgoing chief executive, said the border closure led exports to drop to 0.5 million tonnes in 2019 from 0.7 million tonnes in both 2018 and 2017. He said the company had exported to West and Central Africa from Nigeria.

“Total production volumes last year were flat at 14.1 million tonnes. Higher discounts, marketing and haulage cost caused core profit to fall 9.1 per cent, while margins slid 59.2 per cent,” he said.

Nigeria closed its land border in August to curb smuggling of rice and arms, which it said threatened efforts to boost local production and security and to generate state revenues through import duties, the Nigeria Customs Service said.

Dangote Cement Plc is Nigeria’s largest company by market capitalisation and the largest cement producer in Sub Saharan Africa (SSA) with an installed capacity of 45.6 million tonnes per year across operations in 10 African countries.