Cement war: Dangote, BUA and Lafarge reap $2 trillion in revenue in 2021
Nigerian cement production giants, Dangote, BUA Cement and Lafarge achieved sales of N1.93 trillion in 2021 as construction activities picked up during the year after the recession in the last year.
Specifically, revenue generated by the three listed cement companies increased by 31.2% year-on-year from N1.47 trillion generated in 2020. Similarly, the companies’ overall profit also increased by 33.3% to reach 505.52 billion naira against 379 billion naira. .25 billion recorded the previous year.
This is according to data gathered by Nairametrics Research from audited financial statements available on the Nigerian Stock Exchange.
The data also showed Dangote Cement recorded the highest gross revenue of N1.38 trillion, followed by Lafarge Africa with N293.1 billion and Bua Cement with revenue of N257. .33 billion naira.
Moreover, overall, they boast of a total asset value of N3.65 trillion, accounting for over 5% of Nigerian real GDP, while their net assets stood at N1.76 trillion. naira.
The overhaul of the economy boosts turnover
Construction activities resumed their full swing in 2021 after the restart of infrastructure projects and construction across the country, which were suspended due to movement restrictions imposed by the federal government to curb the spread of the coronavirus pandemic. Covid-19.
According to data from the National Bureau of Statistics, Nigeria’s construction sector grew by 3.46% year-on-year in real terms in 2021, from a contraction of 7.68% recorded the previous year, to stand at a valuation of 2.52 trillion naira. .
In addition, the cement industry recorded a real growth of 6.64% year-on-year in the year under review, compared to an expansion of 3.88% recorded in the previous year. Undoubtedly, the improved activity in the cement industry and the construction of the economy has given rise to the improvement recorded by the cement companies in both their turnover and their net income.
Below is a breakdown of the financial performance of the three cement companies listed in Nigeria.
Dangote Cement – N1.38 trillion, +33.8%
The most capitalized manufacturing company in the Nigerian stock market, Dangote Cement had a turnover of 1.38 trillion naira in the year under review, up 33.8% from 1.03 trillion of naira generated in the previous year.
- A breakdown of revenue showed that N956.96 billion came from domestic sales, while N36.44 billion came from export sales.
- With its cost of sales listed at N551 billion, its gross profit rose to N832.61 billion, resulting in a gross profit margin improvement of 60.2% from the 57.7% recorded the previous year. .
- Dangote Cement also increased its net profit by 32% to N364.4 billion in 2021, printing ROE and ROA of 37% and 15.2% respectively.
- Furthermore, its net assets increased by 10.4% to N983.7 trillion, while total assets jumped by 18.3% to N2.39 trillion in December 2021.
Lafarge Africa – 293.1 billion naira, +27.1%
Lafarge Africa achieved a revenue of 293.1 billion naira in 2021, surpassing the 230.57 billion naira recorded in 2020 by 27.1%. Similarly, the cement giant also recorded a growth of 65 .4% of its after-tax profit of N51 billion against N30.84 trillion recorded the previous year.
- In the same vein, gross profit improved by 31% to N142.58 billion in 2021 from N108.86 billion recorded in 2020. Its gross profit margin also improved slightly to N48. .6% in 2021, compared to 47.2% the previous year.
- The company’s revenue breakdown showed that N285.12 billion came from cement sales, N7.63 billion from aggregate and concrete sales, while the company earned N338.6 million from the sale of mortar.
- Its profitability ratios also evolved in the positive direction, with ROE and ROA improving to 13.5% and 9.47% against 8.6% and 6.1% respectively.
- Net assets also grew by 5.3% year-on-year to N378.56 billion in 2021 from N359.65 billion recorded the previous year, while total assets increased to 526. 84 billion naira.
Cement BUA – N257.33 billion, +22.9%
BUA Cement generated revenue of N257.33 billion in 2021, increasing its revenue by 22.9% from the N209.44 billion recorded the previous year. Further verification of the company’s audited report revealed that N256.7 billion came from the sale of bagged cement, while the rest came from the sale of bulk cement.
- In terms of net profit, Bua Cement recorded a 24.5% increase in profit after tax, following a 26.7% growth in gross margin.
- In line with the performance of others, its gross profit margin improved to 47% in 2021 from 45.6% recorded the previous year.
- On the other hand, its total asset value declined by 4.9% to N728.6 billion, owing to the decline in the value of its current assets, particularly its trade receivables and other receivables.
- Its net assets, however, increased by 5.9% to N398.1 billion in December 2021.
Why this case
The Nigerian cement industry is a growing sector of the Nigerian economy, largely linked to the performance of the construction sector. The cement industry represents only 0.91% of Nigeria’s real GDP. However, improving the performance of cement producers will have a significant impact on the economic value that the sector represents for the country’s economy as a whole.