Dangote Cement buys back N41.2b shares

Dangote Cement Plc has repurchased about N41.2 billion worth of its issued shares from open transactions at the stock market.

Regulatory filing at the Nigerian Exchange (NGX) indicated that Dangote Cement in several transactions spanning two trading sessions repurchased about 0.71 per cent of its issued share capital from the open market, under the first tranche of share buyback programme aimed at reducing the group’s issued shares by some 10 per cent.

The report indicated that Dangote Cement repurchased 121.40 million ordinary shares of 50 kobo each worth N41.16 billion at an average price of N339 per share. The total number of repurchased shares fell below the group’s initial target of 168.74 million shares or one per cent of the issued share capital.

With the completion of the first tranche of the buyback programme, the total number of issued and fully paid outstanding shares of the group reduced to 16.75 billion ordinary shares of 50 kobo each.

The company stated that the execution of the first tranche did not have any material impact on the company’s financial position.

Shareholders of Dangote Cement had at an extraordinary general meeting in December 2022 approved a new share buyback scheme for the group within the framework provided under Section 186 (c) of the Companies and Allied Matters Act, No. 3 of 2020 (CAMA) and Rule 398 (3)(xiv) of the Securities and Exchange Commission (SEC)’s Rules and Regulations, 2013 and in accordance with Rule 13.18 of the Rulebook of the Nigerian Exchange (NGX), 2015.

According to the new programme, the number of shares to be repurchased under the share buyback programme will not exceed 10 per cent of the group’s issued capital.

Under the plan, the company will through its appointed stockbrokers at its discretion purchase its shares in the open market over a specified duration, subject to prevailing market conditions and under the current daily trading rules of the NGX.

However, Dangote Cement will not be under any obligation whatsoever to purchase any or all of the its shares put on offer over the duration of the specified buyback tranche.

Key extracts of the audited report and accounts of Dangote Cement Group for the year ended December 31, 2022 showed sustained growths across major indices, with group turnover rising by 17 per cent from N1.38 trillion in 2021 to N1.62 trillion in 2022. Gross profit rose from N832.62 billion in 2021 to N955.43 billion in 2022.

The performance of the company was however moderated by considerable increase in operating expenses and finance costs. Administrative expenses rose from N64.35 billion to N79.88 billion. Selling and distribution expenses jumped from N191.65 billion to N295.23 billion. Operating profit thus stood at N585.88 billion in 2022 as against N582.49 billion in 2021.

Finance costs leapt to N130.37 billion in 2022 compared with N65.71 billion in 2021. This moderated pre-tax profit from N538.37 billion in 2021 to N524 billion in 2022. The group made tax provisions of N141.69 billion in 2022 as against N173.93 billion in 2021. Group net profit increased by 5.0 per cent from N364 billion to N382 billion. Earnings per share thus improved to N22.27 in 2022 as against N21.34 in 2021.

The balance sheet of the group also emerged stronger. Total assets increased from N2.39 trillion in 2021 to N2.62 trillion in 2022. Shareholders’ funds crossed the trillion naira mark to N1.08 trillion in 2022 as against N983.67 billion in 2021.

On a standalone basis, the parent company showed stronger performance with total sales rising by 21 per cent from N993 billion to N1.21 trillion. Company’s net profit increased by 6.0 per cent N403 billion in 2022 as against N381 billion in 2021. Company’s earnings per share rose from N22.42 in 2021 to N23.87 in 2022.

According to the company, the repurchased shares will be held as treasury shares and may subsequently be cancelled.