Dangote sells most cement in five years as profit jumps to N278bn
Dangote Cement Plc on Tuesday reported the highest revenue in five years and a 37.7 per cent increase in its profit after tax for the 2020 financial year, compared to the previous year.
That’s despite a raging pandemic that negatively affected several corporates in 2020.
The impressive performance is likely to rub off on the Cement maker’s shares in today’s trading.
The company, Africa’s largest cement producer, said its after-tax profit increased to N278.1bn last year from N200.52bn in 2019.
Its profit before tax grew by 49.04 per cent to N373.31bn in 2020 as revenue rose by 16 per cent to N1.03trillion, the most in five years, according to its audited results released Tuesday.
Dangote Cement saw its sales volumes increase by 8.6 per cent to 25.7 million tonnes last year. Chief Executive Officer, Michel Puchercos, said in a statement that despite the impact of the COVID-19 pandemic, 2020 was a record year for Dangote Cement across the board.
“Several firsts made 2020 a productive year such as our maiden clinker shipment, maiden bond issuance and successful buyback programme,” Puchercos said.
The cement maker increased its capacity by 3Mt in Nigeria and commissioned two export terminals and a gas power plant in Tanzania.
While the growth in revenue was supported by strong cement demand, Puchercos said profitability was further bolstered by the group’s disciplined cost control measures in what it believed to have been a highly inflationary and volatile year.
Oil slips to $60 as Europe battles COVID third wave
The international oil benchmark, Brent crude, fell more than six per cent on Tuesday, tumbling as concerns over new pandemic curbs and slow vaccine rollouts in Europe compounded additional crude volumes.
Read Also: Clogged ports ground Nigeria’s exports
Brent, against which Nigeria’s crude oil is priced, fell by $4.09 to $60.53 per barrel as of 9:07pm Nigerian time on Tuesday, while the United States West Texas Intermediate dropped by $4.01 to $57.55 per barrel.
Both benchmarks traded near lows not seen since February 9, according to Reuters.
According to the international news agency, the front-month Brent spread flipped into a small contango for the first time since January.
Contango is where the front-month contracts are cheaper than future months, and could encourage traders to put oil into storage.
The road to oil demand recovery appears to be full of obstacles as the world continues to fight the COVID-19 pandemic, according to Bjornar Tonhaugen, the Head of Oil Markets at Rystad Energy.
Extended lockdowns in Europe are being driven by the threat of a third wave, with a new variant of the coronavirus on the continent.
Germany, Europe’s biggest oil consumer, is extending its lockdown until April 18.
Nearly a third of France entered a month-long lockdown on Saturday following a jump in cases in Paris and parts of northern France.
Oil prices are steady today after briefly trimming the decline as a 400-meter-long container ship became wedged lengthways across the Suez canal — the world’s busiest maritime trade route — causing a pileup of at least 100 vessels.
AstraZeneca’s latest stumble
In a two-page letter, federal health officials and an independent panel of medical experts accused AstraZeneca of cherry-picking data about the effectiveness of its Covid-19 vaccine.
The company had said that based on its U.S. trial, the vaccine appeared to be 79 percent effective at preventing Covid-19. But the panel said its efficacy might have been between 69 percent and 74 percent, and it reprimanded AstraZeneca for an overly rosy description of the trial data.
AstraZeneca defended the data it had released on Monday and said that the interim results appeared to be “consistent” with more recent data collected during the trial. The company said it would reissue fuller results within 48 hours.
The results throw a wrench into the efforts of elected leaders elsewhere to rebuild trust in the shot. Faith in the vaccine had already plunged across Europe after recent reports that a very small number of recipients had developed unusual blood clots.
The European Union will today make public emergency legislation allowing it to curb exports of Covid-19 vaccines manufactured in the bloc for the next six weeks. The new rules will make it harder for companies like AstraZeneca that produce Covid-19 vaccines in the E.U. to export them, and it is likely to disrupt supply to Britain.
Exporters pay price of clogged ports
An exporter that left Kano for Lagos with a consignment of Sesame, which in the last quarter of 2020 was Nigeria’s top agricultural export with a value of N270 billion, is about to encounter a rude shock. Worth a few billions, the value of this shipment heading to Lagos is a fraction of what Nigeria typically exports. But this would now be delayed for at least 2 weeks because the Lagos ports are clogged, and the Nigerian Ports Authority (NPA) has suspended trucks with export goods.
According to the NPA, over 600 trucks are trapped within the port corridor for different reasons, and until they are cleared, others planning to export are on hold until further notice, or two weeks, if that deadline is made sacrosanct.
The situation is a tricky one for exporters as it could significantly disrupt their business.
In two weeks, anything can happen in an industry where transactions are bound by contracts and deadlines. Exporters who have to wait until the current backlog is cleared would have also formed another lengthy queue of exports, and would essentially be back to square one unless the perennial inefficiencies plaguing the Nigerian ports administration are actually fixed.
The delay in time to export would further worsen the conditions of export businesses struggling to survive in a fragile economy that is also in dire need of foreign exchange, which ironically, these same businesses would bring if life is not snuffed out of their operations.
Nigeria spends lowest in six years servicing T-Bills
The federal government spent the lowest amount it has in six years to service debt raised through Treasury Bills last year thanks to a low-interest-rate environment that crashed borrowing costs.
This comes as investors of fixed-income instruments were left with nothing to cheer after higher inflation amid a low-interest-rate environment meant they settled for negative real return on their assets.
The interest payment on Nigeria’s fixed income instrument, particularly treasury bills fell to N318.04 billion, the lowest in six years, according to data analyzed by BusinessDay from the Debt Management Office (DMO).
That’s a decline of 9.7 percent and 50.4 percent from the N352.3 billion and the N640.68 billion, spent servicing T-bills in 2019 and 2018 respectively.
The decline in interest was despite T-bills sales hitting a three-year high of N3.44 trillion in the period, a pointer to how the low yields helped the government in paying less as interest on the short-term instruments than it would have paid if rates were much higher.
