Dangote Cement mulls N406b share buyback
Dangote Cement Plc plans to buy back 10 per cent of its issued share capital in a transaction valued at more than N406 billion, it was learnt at the weekend.
The company is seeking to buy back some 1.704 billion shares from its existing 17.04 billion ordinary shares under the share buyback arrangement that may see the company directly mopping up its shares at the stock market. Dangote Cement’s share price closed weekend at N238.50 per share.
The Alhaji Aliko Dangote-led board of directors of Dangote Cement has summoned an extraordinary general meeting of shareholders to consider and approve the share buyback.
The company stated that the share buyback was in line with its corporate strategy, an indirect way to increase return on equity and shareholder value.
In a regulatory filing obtained yesterday, the company explained that the shares will be repurchased out of its profit and such repurchased shares may be held as treasury shares or cancelled, thus leading to reduction in the share capital.
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Key extracts of the audited report and accounts of Dangote Cement for the year ended December 31 2021 showed that turnover rose from N1.03 trillion in 2020 to N1.38 trillion in 2021. Nigeria’s contribution to group sales increased from N719.95 billion in 2020 to N993.3 billion in 2021. Other African operations contributed N397.32 billion in 2021 as against N318.68 billion in 2020.
The group sales volume stood at 29.3 metric tonnes, with Nigeria accounting for 18.61 metric tonnes while operations in other countries contributed 10.86 metric tonnes. Gross profit stood at N538.37 billion while net profit after tax closed 2021 at N364.44 billion.
The firm is sub-Saharan Africa’s largest cement producer with an installed capacity of 45.6 metric tonnes per annum across 10 African countries. It operates a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales, and distribution of cement.
Dangote Cement has a long-term credit rating of AA+ by GCR and Aa2.ng by Moody’s due to its position, significant operational scale and strong financial profile evidenced by the company’s operating and net profit margins relative to regional and global peers, adequate working capital, satisfactory cash flow and low leverage.