DANGOTE CEMENT PLC Q3 Result – Record Revenue and Profit Growth Reinforce Market Leadership Amid Cost Pressures

Executive Summary

Dangote Cement Plc delivered a robust performance for the nine months ended 30 September 2025, achieving new revenue and profit milestones despite persistent cost inflation, foreign exchange challenges, and energy price volatility. The Group’s revenue rose 23% year-on-year (YoY) to ₦3.15 trillion (9M 2024: ₦2.56 trillion), reflecting sustained domestic demand, price adjustments, and resilient export volumes. Profit Before Tax (PBT) surged 156% YoY to ₦1.04 trillion, while Profit After Tax (PAT) expanded sharply by 166% YoY to ₦743.3 billion, underscoring improved operating leverage and margin recovery. sStrong performance across Nigeria and Pan-African operations, supported by strategic cost management, energy optimization, and higher clinker exports, reaffirmed the Group’s dominant market position and earnings resilience.

Financial Highlights

₦’million Q3 2025 Q3 2024 % Δ YoY 9M 2025 9M 2024 % Δ YoY

Revenue 1,083,159 800,518 +35% 3,154,757 2,560,573 +23%

Production Cost of Sales (432,535) (403,043) +7% (1,286,094) (1,236,316) +4%

Gross Profit 650,624 397,475 +64% 1,868,663 1,324,257 +41%

Administrative Expenses (78,061) (46,847) +67% (202,344) (145,601) +39%

Selling & Distribution Expenses (179,226) (160,243) +12% (500,616) (464,713) +8%

Other Income 23,210 8,192 +183% 63,151 37,149 +70%

Operating Profit 415,865 198,800 +109% 1,226,843 750,400 +63%

Finance Income 9,581 4,331 +121% 77,096 29,129 +165%

Finance Costs (115,624) (118,697) -3% (286,044) (451,219) -37%

Gain on Net Monetary Position 1,120 28,996 -96% 23,081 78,076 -70%

Profit Before Tax 310,942 113,430 +174% 1,040,976 406,386 +156%

Income Tax Expense (88,134) (24,238) +263% (297,713) (127,290) +134%

Profit After Tax 222,808 89,192 +150% 743,263 279,096 +166%

Earnings Per Share (₦) 13.08 5.29 +147% 43.82 16.55 +165%

Revenue Growth and Cost Dynamics

Dangote Cement maintained strong sales momentum during the review period, supported by robust domestic and export volumes as well as strategic price adjustments to offset input cost pressures.

• Revenue grew by 23% YoY to ₦3.15 trillion, driven by higher cement volumes in Nigeria and Pan-African markets and favorable pricing.
• Production costs rose only 4% YoY, well below revenue growth, due to improved energy efficiency, cost optimization, and increased use of alternative fuels across plants in Obajana, Ibese, and Gboko.
• Consequently, gross profit jumped 41% YoY to ₦1.87 trillion, representing a gross margin of 59.2%, up from 51.7% in 9M 2024.

These results highlight management’s effective cost containment strategy despite inflationary headwinds and currency depreciation pressures.

Operating Performance and Profitability

The Group achieved strong operating leverage on the back of higher revenues and cost control:

• Operating profit grew 63% YoY to ₦1.23 trillion, supported by disciplined expense management and higher capacity utilization.
• Other income rose 70% YoY to ₦63.2 billion, reflecting gains from foreign exchange transactions, asset disposals, and operational efficiencies.
• Administrative and distribution expenses increased 39% and 8% YoY respectively, reflecting higher energy, logistics, and personnel costs.
• Finance costs declined 37% YoY to ₦286 billion, underscoring improved debt management and reduced foreign currency exposure, while finance income surged 165% due to higher yields on cash balances and intercompany loans.
• The combined effect delivered a PBT of ₦1.04 trillion (+156% YoY) and a PAT of ₦743.3 billion (+166% YoY), indicating a strong rebound in bottom-line profitability.

Earnings per share advanced to ₦43.82, up from ₦16.55 in the prior year period — a testament to Dangote Cement’s improved earnings capacity and enhanced shareholder value.

Balance Sheet Analysis

₦’million Sept 2025 Dec 2024 % Change

Total Assets 5,741,319 6,403,238 -10%

Total Liabilities 3,305,377 4,227,993 -22%

Total Equity 2,435,942 2,175,245 +12%

Cash & Cash Equivalents 363,952 449,831 -19%

Total Non-Current Assets 3,756,841 4,492,217 -16%

Inventories 769,513 669,662 +15%

Trade & Other Receivables 188,199 116,742 +61%

Interpretation:

• Total assets declined 10% due to lower cash balances and a reduction in certain investment positions, reflecting ongoing debt repayments and dividend distributions.
• Inventories and receivables grew significantly, aligning with increased production and sales volumes.
• Total liabilities fell 22%, largely due to a decline in financial liabilities and improved working capital efficiency.
• Shareholders’ equity increased 12%, supported by retained earnings, which rose to ₦1.27 trillion from ₦1.08 trillion at FY2024.
• The Group remains well-capitalized, with a debt-to-equity ratio of approximately 0.57x, highlighting financial stability and headroom for expansion.

Key Ratios and Margins

Metric 9M 2025 9M 2024 Change

Gross Margin 59.2% 51.7% +7.5pp

Operating Margin 38.9% 29.3% +9.6pp

PBT Margin 33.0% 15.9% +17.1pp

PAT Margin 23.6% 10.9% +12.7pp

ROE 31.0% 15.8% +15.2pp

ROA 12.9% 6.2% +6.7pp

Cost-to-Income Ratio 40.4% 47.5% -7.1pp

Interpretation:

• Strong margin expansion was driven by higher prices, improved cost efficiencies, and reduced finance costs.
• Return on Equity (ROE) nearly doubled to 31%, reflecting higher profitability and efficient capital deployment.
• The decline in the cost-to-income ratio further emphasizes improved operational efficiency.

Strategic Context

Dangote Cement remains the largest cement producer in Africa, with integrated operations spanning Nigeria and nine Pan-African countries. The company’s strategy continues to focus on:

• Optimizing energy costs through coal substitution and alternative fuels.
• Expanding export markets to boost foreign exchange earnings.
• Sustainability initiatives including alternative fuels, waste heat recovery, and environmental management.
• Digital transformation through the “Dangote Retail” platform to enhance customer engagement and distribution efficiency.

These strategic priorities continue to underpin operational resilience, market leadership, and sustainable growth.

Strengths

• Market dominance with significant pricing power across Africa.
• Strong revenue and profit growth despite macroeconomic headwinds.
• Improved cost management and reduced finance expense.
• Expanding export footprint and diversification into new markets.
• Healthy capital structure with strong cash generation capacity.

Weaknesses

• Rising administrative and logistics costs due to inflation and energy volatility.
• High working capital tied up in receivables and inventory.
• Currency risk exposure across Pan-African operations.

Outlook

Dangote Cement is well positioned to sustain its earnings growth trajectory into Q4 2025 and beyond. The combination of high cement demand from infrastructure projects, housing developments, and regional exports will continue to support topline momentum. Management’s ongoing investments in energy efficiency, alternative fuels, and capacity expansion are expected to further lower production costs and enhance margins. However, inflationary pressures, naira volatility, and logistic constraints remain key downside risks that could temper margin expansion in the near term. Dangote Cement enters Q4 2025 with strong earnings momentum. Ongoing infrastructure spends and housing demand across Africa, combined with disciplined pricing and energy cost efficiencies, supports sustained profitability.

Positive catalysts ahead:

• Completion of Itori plant — incremental domestic and export capacity
• Continued scale-up of alternative fuel program
• Lower logistics cost trajectory via CNG fleet maturity
• Regional market penetration and export corridor expansion

Risks remain around inflationary input costs and FX volatility, but operational flexibility and scale mitigate downside impact.

Analyst Commentary

“Dangote Cement’s stellar 9M 2025 results demonstrate its unmatched scale, pricing discipline, and operational resilience. With a 156% surge in pre-tax profit and strong balance sheet fundamentals, the Group continues to outperform the broader industrial sector. Strategic cost control and diversification efforts are driving sustainable profitability, positioning Dangote Cement as a core holding for long-term investors seeking exposure to Africa’s infrastructure growth story.”

Dangote Cement continues to demonstrate best-in-class execution, leveraging scale and disciplined cost control to unlock substantial margin expansion. Record 9M profitability, robust balance-sheet health, and continued investment in energy-efficient capacity reaffirm a structurally strong investment case. As Africa’s infrastructure cycle deepens and export markets open further, Dangote Cement remains a core long-term value compounder in the industrial and infrastructure investment universe.

Conclusion

Dangote Cement Plc’s 9M 2025 results reinforce its position as Africa’s premier cement producer and one of Nigeria’s most profitable industrial conglomerates. The Group’s ability to deliver record earnings despite macroeconomic headwinds underscores superior operational efficiency, strategic foresight, and financial strength. With sustained margin expansion, solid cash flow generation, and ongoing regional diversification, Dangote Cement remains well-positioned to deliver long-term value and maintain its leadership within Africa’s cement industry.