One the factors that have endeared the President of Dangote Group, Alhaji Aliko Dangote to invest in the nation’s capital was his decision to list some of the his companies on the Nigerian Stock Exchange (NSE). That decision gave opportunity to investors to share from his wealth through dividends payment. The first company in the Dangote Group to list on the NSE was Dangote Sugar Refinery.
Today there are Dangote Cement Plc, which is the most capitalised on the exchange, Dangote Flour Mills (DFM) Plc and Nascon Allied Industries Plc. These companies have been rewarding shareholders with dividends. However, shareholders in DFM Plc had a raw deal when Dangote Industries Limited (DIL), decided to sell part of that company to South African firm, Tiger Brand in 2012. Soon after the sale, the fortunes of DFM nosedived, leading to accumulated losses. However, in a bid to prevent the company from going under and save several jobs, DIL last December. Months after the re-acquisition from Tiger Brands, Dangote Flour Mills has returned to profitability.
Dangote Flour Mills Plc commenced operations in 1999, as a division of Dangote Industries Limited (DIL), one of Nigeria’s largest and fastest growing conglomerates. Following the strategic decision of DIL to unbundle its various operations, DFM was incorporated in 2006. The restructuring was completed in January, 2006 when the Federal High Court sanctioned a scheme of Arrangement wherein all the assets, liabilities and undertakings of the erstwhile flour division of DIL was transferred to DFM.
From an initial installed capacity of 500 MT per day at its Apapa mill, Dangote Flour has expanded rapidly by opening in quick successions three other flour mills in Kano (2000), Calabar (2001) and Ilorin (2005). Each of the mills started with an installed capacity of 500 MT per day but all of them have subsequently expanded resulting in a total installed capacity of 5,000.
The expansion was in response to a growing national demand for flour and flour based products in addition to the company’s drive for increased market share. Thus from a modest beginning the company has grown to become one of the industry leaders within a six-year period. The company has three wholly owned subsidiaries, comprising Dangote Agro Sacks Limited, Dangote Pasta Limited and, Dangote Noodles Limited.
The company posted a profit before tax (PBT) of N2.64 billion for the nine months ended June 30, 2016, compared to a loss of N9.55 billion posted in the corresponding period of 2015. An analysis of the results showed that Dangote Flour Mills, which consists of Dangote Flour, Dangote Pasta, and Dangote Noodles, recorded a gross profit of N14.03 billion by June 2016 as against N2.62 billion by June 2015. Profit from operating activities rose to N8.47 billion by June 2016 compared with trading loss of N3.48 billion in comparable period of 2015. After tax, net profit stood at N2.84 billion by June 2016 as against net loss of N9.11 billion in 2015. Earnings per share showed 76.5 kobo as against loss per share of N2.42 in 2015.
Gross profit margin more than tripled to 28.14 per cent by June 2016 as against 7.9 per cent in corresponding period of 2015. Pre-tax profit margin stood at 5.3 per cent in 2016, as against negative margin of 28.9 per cent in 2015.
Commenting on the results, Group Chief Executive Officer, Dangote Flour Mills, Thabo Mabe said the return to profitability follows several strategies adopted by the company to increase market share and create value for shareholders. He said that the flour mill is driven by the vision of putting its products on the table of every Nigerian.
Although the re-acquisition of DFM attracted various interpretations, sources close to the DIL had said the company had to consider the repurchase so as to keep the it as a going concern, which preserves value for the minority retail shareholders and also secured direct employment for over 3,000 employees.
“Going by every indication, the future of the company was very doubtful and that was risky for the employees which are over 3,000 Nigerians apart from others who benefit from the company’s services through other ancillary services. The return of DIL is therefore a big relief and good decision to save the jobs of the staff of TBCG,” a market source had said.
The transaction ensured that the company was maintained as a viable going concern, able to retain its employees and meet its obligations to its stakeholders.
Besides, the transaction envisaged that sufficient capital will be injected into the company in order to stabilise the business and place it on a sustainable path aimed at creating value for its stakeholders.
Soon after the repurchasing the company, DIL made fresh efforts to reposition the firm, return it to profitability and deliver returns to shareholders like others in the group. The first move was ensuring a new corporate governance strategy. In this regard, Aliko Dangote left the board, while Asue Ighodalo, a renowned corporate lawyer and Chairman of Sterling Bank Plc was appointed as its new chairman.
Also, DIL appointed Alhaji Ahmed Shehu Yakasai as Executive Director, Supply Chain and Deputy Chief Executive Officer, while Ms. Halima Dangote was appointed Executive Director, Commercial.
Addressing the shareholders of the company, Ighodalo assured the shareholders that the Board and Management of the company would continue to mitigate the effect if these challenges and would work extremely hard to turn around the fortunes of the company.
He said following the repurchase of the entire shareholdings of Tiger Brands, additional capital has been injected into the company.
According to him, “We bought back Dangote Flour Mill from Tiger Branded and by this move, it means we have a stronger, better sophisticated and more focused DFM.
“Since the takeover, we have taken a lot steps to reposition the company through expansion to drive growth. We are also using this medium to restate our commitment to increasing our shareholders value and our dear customers.”
He added: “Our processes and management have been strengthened in order to stabilise the business and place it on a sustainable path aimed at creating value for its stakeholders,” Ighodalo said.
The chairman, who expressed appreciation to the staff, noted that the company would continue to place high priority on their training and development, seek and retain the best the “best talents in our continued pursuit of operational and services excellence.”
He stated that the customers are the key partners in the business, who continue to remain the cornerstone of the company.
“Notwithstanding the challenges faced during the year, we continued to receive excellent patronage from our customers. We are immensely grateful for this unwavering support,” the chairman said.
He reiterated the commitments of the group to further invest in the growth of its businesses within and outside Nigeria noting that the Dangote Group believes in job and wealth creation.
Mobility Company Uber Increases Fares in Lagos Due to Unfriendly Economic Conditions
Mobility company Uber via an email recently disclosed to its drivers that it was increasing its fares in Lagos.
Mobility company Uber via an email recently disclosed to its drivers that it was increasing its fares in Lagos.
The company disclosed that this increase in price was necessitated by unfriendly economic conditions, coupled with the increase in the price of fuel which will take effect on October 3, 2022.
According to the email sent, the base fare will increase from ₦340 ($0.78) to ₦450 ($1.04), while the minimum and per minute fare will go from ₦600 ($1.38) to ₦650 ($1.50) and ₦14 ($0.03) to ₦16 ($0.03), respectively.
This is not the first time the mobility company is increasing its fare, it should be recalled that on May 10, 2021 Investors King reported that Uber was increasing its fares by 13 percent in Lagos. According to the company, the increase was to ensure a reliable earning opportunity for driver-partners.
However, the company’s recent decision to once again increase its fares in Lagos may come as a surprise to users but it is in line with its activities in other countries where it has operations.
Lagos is not the only city that has witnessed an increase in fares. In August 2022, Bloomberg reported Uber was increasing its fares in London by 5%, with plans to do the same in other cities across the United Kingdom.
Uber has not been the only ride-hailing player to increase its prices. A report by Rakuten Intelligence revealed that the cost of a ride on ride-hailing apps had increased 98% between 2018 and 2021, driven partly by a shortage of drivers.
But in recent times, the company has begun pushing for profitability. In an email to employees in May 2022, CEO Dara Khosrowshahi said, “we have to make sure our unit economics work before we go big.” The result of that has been an increase in fares.
However, in 2017 Uber reduced its fare shortly after Taxify, a growing competitor did the same. The company sent a message to its drivers via a mail which reads, “As of today, Uber has reduced fares by 40% in Lagos. This means you can travel for business or explore your city for less than ever before”.
Tesla Records High Car Deliveries This Year But Failed to Meet Wallstreet Forecast
Tesla reportedly delivered 343,830 electric vehicles in the third quarter (Q3), a new record for the company this year
Automotive company Tesla reportedly delivered 343,830 electric vehicles in the third quarter (Q3), a new record for the company this year. However, the company still underperformed as it failed to meet Wallstreet projections.
Following the shutdown of its company in China, due to the country’s extended COVID-19 lockdown and challenges around opening factories, Tesla’s delivery fell to nearly 18% in the Second (Q2) of 2022 which took a toll on the company.
Despite the rebound and record number in Q3, there was also a larger-than-usual gap between production and delivery numbers. The company produced 365,923 vehicles in the third quarter.
The company disclosed that part of why it failed to hit certain delivery figures was due to logistical challenges which overshadowed its record deliveries.
Tesla said “it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost,” but some analysts were also concerned about demand for high-ticket items due to the weakening global economy.
In other words, the car manufacturing company is going to try and evolve beyond its legendary end-of-the-quarter pushes. CEO Elon Musk tweeted that it is trying for a steadier approach, “Customer experience suffers when there is an end-of-quarter rush. Steady as she goes is the right move,” he tweeted.
According to a statement from the company, it said “As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.
“In Q3, we began transitioning to a more even regional mix of vehicle builds each week, which led to an increase in cars in transit at the end of the quarter. These cars have been ordered and will be delivered to customers upon arrival at their destination.”
The economy around the edges is still having a negative impact on Tesla that’s mostly logistical. It should be recalled that on April 21, 2022, Investors King reported that Tesla realised $18.7 billion in revenue in the first quarter (Q1) of 2022 despite supply disruptions and delays experienced due to Chinese Covid-19 lockdown.
Dangote Industries Wins ECOWAS’ Brand of The Decade Award
Dangote Industries Limited has won ECOWAS Outstanding Indigenous Conglomerate of the Decade
Africa’s largest business conglomerate, Dangote Industries Limited has won ECOWAS Outstanding Indigenous Conglomerate of the Decade.
It was a show of accolades as the Dangote brand was named the number one brand by all standards with its Sugar and Cement production which has contributed tremendously to the infrastructure development not only in Nigeria but Africa in the last 10 years.
Speaking at the event which was held in Lagos, John Ajayi, Publisher/CEO of Marketing Edge Publications noted that the award to Dangote brands are in recognition of its leadership and domination in the various market segments and categories which span several countries in Africa.
Mr Anthony Chiejina, Group chief, branding & communications officer, Dangote Industries noted that Dangote Industries remains at the forefront of African enterprise and that the brand, since its inception, has touched the lives of many by providing their basic needs.
Some of the awards won during the Marketing Edge Magazine’s 2022 summit included Outstanding Indigenous Conglomerate won by Dangote Industries Limited, Cement Brand of the Decade as well as Sugar Brand of the Decade
Investors King had earlier reported that Dangote Industries Ltd. (DIL) won the most admired brand in Africa for the fifth consecutive year in a row.
During the award presentation, Group Chief Commercial Officer of Dangote Industrial Limited, Mr Rabiu Umar said “The company had risen a notch higher as a global brand with the export of Dangote Fertiliser to many countries of the world. People now identify with the brand and in all the countries where we operate, Dangote Cement has become a reference point.
“We are touching lives by providing their basic needs and empowering Africans more than ever before, creating jobs, reducing capital flight, and helping the government to conserve foreign exchange drain by supporting different industrial and infrastructural projects of African governments.
We fervently believe that only Africans can develop Africa, and this gives us a stronger sense of relevance in all the countries where we have our operations”. He concluded.
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