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Investors Stake N598.12bn on Dangote Cement in 9 Months, Stock Hits 52-week High

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Dangote Cement - Investors King

Domestic and foreign investors have invested N598.12 billion in the stock of Dangote Cement Plc on the Nigerian Exchange Limited (NGX) in the first 9 months of 2021.

With impressive earnings in half year ended June 30, 2021, the cement manufacturing company stock price on the NGX hits 52-week high yesterday.

This means the stock of the cement manufacturing company has appreciated by 14.3 per cent to N280 (N4.77trillion) as at September 30, 2021 from N244.90 (N4.17trillion) it opened for trading this year.

Appreciation in Dangote Cement share price impacted positively on NGX Industrial index that gained nearly two per cent 2,089.38 basis points as at September 30, 2021 from 2,052.33 basis points it closed in 2020.

With a dividend of N272.65billion in 2020 financial year, Dangote Cement made the highest returns to investors on the NGX.

The company’s unaudited result and accounts for half year ended June 30, 2021 (H1) showed impressive performance in revenue and modest performance in net finance that impacted positively on profit before tax and profit after tax.

The company’s double-digit increase in revenue was largely driven by higher sales volumes, as well as improved cost management during the period, which drove margin expansion.

The cement manufacturing recorded increase in volume of both cement and clinker volumes to 14,550,000 tonnes in H1 2021 from 11,674,000 tonnes to drive revenue from sales of cement & clinker to N690.55billion in H1 2021 from N476.84billion reported in H1 2020.

During the H1 2021 period, Dangote Cement revenue increased by 44.8 per cent to N690.5billionn from N476.85billion recorded in H1 2020, supported by a 26.1per cent surge in volumes sold to 15,277 metric tonnes in H1 2021 from 12,114 metric tonnes and 14.5 per cent increase in revenue-per-tonne to N45,133.66 which was attributed to lower rebates and price increment during the period.

The impressive growth was reflected in both the Nigerian and Pan-African market segments, as sales volumes were up by 33.2per cent and 15.5 per cent, respectively.

With decline in finances, Profit Before Tax rose by 72.7 per cent to N281.3billion in H1 2021 from N162.85 billion in H1 2020.

Notably, a 141.2 per cent increase in tax income to N89.6biillion in H1 2021 from N36.71billion in H1 2020, dragged profit to N181.6billion in H1 2021 from N126.14billion reported in H1 2020.

Earnings per share (EPS) increased to N11.21 kobo in H1 2021 from N7.45 kobo in H1 2020.

According to analysts at United Capital, “Going into H2 2021, we remain optimistic on Dangote Cement and expect the company to sustain double-digit growth, albeit at a slower pace relative to H2 2020, given the relatively high base from the period.

“On a macro-scale, we are optimistic about economic recovery in Nigeria and Sub-Saharan Africa, as well as sustained cement demand, which has driven capacity expansion plans. Additionally, price increases in the first half of the year will help sustain top line growth and margins, as costs remain pressured.

“Furthermore, we see further room for price increments during H2-2021 as demand remains strong and inflationary pressures persist. However, risks to a more robust H2 2021 performance include disruptive rains in Q3-2021, an intensified third wave of Covid-19 in SSA and attendant lockdowns, persistent disruptions in global supply chains, higher freight prices, further naira devaluation and elevated inflationary pressures.However, we observe that Dangote cement has done particularly well in the face of rising expenses and this bolsters our optimistic outlook.Specifically, we project FY 2021 Revenue growth of 28.7per cent to N1,330.9billion (prev. N1,168.3billion) and expect EPS to grow by 31.9 per cent to N21.4/s in FY 2021.

They, however, recommended that investors should HOLD the stocks of Dangote Cement with upgraded target price.

“We updated our forecasts for Dangote cement in light of the H1 2021 numbers which exceeded our expectations, as well as our optimistic prognosis for cement demand in H2-2021.Accordingly, we raise our target price on Dangote cement to N270.28 (previous: N253.70). This revision reflects our expectation of upbeat sales volumes, further price increases and sustained cost management, as well as favourable adjustments in computing the cost of equity. Our target price implies a HOLD rating and an upside potential of 11.9 per cent, ”they said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness - Investors King

Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Apple’s Market Value Plummets Amid Regulatory Scrutiny on Both Sides of Atlantic

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inside apple company

Apple Inc. finds itself at the center of regulatory storms on both sides of the Atlantic, leading to a significant dip in its market value.

The tech giant is facing intense scrutiny from regulators with allegations of antitrust violations looming large.

In the United States, the Department of Justice, along with 16 state attorneys general, has filed a lawsuit against Apple, accusing the company of breaching antitrust laws.

This legal action has sent shockwaves through the investment community, resulting in a 4.1% drop in Apple’s shares on Thursday alone.

This decline wiped out approximately $113 billion in market value, increasing its year-to-date losses to 11%.

Once hailed as the world’s most valuable firm, Apple’s shares have underperformed major indices like the Nasdaq 100 and the S&P 500 in 2024.

Across the pond, European regulators are also eyeing Apple’s practices closely. The company faces potential probes into its compliance with the region’s Digital Markets Act.

This legislation empowers authorities to levy hefty fines, up to 10% of a company’s total annual worldwide revenue, for violations.

With investigations looming, Apple’s future in the European market appears uncertain.

Despite Apple’s staunch defense against the allegations, investors remain jittery about the implications of regulatory actions.

The company’s legal battles have underscored broader concerns about its dominance in the digital marketplace and the impact on competition.

As the regulatory saga unfolds, Apple must navigate turbulent waters, balancing legal challenges with its commitment to innovation and market leadership.

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NNPC Gears Up for Public Listing, Embraces Full Commercialization

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NNPC - Investors King

The Nigerian National Petroleum Company Limited (NNPC) is poised for a transformation as it sets its sights on a public listing.

The announcement came from Mele Kyari, the Group Chief Executive Officer of NNPC, during his address at the ongoing 2024 CERAWEEK in Houston, United States.

Kyari affirmed NNPC’s commitment to aligning with the provisions of the Petroleum Industry Act (PIA), which mandates the company to become a quoted entity.

This move, he emphasized, is a pivotal step towards realizing the objectives outlined in the PIA, ensuring transparency, efficiency, and profitability in the Nigerian oil and gas sector.

In his remarks, Kyari highlighted the transformative journey NNPC has undergone, transitioning from a government-owned corporation to a commercially-oriented and profit-driven entity.

He emphasized that the company has evolved into a full limited liability company, capable of generating dividends for its shareholders while adhering to tax and royalty obligations.

Furthermore, Kyari underscored the strategic importance of NNPC to Nigeria’s resource management and economic development, emphasizing its pivotal role in the country’s energy sector.

The planned public listing of NNPC shares is anticipated to democratize ownership and enhance transparency within the company’s operations.

Kyari noted that the process is in line with the legal framework established by the PIA and is expected to commence within the stipulated timeline.

NNPC’s bold move towards commercialization signifies a paradigm shift in Nigeria’s oil and gas industry, promising increased accountability, efficiency, and value creation for stakeholders.

As the company embraces this new era, it aims to consolidate its position as a key player in the global energy landscape while driving sustainable growth and development domestically.

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