NewStats: 3,264,152 , 8,182,793 topics. Date: Monday, 09 June 2025 at 09:46 PM 5b156h

Patience is key...

Streetinvestor2:
What date is wapco EGM again
Wale make q3 result no tomorrow abeg

Hey, thanks for the analysis. I appreciate the work, but I'm afraid your analysis doesn't your thesis on DangCem.

Step back and look at what your numbers say about the fundamentals of the business. Revenue is growing, but mostly due to price inflation (unit volumes only grew a measly 2% in 2023). Yet with each bag of cement it sells, DangCem is making less money than it used to (gross margins have collapsed). At the same time, debt is rising fast, meaning that shareholders have a shrinking claim on its shrinking profits. Does this look like the type of company that'll grow the dividend? Would you really pay a higher multiple for an asset that is becoming less profitable and more risky due to growing debt?

And we haven't even started talking about the coming competition from the Chinese (see: WAPCO)...

(By the way, there's something off mathematically about equity growing faster than debt when debt/equity is growing.)

ositadima1:


Take a look at the snapshot I quickly put together. There may be errors as I was rushing to finish before watching the new episode of Silo. You’ll notice that while debt is increasing, equity is growing at a faster rate. The debt-to-equity ratio remains well below 100%, and for 2024, the 70% figure represents the first six months. I’m positive that it will be lower by year-end. The blue cell in the corner is where I doubled the equity value to annualize the six-month data. Everything else should be self-explanatory.

HesInMe:
Revenue is growing, but mostly due to price inflation (unit volumes only grew a measly 2% in 2023). Yet with each bag of cement it sells, DangCem is making less money than it used to (gross margins have collapsed).

You are correct that revenue growth may be affected by inflation, but it is growing faster than the cost of doing business, including taxes and interest. This has resulted in an increase in net profit, which rose from 382 billion in 2022 to 455 billion in 2023. Percentages can sometimes be misleading—for example, 10% of 1 million is greater than 30% of 200 thousand. I don’t believe the company is making less money unless you adjust for inflation. But then every naira is worth less than it was a year ago.

HesInMe:
At the same time, debt is rising fast, meaning that shareholders have a shrinking claim on its shrinking profits.

As I mentioned earlier, net profit in absolute is growing despite increasing debts. As noted in my initial post, leverage remains below 100%, meaning equity is still higher than debt, so there is no cause for concern. Since debt levels can fluctuate—rising in some years and falling in others—the most important factor here is that gearing remains under control (under 100%).

HesInMe:

And we haven't even started talking about the coming competition from the Chinese (see: WAPCO)...

This is a big "if." Unless the Chinese bring advanced technology to cement manufacturing, I don’t see them expanding their market share to the extent of badly hurting dangcem operations simply through competition. , Dangote operates in more African countries than WAPCO does and has also mentioned plans to export cement to America alongside oil cargoes.

HesInMe:

(By the way, there's something off mathematically about equity growing faster than debt when debt/equity is growing.)

Dangote Cement PLC executed two tranches of its share buy-back program.

Tranche I: From December 30th to 31st, 2020, the company bought back 40,200,000 units of its shares at a total cost of N9.8 billion, which included the par value of the shares and the additional paid.

Tranche II: From January 19th to 20th, 2022, Dangote Cement bought back 126,748,153 units of its shares. This represented 0.74% of the company's issued and fully paid ordinary shares. The total cost was N35.3 billion.

A third tranche was executed in July 2023, under a second share buy-back program:

Tranche I (Program 2): From July 17th to 18th, 2023, Dangote Cement bought back 121,404,714 units of its shares, representing 0.71% of the company's outstanding shares. The total cost was N41.4 billion.

Though company bought back shares in several tranches, the total number of outstanding shares has not decreased. The company holds the repurchased shares as treasury shares, which are shares that a company has repurchased but not retired.

MARKET BULLETIN 16 December 2024 NGXREG/IRD/MB93/24/12/16 Flour Mills of Nigeria Plc: Suspension in Trading of the Shares of Flour Mills of Nigeria Plc Trading License Holders and the investing public are hereby notified that trading in the shares of Flour Mills of Nigeria Plc (the Company) was suspended today, Monday, 16 December 2024. The suspension is necessary to prevent trading in the shares of the Company in preparation for the delisting of the securities of the Company in line with the approval obtained from Nigerian Exchange Limited (NGX). This is for your information and records update, please.


Godstime Iwenekhai
Head,
Issuer Regulation Department

You're about to learn how inflation and debt destroy value in the absence of organic growth. Roll forward a year or two. DangCem cannot raise prices forever at the current clip: We need housing, but demand for cement is not inelastic. So revenue growth will sharply abate. Meanwhile, its installed high cost of goods (power supply?) will remain stubbornly high, and the interest rate on its ballooning debt is (mostly) fixed.

You can model the rest: Gross profit will fall. Net profit will too, maybe in absolute . You can kiss that dividend growth you're hoping for goodbye.

Then the Chinese, who have a massive domestic overproduction of cement and are desperate to capture market share in high growth markets like Africa, will show you that they're willing to take on temporary losses to achieve strategic objectives.

Let me not be too pessimistic. Exports are one way to continue revenue growth. And the low valuation does help.

ositadima1:


You are correct that revenue growth may be affected by inflation, but it is growing faster than the cost of doing business, including taxes and interest.... net profit in absolute is growing despite increasing debts...

This is a big "if." Unless the Chinese bring advanced technology to cement manufacturing, I don’t see them expanding their market share to the extent of badly hurting dangcem operations simply through competition. , Dangote operates in more African countries than WAPCO does and has also mentioned plans to export cement to America alongside oil cargoes.

HesInMe:
You're about to learn how inflation and debt destroy value in the absence of organic growth. Roll forward a year or two. DangCem cannot raise prices forever at the current clip: We need housing, but demand for cement is not inelastic. So revenue growth will sharply abate. Meanwhile, its installed high cost of goods (electricity?) will remain stubbornly high, and the interest rate on its ballooning debt is (mostly) fixed.

You can model the rest: Gross profit will fall. Net profit will too, maybe in absolute . You can kiss that dividend growth you're hoping for goodbye.

Then the Chinese, who have a massive domestic overproduction of cement and are desperate to capture market share in high growth markets like Africa, will show you that they're willing to take on temporary losses to achieve strategic objectives.

Let me not be too pessimistic. Exports are one way to continue revenue growth. And the low valuation does help.

You talk about inflation as if it only affects Dangote. Isn’t inflation impacting other businesses equally, or is this just to strengthen your argument? Unless the government lifts the ban on cement importation, the Chinese will have to perform their "magic" within Nigeria. I’m not sure what you mean by electricity; as far as I know, Dangote typically generates its own electricity in-house.

cocolacec:
MARKET BULLETIN 16 December 2024 NGXREG/IRD/MB93/24/12/16 Flour Mills of Nigeria Plc: Suspension in Trading of the Shares of Flour Mills of Nigeria Plc Trading License Holders and the investing public are hereby notified that trading in the shares of Flour Mills of Nigeria Plc (the Company) was suspended today, Monday, 16 December 2024. The suspension is necessary to prevent trading in the shares of the Company in preparation for the delisting of the securities of the Company in line with the approval obtained from Nigerian Exchange Limited (NGX). This is for your information and records update, please.


Godstime Iwenekhai
Head,
Issuer Regulation Department

Interesting days ahead

HesInMe:
You're about to learn how inflation and debt destroy value in the absence of organic growth. Roll forward a year or two. DangCem cannot raise prices forever at the current clip: We need housing, but demand for cement is not inelastic. So revenue growth will sharply abate. Meanwhile, its installed high cost of goods (power supply?) will remain stubbornly high, and the interest rate on its ballooning debt is (mostly) fixed.

You can model the rest: Gross profit will fall. Net profit will too, maybe in absolute . You can kiss that dividend growth you're hoping for goodbye.

Then the Chinese, who have a massive domestic overproduction of cement and are desperate to capture market share in high growth markets like Africa, will show you that they're willing to take on temporary losses to achieve strategic objectives.

Let me not be too pessimistic. Exports are one way to continue revenue growth. And the low valuation does help.

No vex say I put mouth. The two things you mentioned in your first sentence. It is only one I see as a problem going forward which is debt but with present cost of cement it may be no problem seriously The inflation rate will soon bend south. Then on debt. All this borrowing from government is going into infrastructure. And thr is no infrastructure without cement. The new road initiative alone is a big one for cement. And alhaji will continue to take the lion share thr.
I will bet that alhaji cement will go north but can't say how far.You have forgotten that otedola is now involved. Wait let him finish with fbn matter and he starts magic with alhaji cement. Dangote cement will still touch #700 plus next yr. Alhaji dividend on cement will continue to grow no matter how small.

Ding!!!

Weekly Market Wrap: Nigerian stock market gains 1.19% as All-Share Index sures 99,000-barrier, CONOIL and ARADEL lead the rally 

https://nairametrics.com/2024/12/14/weekly-market-wrap-nigerian-stock-market-gains-1-19-as-all-share-index-sures-99000-barrier-conoil-and-aradel-lead-the-rally/

Sorry, I edited my comment to read "power," not "electricity" just as you were responding.

And I'm not arguing about inflation/debt/slow growth in the abstract; I just mapped out how I think it threatens DangCem's dividend, which was the core of your investment thesis.

ositadima1:


You talk about inflation as if it only affects Dangote. Isn’t inflation impacting other businesses equally, or is this just to strengthen your argument? Unless the government lifts the ban on cement importation, the Chinese will have to perform their "magic" within Nigeria. I’m not sure what you mean by electricity; as far as I know, Dangote typically generates its own electricity in-house.

Dangote refinery extends export to three African countries

https://punchng.com/dangote-refinery-extends-export-to-three-african-countries/

Raider76:
Dangote refinery extends export to three African countries

https://punchng.com/dangote-refinery-extends-export-to-three-african-countries/

Good

Streetinvestor2:
No vex say I put mouth. The two things you mentioned in your first sentence. It is only one I see as a problem going forward but with present cost of cement it may be no problem. The inflation rate will soon bend south. Then on debt. All this borrowing from government is going into infrastructure. And thr is no infrastructure without cement. The new road initiative alone is a big one for cement. And alhaji will continue to take the lion share thr.
I will bet that alhaji cement will go north but can't say how far.You have forgotten that otedola is now involved. What let him finish with fbn matter and he starts magic with alhaji cement. Dangote cement will still touch #700 plus next yr

Inflation is affecting WAPCO, BUA Cement, and others—so why is it only Dangote that’s expected to suffer? The Chinese cannot import unless they lobby the government successfully, so they’ll have to work with what WAPCO has here. Unless they bring technology that significantly improves efficiency, I don’t see them outperforming Dangote (in the short term). Mark my words, Dangote Cement will gain more than 100% from its current price (highest 2026). Laugh me well well if by middle of 2026 he never double at least one time.

say my own is to make that 100%, so if dangote come drop after, he no concern me.

Raider76:
Dangote refinery extends export to three African countries

https://punchng.com/dangote-refinery-extends-export-to-three-african-countries/

I believe he is selling in dollars which is definitely a plus to naija dollar inflow abi he is selling in naira

HesInMe:
Sorry, I edited my comment to read "power," not "electricity" just as you were responding.

And I'm not arguing about inflation/debt/slow growth in the abstract; I just mapped out how I think it threatens DangCem's dividend, which was the core of your investment thesis.

I see what you did there, lol.

Here’s a quick update on current market movers! 📊🔥

Feel free to jump in. Na free forum. So why is the current stock price so low?

Streetinvestor2:
No vex say I put mouth... [b]All this borrowing from government is going into infrastructure. And thr is no infrastructure without cement. [/b]The new road initiative alone is a big one for cement. And alhaji will continue to take the lion share thr....

I'm paying attention, sir.

ositadima1:


I see what you did there, lol.

ARADEL is vexing this morning.

Damnnn

Beloved ARADEL.

We need a 100k order to cement this FB

megawealth01:
Weekly Market Wrap: Nigerian stock market gains 1.19% as All-Share Index sures 99,000-barrier, CONOIL and ARADEL lead the rally 

https://nairametrics.com/2024/12/14/weekly-market-wrap-nigerian-stock-market-gains-1-19-as-all-share-index-sures-99000-barrier-conoil-and-aradel-lead-the-rally/

HesInMe:
Feel free to jump in. Na free forum. So why is the current stock price so low?

is it really low.How much was it before otedola moved it to that high you saw.I bought at #1.45 and gladly sold at #290.what is the free float of the shares. Thr was a time over 95% was in alhaji hand and even now it is still very low.I am not sure but don't think the free float is still up to 10%. I alhaji selling a stake to major investors not too long from south Africa

KarlTom:
Beloved ARADEL.

We need a 100k order to cement this FB

100k order on ARADEL done

Streetinvestor2:
is it really low.How much was it before otedola moved it to that high you saw.I bought at #1.45 and gladly sold at #290.what is the free float of the shares. Thr was a time over 95% was in alhaji hand and even now it is still very low.I am not sure but don't think the free float is still up to 10%. I alhaji selling a stake to major investors not too long from south Africa

The most recent share ownership structure of Dangote Cement Pie as of February 26, 2024 is:

Dangote Industries Ltd: 85.8%
Stanbic IBTC Nominees Ltd: 5.61%

All other shares, excluding treasury shares and shares held by Aliko Dangote (0.16%), are considered free-float shares. Aliko Dangote is the ultimate owner of Dangote Industries Limited.

toyeoye:
Here’s a quick update on current market movers! 📊🔥

Update
WEMABANK is currently top active
ARADEL is top traded by value

KarlTom:
Beloved ARADEL.

We need a 100k order to cement this FB

Something that I'm waiting for at my bargain busstop

KarlTom:
Ding!!!

Our accurate time keeper

SonofElElyonRet:


Our accurate time keeper

The guy no dey fail

ositadima1:


The most recent share ownership structure of Dangote Cement Pie as of February 26, 2024 is:

Dangote Industries Ltd: 85.8%
Stanbic IBTC Nominees Ltd: 5.61%

All other shares, excluding treasury shares and shares held by Aliko Dangote (0.16%), are considered free-float shares. Aliko Dangote is the ultimate owner of Dangote Industries Limited.

You see why I said alhaji should first list the dangota industries Ltd before any refinery. This is whr the money dey...lol

toyeoye:


Update
WEMABANK is currently top active
ARADEL is top traded by value

WOW

Wema😳

What OANDO is cooking may be very loud after all.
We shall see.