Dangote Cements 64 per cent owned South African subsidiary, Sephaku cement is to start production at its new cement plant in early 2014, as first half profits rose to R40 million ($4 million).
The group achieved revenue of R301.6 million from no revenue for the comparative period in 2012.
Lelau Mohuba, chief executive officer said, “I am pleased with the results indicating our initial reporting period of positive earnings and revenue as a result of the strategic acquisition of Metier.”
“The significant construction progress at our associate company Sephaku Cement’s plants has firmly positioned the company as a new entrant into the cement manufacturing industry in South Africa since 1934.
“I would like to commend our highly experienced operational team for attaining to date the key milestones towards starting cement production in January 2014.”
The group attained its initial revenue of R301.6 million attributable to the consolidation of the financial results of the recently acquired Metier Mixed Concrete (Pty) Ltd (“Metier” or “the subsidiary”) for the full six-month period.
Commensurately, the group’s operating profit increased by R43.8 million over the last nine months to R33.8 million with the resultant EBITDA of R40.3 million compared to the R9.8 million loss for the six months ended 31 December 2012.
During the reporting period, the headline earnings per share increased from a loss of 5.69 cents for the six months ended 31 December 2012 to earnings of 2.78 cents for the six months ended 30 September 2013.
The wholly owned subsidiary, Metier, achieved an EBITDA of R55.1 million and earnings before interest and taxation of R43.7 million resulting in an overall profit for the group.
The subsidiary accrued finance charges of R5 million on the acquisition debt and R4.2 million on the refinancing and expansion debt resulting in a profit after taxation of R24.5 million.
Speaking earller in November when parent company Dangote Cement last reported a 28.7 per cent growth in revenue for the nine months ended September 30, 2013, Group Managing Director, Devakumar Edwin, said,
“Our South African venture, Sephaku Cement, is well on track to open in the early part of 2014. These will be our first production ventures outside Nigeria as we aim to become Africa’s leading supplier of cement.”
Dangote Cement is Nigeria’s leading cement producer with three plants in Nigeria and plans to expand in 13 other African countries. The group plans to build more integrated, grinding and import facilities across Africa, bringing its total capacity to over 50metric tonnes per annum (mta) by the end of 2016.