During the half year ending June 30, 2022, Nigeria’s two major cement companies, Dangote and BUA Cement spent a massive N173.537 billion on fuel and power, accounting for 41.33 percent of the cement manufacturers’ total cost of sales of N419.965 billion.
Both corporations spent 38.34 percent more than the N125.44 billion recorded during the corresponding time in 2021.
According to the unaudited half-year statistics of both companies, profit after tax amounted to N233.668 billion in 2021, down from N235.026 billion in 2021, showing a 0.7% reduction.
This was due to increased sales costs, which ‘ate up’ a large portion of earnings due to rising inflation and a high exchange rate. The enterprises’ cost of sales for the first half of 2022 was N419.965 billion, up from N342.275 billion in 2021, representing a 22.7 percent increase.
In the report, Dangote Cement consumed fuel and power valued at N129 billion during the half year 2022 as against N98.978 billion in 2021, representing a growth of 31.3 per cent.
On the other hand, BUA Cement spent N43.580 billion on energy in the first six months of 2022, representing an increase of 64.66 per cent over N26.446 billion reported in the corresponding period.
Profit after tax was N61.364 billion in 2022 as against N43.396 billion in 2021, accounting for an increase of 41.4 percent while the cost of sales stood at N97.504 billion in the half year of 2022 from N66.158 billion in 2021, representing a growth of 47.38 per cent.
Speaking on the result, the CEO of Dangote Cement, Michel Puchercos, explained that despite the elevated inflation due to a very volatile global environment, the first half of 2022 has been positive.
Puchercos explained that a significant increase in energy and AGO costs negatively impact the production and supply of cement products.