Quick Summary:
- Ethiopia led Dangote Cement’s Pan-African operations in 2024, posting ₦91.8 billion in post-tax profit despite being classified as a hyperinflationary economy.
- The application of IAS 29 accounting standards resulted in significant non-cash losses, impacting overall group profitability despite strong revenue growth.
- Pan-African revenue rose 60% year-on-year to ₦1.48 trillion, but the segment still recorded a post-tax loss of ₦24.4 billion due to inflation adjustments and foreign exchange losses.
- Operational gains were recorded in markets like Cameroon, Congo, and Ethiopia, where strategic use of alternative fuels and export demand helped cushion external shocks.
In a year marked by hyperinflation, currency devaluation, and political instability across multiple African countries, Ethiopia emerged as Dangote Cement Plc’s most operationally profitable Pan-African market in 2024 — at least on an inflation-adjusted basis.
Strong Financial Results from Ethiopia
According to Dangote Cement’s 2024 full-year report, Ethiopia recorded:
- Inflation-adjusted revenue: ₦252.56 billion
- Pre-tax profit: ₦122.5 billion
- Post-tax profit: ₦91.8 billion
These figures are particularly notable considering Ethiopia’s classification as a hyperinflationary economy. This status required the company to apply IAS 29, a financial reporting standard that adjusts financial statements for inflation to reflect the real economic value of transactions.
Accounting Loss from Inflation Adjustments
Despite its strong operational performance, the application of IAS 29 led to a non-cash accounting loss of ₦57.5 billion, which impacted Dangote Cement’s consolidated net income at the group level.
In 2024, Ethiopia experienced average inflation of 23%, according to the Ethiopian National Statistics Office. This was triggered by a sharp devaluation of the Birr in July, although the central bank maintained its benchmark interest rate at 15%.
Ethiopia’s economy grew by 6.1% in 2024 and is projected to expand by 6.5% in 2025, supported by steady economic activity and a resilient cement market.
Plant Performance and Operational Challenges
Dangote Cement’s 2.5 million tonnes per annum (Mta) plant in Mugher reached full production capacity in 2024. However, sales volumes fell by 4.7% year-on-year to 2.3 million tonnes. This was mainly due to renewed security challenges and restricted access to imported coal from South Africa.
To maintain efficiency, the company ramped up the use of alternative fuels and optimized its cement-to-clinker ratio.
Mixed Results Across Other African Markets
While Ethiopia led in profitability, other African operations showed mixed results.
Some key highlights from other countries include:
- Ghana: Reported an inflation-adjusted pre-tax loss of ₦10.66 billion.
- Takoradi Cement Production Limited (Ghana): Posted a loss of ₦769 million.
- Pan-African cement volume: Declined slightly by 1.1% to 11.1 million tonnes, down from 11.3 million tonnes in 2023.
This decline was attributed to adverse weather in Tanzania and political instability in Senegal and South Africa.
Despite these challenges, the Pan-African segment achieved strong revenue growth, generating ₦1.48 trillion in 2024 — a 60% increase year-on-year — and contributed ₦195.6 billion in operating profit.
IAS 29 and Its Impact on Profitability
A key drag on profitability was the application of IAS 29 in countries classified as hyperinflationary, such as Ethiopia, Ghana, and Sierra Leone.
Under this standard, financial statements must be restated to reflect current purchasing power, leading to significant non-cash adjustments to revenue, costs, and monetary balances.
When combined with rising input costs and foreign exchange losses, these adjustments significantly eroded the company’s net profits.
As a result:
- Pan-African post-tax loss: ₦24.4 billion in FY 2024
- Q1 2025 post-tax loss: Deepened to ₦110 billion, from ₦36 billion in Q1 2024
Signs of Strength Amid Challenges
Despite the headline losses, Dangote Cement’s Pan-African operations continue to show underlying resilience and growth potential.
Country Highlights:
- Cameroon: Sales volume grew by 2.4% to 1.4Mt, driven by developmental projects.
- Republic of Congo: Sales increased by 8.7% to 878Kt, boosted by exports to DRC and clinker shipments to Cameroon.
- Senegal: Sales declined by 4.7% to 2.3Mt, but infrastructure projects are expected to lift future demand.
- Ethiopia: Continued to optimize clinker ratio and alternative fuels to combat inflation.
- South Africa: Ramping up alternative fuel usage to reduce energy costs and counter power supply issues.
These operational improvements reflect the Group’s strategy to adapt to local challenges while staying focused on long-term growth.
A Vision for Cement Self-Sufficiency in Africa
Dangote Cement reaffirmed its commitment to advancing cement self-sufficiency across the continent.
“Our vision is for Africa to become self-sufficient in cement and clinker production. We achieved this in our home country, Nigeria, which transitioned from being one of the largest importers to becoming self-sufficient and now an exporter of cement and clinker,” the company stated.
