Unfamiliar Territory: Margins and Profits Drop For Dangote Cement (2014 Q1)…See details

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Dangote Cement Plc released its 2014 1 results showing a YoY drop in pre-tax earnings, the first time in years. The company posted a 1.2% drop in pre-tax profits. See other details;

• Revenue also increased 8.5% to N103.5million compared to N95.4billion
• Operating profit dropped 4% of to N53billion compared to N55billion a year earlier
• Pre-tax profits for the period was N53billion compared to N53.6billion a year earlier
• Gross profit margin dropped to 64% compared to 69% a year earlier an indication of a rise in cost of sales and a hold down of prices
• Gross profit margin was actually 56% in the last quarter of 2013 for Dangote Cement and has been below 64% since the second quarter of 2013
• Operating expenses also rose a 24% to N13.4billion much higher than the N12billion average in the four quarters of 2013
• Tax provision was also very high this quarter as the company booked a tax payable of N5.4billion