Dangote Cement’s total debt hits N393bn

Dangote Cement Plc, Africa’s biggest cement producer, has increased its total debt to N393 billion following the recent completion of its first bond issuance.

The company successfully completed the issuance of N100 billion Series 1 five-year bond in April which was 1.5 times oversubscribed, the cement maker said in a presentation during its Q1 2020 conference call.

Its Head of Investor Relations, Temi Aduroja, said, “Including the N100 billion bond issuance, DCP has a total debt of N393 billion. The short portion of DCP’s debt (N230 billion) is 59 percent of total debt.

“In addition to a strong operating cash flow, DCP also has over N300 billion head room with existing commercial paper and bond programmes to fund growth and eventually refinance short term debt.”

According to her, Dangote Cement’s debt to equity ratio has risen by 42 percent from 31 percent in the first quarter of 2020, strengthening its capital structure.

“DCP has limited foreign currency debt exposure, with just 24 per cent of total debt exposed to the dollar,” Aduroja said.

She said the company’s share buyback had been approved by the Securities and Exchange Commission, adding, “We will review the opportunity to deploy this programme in due time. “

“Attractive short-term rates lead to full drawdown of the N150 billion commercial paper in the second quarter. This year we will begin exporting clinker via ports from Nigeria to West and Central Africa,” Aduroja said.

According to her, Dangote Cement is continuously assessing the impact of the COVID-19 pandemic on its business.

She said, “We have proactively deployed recommended measures to protect the health and well-being of our employees, customers, suppliers and communities. We are monitoring key dimensions of our operations in order to mitigate negative financial impact.

“We are closely controlling our capital expenses, working capital needs and fixed costs to maintain strong and resilient cash positions.”

Aduroja said given full lockdown in South Africa, Ghana, Congo and some parts of Nigeria from the end of March, April volumes were trending lower than the volumes and values realised during the same period last year.

She noted that Ghana lifted its lockdown partially on April 19, while Nigeria lifted its lockdown partially on May 4.

“All other businesses remain fully operational and continue to supply customers while supporting measures required to protect all stakeholders,” she added.