Dangote Cement Plc, the most capitalized stock on the Nigerian Exchange (NGX), experienced a sharp ten per cent decline in its stock price on Thursday, resulting in a significant N907bn loss in market value.
The drop brought the company’s market capitalization down from N9.065trn to N8.158trn, contributing to a broader sell-off in the domestic bourse.
The sharp decline in Dangote Cement’s stock price was the primary factor behind the NGX posting a 1.19 per cent decline, as the All-Share Index fell to 97,064.42 points.
This marked the second consecutive day of negative performance on the stock exchange following Nigeria’s Independence Day holiday.
Analysis by NewsNGR revealed that Dangote Cement’s stock closed at N478.80 per share, down from its opening price of N532.00 per share at the start of Thursday’s trading session.
This ten per cent drop, which is the maximum daily decline allowed on the NGX, underscores low investor confidence in the company’s shares.
Despite the day’s downturn, Dangote Cement has still shown a strong overall performance in 2024, having started the year with a share price of N319.90.
Even with the recent dip, the stock has gained 49.7 per cent year-to-date, reflecting positive growth in previous months. However, the latest market activity signals potential challenges ahead as investors react to market volatility and other economic factors affecting the company’s stock.
The recent sell-off highlights a cautious sentiment among investors, as the broader market also continues to face uncertainties.
The NGX will be closely watched in the coming days to see if the trend persists or if Dangote Cement’s stock can recover from its recent losses.
The leading cement manufacturer reported strong financial performance for the first half of 2024, posting a revenue of N1.76tn.
This marks an impressive 85 per cent year-on-year (YoY) growth from the N950.8bn recorded in the same period last year.
Despite this robust revenue growth, the company faced a significant increase in production costs.
The cost of sales surged by 118 per cent YoY to N833.3bn, up from N383.1bn in H1 2023. The spike in costs reflects the broader impact of inflationary pressures and higher input prices, which have affected many industries across the country.
The cement manufacturer also recorded a net profit of N189.9bn during the period, representing a modest 6 per cent YoY increase compared to the N178.6bn posted in H1 2023.
The slower profit growth, relative to revenue, was largely attributed to rising operating costs and tax obligations.
Tax expenses for the first half of 2024 rose sharply to N103bn, up from N61.2bn in the corresponding period last year. The increase in tax liabilities further weighed on the company’s profitability.
Additionally, inflationary pressures were evident in the company’s operating expenses, which grew by 103 per cent YoY to N403.2bn, up from N198.7bn in H1 2023.
The surge in operating costs reflects the broader challenges posed by inflation, as businesses across the country continue to grapple with rising prices for goods and services.
Despite the rise in costs and expenses, the company’s overall financial performance during the period was viewed as strong, with the significant revenue increase underscoring its market resilience amid challenging economic conditions.