Dangote Cement Peaks At N7Trn Despite High US Dollar Debt

Dangote Cement Plc Completes Issuance Of ₦116b Bonds

Dangote Cement Plc’s market valuation has risen beyond N7 trillion as investors buy additional shares ahead of the results announcement. Bizwatch Nigeria got data from the Nigerian Exchange that indicated the cement giant’s market valuation increased to N7.018 trillion at a unit price of N411.9.

Despite a decrease in share price volatility, Dangote Cement Plc has slid to third place in the market value rankings. The cement firm is set to submit its results report next month as part of the listing requirements. As a dividend aristocrat, some analysts expect the business to maintain its payout ratio despite a significant increase in balance sheet leverage.

Moody’s said in a report that Dangote Cement’s high proportion of short-term debt maturities and dollar debt in the capital structure exposes the company to refinancing and currency convertibility risk. Nigeria Eurobond Slumps after CBN Resumes OMO Auction

The company continues to grow its non-Naira based revenue through exports and repatriations of cash flow from its other African operations. Nevertheless, the rating agency said the company is still reliant on the Central Bank of Nigeria for dollars to convert such cash flows and service its debt requirements.

The company’s liquidity profile is adequate but is exposed to ongoing refinancing risks because of the large portion of short-term debt equal to N573 billion, representing 61% of total Moody’s adjusted debt as of 30 September 2023.

While Dangote Cement Plc has a strong cash generation profile with N38 billion positive free cash flow for the last 12 months to September 2023 and a cash balance of N380 billion, it pays large dividends (N337 billion in Q2 2023) which can temporarily weaken its liquidity.

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