Dangote Cement grows equity, delivers robust profit but faces high impairment losses, litigations

Dangote Cement Plc delivered a landmark financial performance in 2025, with profit after tax soaring to N1.015 trillion for the first time, more than double the N503.25 billion recorded in 2024, despite a year marked by persistent global economic headwinds.

The country’s largest cement producer also posted robust revenue growth, with turnover rising 20 percent to N4.31 trillion from N3.58 trillion in the previous year. The strong top-line expansion reflects sustained demand across its markets and disciplined execution of its operational strategy.

Operational efficiency remained a defining feature of the company’s performance. Cost of production declined slightly to N1.63 trillion from N1.645 trillion in 2024, underscoring improved cost management even amid inflationary pressures. Administrative expenses rose by 18.2 percent year-on-year to N261.76 billion, but the increase was relatively contained and did not materially erode profitability.

Selling and distribution expenses climbed 10.4 percent to N682.76 billion, yet margins remained resilient, supported by revenue growth and cost controls. Other income contributed N42.25 billion to earnings, lower than the N57.07 billion reported in 2024, but still sufficient to reinforce the company’s profit base.

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Although impairment of financial assets increased to N4.24 billion from N726 million in the prior year, the impact on overall earnings was limited. Operating profit rose significantly to N1.76 trillion, compared with N1.15 trillion in 2024, reflecting the strength of core business operations.

Shareholders’ equity more than doubled to N1.003 trillion, up from N498.19 billion a year earlier, highlighting enhanced value creation and a stronger balance sheet position.

As part of its risk disclosures, the group recognised N9.8 billion as related-party impairment loss on receivables from subsidiaries, compared with no such impairment in 2024. Companies typically recognise impairment losses when there are indications that borrowers may be unable to meet repayment obligations as agreed. Loan impairment is a key accounting concept that reflects a reduction in the carrying value of loans due to weakened creditworthiness.

Dangote Cement, however, expressed confidence in its subsidiaries’ prospects, stating that the group remains committed to providing financial backing where necessary a

The company does not anticipate any material risk arising from the exposures. Interest charged on advances extended to subsidiaries during the year ranged between 11 percent and 12.5 percent, the company disclosed. It proposed a dividend of N45 per share.

“During the year, the Company provided financial support to its subsidiaries of N195.7 billion (2024: N217.4 billion) for capital
development and/or for operational purposes. Assistance rendered was always in the form of funds transferred to them for the
normal running of their operations or on their behalf to vendors/contractors for settlement of commitments,” the cement maker noted.

“This was a robust financial performance, driven by rising infrastructural needs in Africa. Though there were risks, they were insufficient to overwhelm Dangote Cement profits,” said an energing markets expert, Mr Ike Ibeabuchi.

Dangote Cement operationss

Dangote Cement is Africa’s leading cement producer with 55 metric tons per annum (Mta) capacity across Africa. It has a production capacity of 35.25Mta in the Nigerian market. Dangote Cement’s Obajana plant in Kogi State, Nigeria, is the largest in Africa with 16.25Mta of capacity across five lines. Its Ibese plant in Ogun State has four cement lines, with a combined installed capacity of 12Mta. The Gboko plant in Benue State has 4Mta, whereas the Okpella plant in Edo State has 3Mta. The company has helped Nigeria achieve self-sustainability in cement.

In addition, Dangote Cement has operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (2.0Mta clinker grinding and import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta), and Cote d’ Ivoire (3Mta).

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Litigations

Court cases were also a major issue for Dangote Cement as both the group and the company set aside huge sums of money for law suits. “The contingent liabilities in respect of pending litigation and other claims amounted to N457.4 billion and N76.9 billion for the Group and Company respectively (2024: N308.2 billion and N78.5 billion for Group and Company respectively). The Group and Company have assessed these claims and believe that no material loss is expected to arise from them.”

CEO’s perspective

Chief Executive Officer, Dangote Cement, Mr Arvind Pathak, said 2025 was a landmark year for Dangote Cement as the cement maker delivered exceptional financial performance that underscored the strength of its business model and the effectiveness of its strategic initiatives.

“Our export strategy delivered strong results in 2025, with cement and clinker exports increasing 18.6percent as we executed 34 clinker shipments to Ghana and Cameroon. This performance reinforces our vision of positioning Nigeria as a low-cost regional hub and replacing expensive intercontinental imports with competitive African production,” he noted.