In a resounding show of resilience and operational discipline, Dangote Cement Plc (DANGCEM) has delivered an impressive start to 2025, setting the stage for robust earnings growth through the year. The company’s Q1-25 results reveal a 21.7% year-on-year (y/y) surge in revenue, largely anchored by a substantial 30.5% year-on-year increase in average cement prices, a testament to strong pricing power in a challenging macroeconomic environment.
Even more significant is the operational leverage at play. Despite modest cost pressures, with total costs rising just 2.3%year-on-year , DANGCEM expanded its EBITDA margin by a stellar 854 basis points, reflecting effective cost control and improved efficiency across its operations. This performance translated into an 83.9% year-on-year jump in earnings per share (EPS)—a clear signal of solid bottom-line momentum.
On the back of this performance, analysts have revised their outlook sharply upwards, raising the year-end target price by 18.1% to NGN542.98 per share (from a previous NGN459.65) and upgrading the stock’s rating to “Hold”, with a compelling 25.7% upside from the current market price of NGN432.00.
The forward view is optimistic. For 2025E, revenue is now expected to climb 21.4% year-on-year , led by a 27.3%year-on-year revenue boost in Nigeria—up from previous estimates of 12.3%—thanks to a higher cement price forecast of NGN155,000 per tonne, though volume growth expectations have been slightly tempered. In contrast, the Pan-Africa segment faces headwinds, with revenue growth now expected to slow to 5.2% year-on-year (from 30.8% previously), due to weaker sales volumes in markets like Senegal, Ethiopia, and South Africa, and less FX-related pricing tailwinds.
Nonetheless, efficiency gains are expected to cushion these regional pressures. Cost growth projections have been moderated significantly: cost of sales now forecast to grow just 10.2% year-on-year and OPEX by 12.5% year-on-year , compared to earlier projections of over 20%. These improvements are underpinned by ongoing cost-saving initiatives, currency stability, and declining energy prices.
As a result, EBITDA margin is expected to expand by 502bps year-on-year to 43.6%—a marked upgrade from the earlier 38.5% forecast. FX losses, which had previously weighed on earnings, are also expected to decline by 68.2% year-on-year , further bolstering the company’s profitability outlook.
DANGCEM’s Nigerian operations remain the bedrock of its performance. In Q1-25 alone, the EBITDA margin for Nigeria soared to 56.7%, up 707bps year-on-year , reflecting the full benefit of lower raw material, haulage, and energy costs. Although Pan-Africa margins contracted by 248bps to 23.7%, the aggregate result was a strong 46.4% EBITDA margin for the quarter.
Reflecting the improved fundamentals, EPS for 2025E is now forecast to grow 80.3% year-on-year to NGN53.61, while shareholders can look forward to a healthy dividend per share (DPS) of NGN50.00, implying a dividend yield of 11.6% at current prices—further reinforcing the stock’s income appeal.
From a valuation standpoint, the revised target price of NGN542.98/s is based on a blended methodology: 70% weighted Discounted Cash Flow (DCF)—with FCFF and FCFE yielding NGN464.84/s and NGN447.10/s respectively, assuming a 22.6% WACC and 4.0% terminal growth—and 30% sector-relative valuation using Bloomberg’s Middle East & African peer averages (14.5x P/E and 7.3x EV/EBITDA), which point to even higher fair values of NGN777.54/s and NGN714.43/s, respectively.
With a compelling valuation, expanding margins, and improving cost dynamics, Dangote Cement enters the rest of 2025 on solid footing—poised to deliver both growth and value for shareholders in a recalibrated operating landscape.
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