PCNG Initiative: Dangote announces all cement company’s trucks to run on CNG by 2025

*Aliko Dangote, Chairman of Dangote Cement Plc, also announces an increase of 50 percent on dividend payout to the shareholders to N30.00 for the last financial year 2023

Isola Moses | ConsumerConnect

Aliko Dangote, President/Chief Executive of Dangote Industries Limited (DIL), has disclosed that arrangements are in top gear for thousands of the company’s delivery trucks to henceforth run on Compressed Natural Gas (CNG) in line with the Federal Government’s agenda on adoption of alternative fuel for official vehicles in Nigeria.

The company stated Dangote made the announcement amidst applause by shareholders for the impressive results in the 2023 financial year despite the harsh business operating environment.

Dangote, who is the Chairman of Dangote Cement Plc, also announced an increase of 50 per cent on dividend payout to the shareholders, from N20.00 per share paid in the 2022 financial year to N30.00 for the last financial year 2023.

In regard to the decision to run on Compressed Natural Gas, the company stated Dangote told excited shareholders at the 15th Annual General Meeting (AGM) of Dangote Cement Plc, held in Lagos, recently that the decision was to add to the Federal Government’s quest towards reducing dependence on fossil fuel, thereby enhancing the nation’s energy independence and contributing to a more secure energy future.

“We are now going to start using CNG vehicles, especially with the new policy of the Federal Government, launched by the Renewed Hope Agenda by His Excellency, President Bola Tinubu.

“By the end of next year, all our trucks that are operating in the company will be running on CNG, and that is a whole lot of money that we are going to invest. But we are equal to the task, and we will continue to push and make sure that we continue to make our shareholders happy,” said Dangote.

The Chairman further disclosed to the shareholders the company’s ongoing efforts at ramping up production with the ongoing construction of a new plant of 6 million metric tonnes per annum at Itori, in Ewekoro local government area of Ogun State, noting that despite the hiccups at the Apapa Port in Lagos, the plant would be completed to time.

Dangote said the company’s impressive performance was in fulfillment of the promise he made of an enhanced Return on Investments (RoI) to the shareholders and other stakeholders in Dangote Cement, assuring them that the following year would even be better.

He also expressed satisfaction that Dangote Cement achieved double-digit growth in revenue of ₦2,208.1 billion, while Group EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) reached a record high of ₦886.1 billion, increasing by 25.1%.

Dangote noted: “This outstanding EBITDA performance was underpinned by our robust cost control measures and our diverse pan-Africa operations.

“The latter acted as a cushion, providing resilience to country-specific risks, while the former enhanced our overall profitability. Our pan-Africa operations now contribute 41.2% to the Group’s overall volumes.”

He explained “we made significant strides in our expansion initiatives, with the successful launch of operations at our 0.45Mta grinding plant in Ghana, increasing our total installed capacity to 52.0Mta. Furthermore, our 1.5Mta grinding plant in Côte d’Ivoire is making substantial progress and is nearing completion.

“Lastly, we have commenced construction on our 6Mta Itori plant in Ogun State, a crucial step in supporting our ambitious export goals.”

The 2023 results showed that Africa’s largest cement manufacturer recorded improvement in all performance measurement indicators with group revenue rising by 36.4 percent to ₦2,208.1 billion while Profit After Tax (PAT) was up by 19.2 percent to ₦455.6 billion. Earnings per share went up by 18.8 percent at ₦26.47.

Dangote Cement is garnering more market share across the continent with pan-Africa volumes going up by 12.7 per cent to 11.3Mt.

Arvind Pathak, Group Managing Director (GMD) of Dangote Cement Plc, told reporters at the AGM that 2023 was yet another testament to the effectiveness of the management’s diversification strategy, despite the challenging macroeconomic conditions.

Pathak said; “Our diverse operations acted as a cushion, providing resilience to country-specific risks. Pan-African volumes were up 12.7 per cent and now account for 41.2 per cent of Group volume.

“Consequently, pan-African revenue increased by a record 123.2 per cent to ₦925.9 billion, while EBITDA surged by over four-fold to ₦263.7 billion.”

Alluding to what Dangote said on use of CNG as an alternative fuel for its cement trucks, Pathak noted that in response to the heightened inflationary environment, “we implemented new and innovative business strategies that helped to drive up revenues, contain costs, and protect margins.

“These initiatives included fuel mix optimisation, propelling the use of alternative fuels to replace more expensive fossil fuels. We also began the phased transition from diesel power trucks to full Compressed Natural Gas (CNG) trucks.”

Shareholders one after another were full of praise for the board and management of the Company for the impressive outing in 2023, which accounted for the dividend payout of N30 per share; an increase of 50 percent over the 2022 dividend despite the economic headwind that characterised 2023.

Mrs. Bisi Bakare, Chairperson of the Pragmatic Shareholders Association, lauded the Management of Dangote Cement for what she described as a huge dividend payout even when many other companies could not pay their shareholders a dime because they declared losses.

She stated that the shareholders were happy, and expressed optimism that with the way the management has steered the Company in the face of the current economic downturn and recorded good results, the 2024 dividend will be higher.

In his comment, Dr. Faruk Umar, President, of the Association for the Advancement of Rights of Nigerian Shareholders (AARNS), also said the shareholders could not but thank the Board and Management of Dangote Cement for a job well done.

Umar also noted that no company, in recent times, has been able to be as profitable as Dangote Cement, just because of the sound judgment of the management in navigating the murky economic weather which has had negative impact on results of some other companies.

He commended Dangote for his patriotism and dedication to the cause of Nigeria and her people with his decision to reduce prices of his petroleum products.

Umar also expressed hope that the price of Premium Motor Spirit (PMS), popularly called petrol, would reduce once the Dangote Petroleum Refinery rolls out the product soon.