Dangote withdraws interest in South Africa’s PPC
Dangote Cement Plc has withdrawn its interest in acquiring the entire share capital of PPC Limited (PPC) of South Africa.
On the 13th of September 2017, Dangote Cement Plc notified the Nigerian Stock Exchange of its interest in acquiring the entire share capital of the South African cement company.
In a notice obtained from the NSE, the management of Dngote Cement said: “With reference to the notification, be informed that on the 5th of October 2017, the Board of Directors of DCP formally notified the Board of Directors of PPC that it no longer had an interest in acquiring the entire share capital of PPC Limited.”
Africa’s richest man, Aliko Dangote, joined the race in September to buy South Africa’s biggest cement producer. PPC is already the subject of an all-share merger bid that values the firm at $700 million by local rival AfriSam.
Dangote Cement Plc, which is the most capitalised firm listed on the NSE, had recently confirmed that it plans to acquire the entire share capital of PPC Limited-South Africa’s leading cement firm.
In a notification to the NSE, the board of directors of Dangote Cement disclosed it had communicated its interest to acquire the entire share capital of PPC to the board of directors of the South Africa’s firm.
However, Dangote Cement explained that the acquisition talks are still at the preliminary stage and the transaction remains a potential transaction.
“Further details will be published subsequently, as appropriate,” Dangote Cement stated.
Dangote Cement has embarked on expansion of its operations to other African countries. The Chairman of the Dangote Cement, Alhaji Aliko Dangote last May told shareholders that the Pan-African diversification programme provided the essential foreign currency and streams of cash to operate the company despite the challenges that characterised 2016.
According to him, the Nigerian economy fell into recession in 2016, inflation peaked at 18.6 per cent, while resurgence in attacks on oil and gas pipelines in Southleft Ibese and Obajana factories short of fuel.
He, however, noted that the results of strategic decisions taken a year ago enabled Dangote Cement to strengthen its business and consolidate its position in a year when many others in Nigeria and across the rest of Africa have struggled against economic downturn.
“Our Pan-African diversification has provided cash streams from countries such as Senegal, Cameroon and Zambia, which have provided us with essential foreign currency as foreign exchange controls made it difficult for us to obtain dollars for operations. Furthermore, we were able to borrow money in these countries’ local currencies, thus reducing our exposure to foreign currency shortages in Nigeria. In addition, we began to generate foreign currency sales from exports of cement from Nigeria to Ghana,” Dangote said.
Having delivered improved full-year results for 2016, Dangote Cement Plc recorded another improved performance for H1 of 2017, sending positive signals to investors to expect another bounteous harvest at the end of the year.
Dangote Cement posted a revenue of N412.7 billion for half year ended June 30,2017, up by 41.2 per cent from N292.2 billion in the corresponding period of 2016. Production cost of sales rose from N139.2 billion to N177 billion, while administrative expenses grew marginally from N19 billion to N20.9 billion.
Dangote Cement closed the H1 with profit before tax (PBT) of N155.5 billion, showing an increase of 24 per cent from N124.8 billion in 2016. Profit after tax (PAT) grew faster by 39 per cent to N144 billion, from N103 billion in the corresponding period of 2016.