Dangote Cement's Nigerian unit posted a net profit of 747.4 billion naira between January and September 2023, up 173% YoY. An analysis of this result showed it is largely attributed to foreign exchange gains, amplified by the depreciation of the naira.

Dangote Cement Nigeria announced a net profit of N747.4 billion ($930 million, $1=800 naira) for the first nine months of 2023, according to unaudited financial results accessed on the Lagos Stock Exchange. This corresponds to an increase of 173% compared with the same period in 2022, and nearly 1.8 times the company's total net profit for 2022.

Sales reached N933 billion during the period under review, up from the N891 billion achieved within the same period in 2022. However, the remarkable increase in Dangote Cement Nigeria's net profit is due to the depreciation of the naira against the CFA franc. The company, which sells some of its products on external markets, notably in Nigeria's neighboring countries using the CFA franc (a stable currency) increased its foreign exchange earnings more than 8-fold, reaching 588 billion naira.

When President Bola Tinubu came to power, he fulfilled his campaign promise by ending the exchange rate system's dual management of foreign reserves. This system was divided into an official window with rates set by the central bank and a parallel, variable-rate system. This move resulted in the depreciation of the Naira against several currencies, including the CFA Franc, used by Nigeria's closest trading partners.

The depreciation negatively affected input importers like Total Energie Nigeria and breweries like Nigerian Breweries, but Dangote Cement Nigeria reaped significant benefits. The gains from the exchange rate also had a positive impact on Dangote Cement's business listed on the Lagos Stock Exchange, doubling the value of pan-African sales. However, this development is primarily attributed to the weaker Naira, as the sales volumes remained almost constant.

The reaction of investors who own Dangote Cement shares is expected following the publication of these results. The share has gained 15% since the start of 2023, but was down 11% in the last 90 days. Over a five-year period, the Dangote Cement share has been rather beneficial for investors, according to calculations carried out by Ecofin Agency. The total return, including dividends, reached 131%, compared with just 102% for the entire equity compartment on the Lagos financial market.