Dangote Cement share price continued its surge this week even as the Nigerian economic crisis continued.
The stock has risen in the past six straight weeks and reached its all-time high. It has soared by more than 810% from its lowest point during the pandemic.
As a result, Aliko Dangote’s net worth has spiked by more than $7 billion this year alone. Forbes places his net worth at over $20.5 billion while the Bloomberg Billionaire Index places it at $22.3 billion, making him the 80th richest person on earth.
The main catalyst for the ongoing surge of the Dangote Cement stock price is that Aliko has started his giant refinery in Lagos.
According to Bloomberg, the refinery is using both Nigerian and American oil and is expected to pump more oil in the coming years. American oil is seen as being cheaper than Nigerian oil, which is priced using the Brent standard.
Dangote Cement is not part of his refinery project. However, investors are using it as a proxy for the energy project. One of these investors is Femi Otedola, a billionaire who also holds stakes in Geregu Power, Zenith Bank, and FBN Holdings. He has a net worth of over $1.3 billion.
Dangote Cement’s stock has surged even as Aliko Dangote faces personal challenges. Anti-corruption officials recently visited his office in a long-running corruption case that has also involved the former central bank governor.
Some analysts warn that this crisis could hurt Nigeria’s economy.
Dangote, like other Nigerian companies, are going through a rough patch as inflation spikes and the naira depreciates. The implication is that the construction industry will see weaker growth as the cost of cement, steel, and other imported items jump.
The most recent financial results showed that the company’s revenue jumped by 17% in 2022 to NGN 1.6 trillion. Its EBITDA rose by 3.5% to 708 billion naira.
The company’s revenue in the first nine months of the year came in at 1.5 trillion naira, up by 28.7% from the same period in 2022. Profit after tax rose by 30.2% even as the group sales revenues dropped by 2.4%.
The challenge for Dangote Group and other Nigerian companies is that these strong figures are being hurt by the depreciated currency. The Nigerian naira has plunged by more than 50% in the past few months, making it one of the worst-performing African currencies.
