Dangote Cement Plc has announced the conclusion of the first tranche of the share buy-back program, which lasted two days, from July 17th to 18th, 2023.
The total number of shares repurchased, which represented 0.71% of the Company’s issued and fully paid ordinary shares, was 121,404,714 according to the company’s report, which was signed by the Head of Investor Relations, Temilade Aduroja.
The value of the shares that were bought back at an average price of N339 was N41.15 billion.
The statement says, in part:
“As of the end of Tranche I, there are 16,752,154,537 issued and existing shares of DCP that are completely paid.
“The shares that were bought back will be kept as Treasury shares and could eventually be canceled. Execution of this transaction did not have any material impact on the Company’s financial position”.
Recall that Dangote Cement Plc. has started the Tranche I share return program, presenting 168,735,593 fully paid-up ordinary shares of 50 Kobo each, representing 1% of the total number of currently issued shares to be repurchased.
Throughout the course of the program, the scheduled share purchases were to be made at the NGX on the open market.
When compared to not repurchasing shares, a share repurchase lowers the total assets of the company, improving its return on assets, return on equity, and other metrics.
Earnings per share, which increase as revenue and cash flow do, might grow more quickly when the number of shares is decreased.
Increasing long-term shareholder value is one of the goals of the share buyback. The practice of continuously optimizing the cement manufacturer’s capital structure and balance sheet is also anticipated to be supported by the exercise.
This indicates that share repurchases are anticipated to lower the cost of capital and increase investor value while enhancing financing and balance sheet efficiency.
On the strength of a favourable response to the company’s announcement of the Tranche I share repurchase program, Dangote Cement Plc rose to become the highest capitalized stock on NGX.
On Thursday, July 20, 2023, the share price of the world’s largest cement company traded flat to settle at N352 per share, with a market capitalization of N5.99 trillion.
Dangote Cement’s audited financial statement for the fiscal year ended December 31, 2022, declared a profit of N382 billion for the year compared to N364 billion the previous year, with revenue increasing by 16.9% compared to N1.384 trillion the previous year.
