Dangote Cement Launches ₦100 Billion Commercial Paper Programme at 17.50% and 19% Yields

Dangote Cement Plc has launched a N100 billion Commercial Paper (CP) issuance, representing the first tranche under its N500 billion CP Issuance Programme.

The offer opened on Monday, 17 November 2025, and will close on Wednesday, 19 November 2025.

The CP is being issued in two series:

• Series 1 (181 days): 16.10% discount rate, translating to a 17.50% yield.

• Series 2 (265 days): 16.70% discount rate, translating to a 19.00% yield.

The minimum subscription is N50 million, with additional increments in multiples of N1,000. According to the pricing documents, proceeds will be deployed to support the company’s working capital requirements.

Key Background

Dangote Cement continues to post strong financial results, solidifying its status as one of Nigeria’s most profitable and stable corporations.

Over the past five years, revenue has risen from N1.03 trillion in 2020 to N3.58 trillion in 2024, representing an impressive 37% annual growth rate. Profit after tax has also climbed steadily, doubling from N276 billion in 2020 to N503.25 billion in 2024 — a 16.2% CAGR.

For the nine months ended September 2025, performance remained robust:

• Revenue: N3.15 trillion, up 22% from N2.56 trillion in 2024.

• Profit Before Tax: N1.04 trillion, a 150% surge from N406.4 billion.

• Profit After Tax: N743.3 billion, more than double the N279.1 billion recorded last year.

• Operating Cash Flow: N1.29 trillion, up from N532 billion in 9M 2024.

• Borrowings: Reduced by 47% to N1.32 trillion, down from N2.5 trillion in December 2024.

• Interest Coverage: Improved to 4.4 from 3.3, highlighting stronger debt-servicing capacity.

However, the company did experience lower production volumes in 9M 2025, signalling that recent growth has been driven more by pricing than volume—a trend that may pose future risks.

Ratings Overview

Recent evaluations from credit rating agencies reflect Dangote Cement’s strength while highlighting areas of concern.

• DataPro reaffirmed its AA (long-term) and A1 (short-term) ratings, citing strong brand equity, a solid earnings record, and experienced leadership. The agency flagged low asset utilization, FX exposure, and risks in certain Pan-African markets.

• GCR Ratings downgraded the company from AA+(NG) to A+(NG) in October 2025—not due to operational weakness, but owing to a “group-cap effect” linked to its parent company, Dangote Industries Limited. GCR nonetheless noted strong cash flows and expects improvements in leverage by year-end 2025.

Investor Takeaway

Dangote Cement’s solid financial performance and improving balance sheet make its N100 billion CP offer attractive for investors seeking short-term returns.

Key positives:

• Strong revenue and profit growth, even in challenging market conditions.

• Robust operating cash flow of N1.29 trillion, underscoring the firm’s ability to meet debt obligations.

• Borrowings reduced by nearly half, with a debt-to-equity ratio of 0.54, signalling enhanced financial stability.

• Competitive yields of 17.5% to 19%, offering appealing short-term returns.

Risks to monitor:

• Declining production volumes, which could pressure margins if pricing power weakens.

• Exposure to FX volatility and geopolitical risks affecting Pan-African operations.

Bottom Line

Despite certain risks, Dangote Cement’s strong cash flow position, healthier leverage, and industry dominance make its Commercial Paper issuance a compelling option for investors seeking secure, high-yield, short-term opportunities.