Dangote Hits U.S.$20 Billion Mark, Now 25th Richest in the World

Dangote Hits U.S.$20 Billion Mark, Now 25th Richest in the World
Nigerian Billionaire Aliko Dangote

AFRICANGLOBE – In line with his goal to become one of the five wealthiest people in the world in four year’s time, Aliko Dangote kept faith with his target last week, when he moved up 18 places on the Forbes magazine Rich List to emerge the 25th richest man in the world.

With the share price of his flagship Dangote Cement Plc skyrocketing to N191 per share by the close of trading last Friday on the Nigerian Stock Exchange (NSE), the business mogul saw his personal networth correspondingly inch up to $20 billion, making him the first African to hit the $20 billion mark.

With a current market capitalisation of $20.5 billion, Dangote Cement has also become the first Nigerian company to achieve a market capitalisation of over $20 billion.

The US-based Forbes magazine reported that Dangote’s 93 per cent stake in the cement company is now worth $19.5 billion.

Added to this are his controlling stakes in other publicly-listed companies like Dangote Sugar and National Salt Company of Nigeria, as well as his significant shareholdings in other blue-chips like Zenith Bank Plc, UBA Group and Dangote Flour Plc; his extensive real estate portfolio, jets, yachts and current cash position, which includes more than $300 million in recently awarded Dangote Cement dividend, making Dangote’s personal networth exceed $20 billion.

To put it in the right context, Forbes reported that the billionaire is now among the top 25 richest people in the world.

With his fortune, Dangote is richer than Russia’s richest man, Alisher Usmanov, richer than India’s Lakshmi Mittal and running neck and neck with India’s Mukesh Ambani.

He is also snapping on the heels of such Americans as Google’s billionaire founders Larry Page and Sergey Brin.

Dangote Cement recently recorded an unprecedented surge in its share price largely due to the market’s response to the company’s impressive results in the first quarter of this year.

The cement manufacturer’s unaudited results for the three months ending, March 31, had shown that the company’s pre-tax profit rose to $339 million, representing an 80.6 per cent increase from last year and a strong indicator of the company’s future earning potential.

The results also indicate a 79.5 per cent rise in its earnings per share over the corresponding period last year.

In an email to Forbes, Carl Franklin, Dangote Cement’s Head of Investor Relations in the United Kingdom, was quoted to have explained the rise in the company’s share price, stating that in the first quarter of 2013, the company had a huge increase in demand across Nigeria, gas supply improved considerably and capacity was ramped up.

“So Q1 (first quarter) was the first sign of just how profitable we can be in Nigeria. The amazing thing is that 66 per cent of our gas-fired production in Q1 was done at 84 per cent gas.

“Imagine what would happen to margins if we did the same amount at 95 per cent. This has given investors a good sense of what we can really do when everything goes in the right direction,” Franklin said.

“It’s certainly a landmark for a Nigerian company and we’re proud to be the first to achieve it. Obviously we are focusing on building long-term and sustainable value for shareholders through our investments in Nigeria and Africa.

“Nigeria is a very entrepreneurial country and I can assure you that other companies will follow us in achieving this,” he added.

Dangote Cement currently accounts for more than a quarter of the total market capitalisation of the NSE. The second largest company on the bourse is Nigerian Breweries Plc, West Africa’s largest manufacturer of alcoholic and non-alcoholic beverages. The company has a market cap of $8.5 billion.

Dangote debuted on the Forbes billionaires list in 2008 with a personal fortune of $3.3 billion. His fortune dropped to $2.5 billion in 2009 and plunged further to $2.1 billion in 2010, but surged 557 per cent in 2011 to $13.8 billion after he took Dangote Cement public.

He dropped to $11.2 billion in last year’s rankings, but rebounded at $16.1 billion this year. Since March, his fortune has jumped another 30 per cent.

Forbes believes Dangote still has bigger ambitions. He reportedly told Forbes Wealth Editor Luisa Kroll at Davos in 2011 that he expected his firm to have a market capitalisation of $60 billion within five years.

At $20.5 billion, Dangote Cement still has a long way to go to live up to that dream, and while it is quite unlikely that Dangote Cement could hit a $60 billion market cap by 2016, don’t write it off as “impossible”.

With Dangote, you never know.


By: Kunle Aderinokun