The general themes in Nigeria's cement sector include capacity expansion, utilisation, and rising prices. These themes were central to the sector's double-digit revenue growth in FY 2022. However, cement producers have recently begun facing dwindling volume growth and margin pressures from surges in the cost of energy (especially diesel), distribution, haulage, and other operating expenses. In addition, finance cost increases have been driven by foreign exchange losses. Nevertheless, pioneer tax incentives have consistently helped lower effective tax rates across the industry, which has supported strong EPS growth and cascaded to an average dividend payout ratio of c.70.0% across industry players.
