Wealthiest man in Africa, Aliko Dangote, saw a considerable boost in his net worth at the end of the first week of November.
Shares of his flagship company, Dangote Cement Plc, surged by double digits, staging a recovery from their slump in October.
Dangote’s net worth climbed by $700 million in the past week, going from $17.6 billion on November 1 to $18.3 billion on November 7, according to the Bloomberg Billionaires Index, which measures and compares the fortunes of the world’s 500 richest people.
The performance of his 86 percent investment in Dangote Cement, a publicly traded company, can be blamed for the large increase in his net worth over $18.3 billion, as the share price of the industry leader rebounded quickly after hitting a one-year low near the end of October.
The $700-million bump in his wealth figures was fueled by an 8.8 percent increase in the company’s share price on the Nigerian Exchange from N220.5 ($0.502) on November 1 to N240 ($0.546) at the time of writing this report, as investors on the local bourse renewed buying interest in the company’s shares, which continue to trade below their fair value.
According to Simply Wall St, a Sydney-based research firm, the company’s shares are trading below analysts’ calculated fair price-to-earnings ratio, a financial ratio that compares a company’s valuation to earnings and tells investors how much a company is worth.
The Australian company also revealed that the cement maker’s earnings are expected to grow by 18.83 percent per year and that analysts are unanimous in their prediction that the company’s stock price will rise by 38.8 percent in the short to medium
Leaving aside these estimates, Dangote Cement is struggling to outperform last year’s financial results, with profits falling by double digits at the end of the first nine months of its current fiscal year due to lower demand and rising energy costs.
The group’s earnings dropped by 23.4 percent to N213.1 billion ($486.5 million) at the end of the first nine months of its 2022 fiscal year, from N278.25 billion ($635.2 million) the previous year, according to figures contained in the group’s recently published financial statement, as rising energy and distribution costs ate into its earnings.
In light of the drop in earnings, the billionaire businessman, who is not only Nigeria’s richest man but also Africa’s richest billionaire, may receive a lower dividend next year than the N293 billion ($704.1 million) he received this year.
Source: Billionaire Africa