Citation:

Joy Odekhe Eshioramhe, J.A. Adejuwon. "Energy Consumption Costs and Financial Performance of Quoted Cement Manufacturing Companies in Nigeria" International Research Journal of Economics and Management Studies, Vol. 4, No. 11, pp. 77-84, 2025. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V4I11P111

Abstract:

This study investigates the relationship between energy consumption costs and the financial performance of publicly listed cement manufacturing companies in Nigeria. Energy costs constitute a significant portion of operational expenditures in the cement industry due to its energy-intensive nature, primarily involving electricity and fossil fuels in clinker production, grinding, and packaging processes. The study draws on audited financial statements of quoted cement companies in Nigeria for the period of nine years (2015–2023). The descriptive statistics indicate that Energy Efficiency Ratio (EER) has a mean of 0.24 and the highest variability (SD = 0.32, Skewness = 2.22), suggesting differences in energy usage effectiveness across firms. Electricity Energy Cost (EEC) shows a lower mean (0.16) and minimal dispersion (SD = 0.09), indicating relatively stable electricity costs across firms. Specific Fuel Energy (SFE) has a mean of 0.20, high kurtosis (5.61), and positive skewness (2.26), meaning some firms incur significantly higher fuel-specific energy than the rest. The three financial performance indicators: Sales Revenue (SR), Gross Profit (GP), and Profit After Tax (PAT) show statistically significant relationships with energy consumption cost, as their p-values are below the 0.05 threshold (Sales Revenue (SR) and Gross Profit (GP): 0.00; Profit After Tax (PAT): 0.01. High t-statistics (Sales Revenue (SR): 16.75, Gross Profit (GP): 13.27, Profit After Tax (PAT): 4.87 indicate strong evidence against the null hypothesis, suggesting that energy consumption cost significantly influences each aspect of financial performance. Positive coefficients (6.93 for SR, 3.81 for GP, 1.25 for PAT). The research provides practical insights for stakeholders, including policymakers, investors, and industry managers, in designing cost-effective energy policies that support sustainable industrial growth and financial resilience in the cement manufacturing sector.

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Keywords:

Financial Performance, Energy Cost, Cost Management, Cement Manufacturing.