Dangote Sugar records 41.5% growth in revenue catapulted by surge in commodity price

NIGERIA – Dangote Sugar Refinery, one of Nigeria’s leading sugar processors has reported a 41.5% surge in first quarter (Q1) revenue, for the period ended March 2021, to N67.39 billion (US$164m) compared to N47.6 billion (US$116.4m) earned in the same period in 2020.

The rise in revenue is attributed to increase in sales volume as well as an uptick in price, reports Naira Metrics.

During the period under review, the sugar producer witnessed its sales value increase by 41.5%.

The company has indicated that it had no choice but to increase prices because of the impact of the 2020 devaluation, higher inflationary environment, port congestion issues and a rise in global sugar prices.

“We have continued to witness high cost of raw materials, energy costs and other input costs due to rising inflation and FX rate fluctuation. Further cost escalation is anticipated in the year as inflationary pressure mounts,” the company said.

Dangote Sugar’s Q1 profit grew by 30.3% to US$20.3m

Meanwhile, group sales volume increased in the quarter by 5.7 percent to 200,510 tonnes, courtesy of sustained efforts to drive customer base expansion, several trade initiatives and investments.  

Group production volume also increased by 4.3% to 200,783 tonnes from 192,584 tonnes due to the company’s operations optimization strategy despite the challenges of the Apapa traffic situation.

Commenting on the results, the Group Managing Director/CEO of DSR Plc, Ravindra Singhvi, said, “We commenced the year on a fair footing as our Q1 2021 financial results show our commitment to delighting our customers and consumers with high quality products and delivering value for all stakeholders.

“We have experienced improved yield from our sugar cane plantations and continue to partner with our out growers for the supply of sugar cane for production.”

Profit rise by 30.3%

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Gross profit increased by 41.8% to N18.04 billion (US$44.13m) from N12.72 billion (US$31.12m), on account of better top line performance while EBITDA increased by 34.7% to N17.02 billion (US$41.6m) on account of increased earnings.

Similarly, operating profit stood at N15.884 billion (US$38.8m), with financing cost more than doubling from N1.353 billion (US$5.3m) to N3.412 billion (US$8.3m).

Dangote Sugar’s profit before tax rose from N9.509 billion (US$23.2m) recorded in the corresponding quarter to N11.949 billion (US$29.2m) in the quarter under review.

Profit for the period grew by 30.3% from N6.372 billion (US$15.59m) to N8.302 billion (US$20.3m), reflecting management’s unrelenting drive to deliver consistent shareholder value.

Dangote’s outlook

Despite the operational headwinds, the company is committed to improve its operations and seek growth in its sugar sales volumes.

It recently received approval from the government to revise its local sugar production targets to 550,000 metric tonnes annually from over 1 million metric tonnes annually.

“We remain committed to the implementation of the Dangote Sugar for Nigeria” Master plan as we continue to pursue our Backward Integration Projects,” said Ravindra Singhvi.

DSR is Nigeria’s largest producer of household and commercial sugar with 1.44M MT refining capacity.

Its refinery located at Apapa Wharf Ports Complex, refines raw sugar imported from Brazil to white, Vitamin A fortified refined granulated white sugar suitable for household and industrial uses.

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