Dangote Sugar sweetens 2022 outlook with positive performance in first half year

NIGERIA – One of Nigeria’s leading sugar processors, Dangote Sugar Refinery has recorded a revenue growth in the six months ended June 2022 from N131.95 billion (US$317m) to N185.46 billion (US$445m).

The positive top-line performance was also reflected on its bottom-line recording a profit before tax (PBT) of N29.73 billion (US$71m).

According to the refiner’s unaudited results posted on the portals of the Nigerian Exchange, PBT rose by N10.97 billion (US$26m) compared to N18.76 billion (US$45m) recorded at the corresponding period in 2021.

Review of the results indicated that profit after tax (PAT) rose by N7.63 billion (US$18.35m), to N20.24 billion (US$48.7m) in contrast to N12.61 billion (US$30.32m) in the 2021 half year. Gross profit maintained the same upswing, rising from N28.60 billion (US$68.7m) to N38.82 billion (US$93.34m).

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Group managing director, Dangote Sugar Refinery Plc, Ravindra Singhvi in his remarks attributed the positive results in the half year to key trade interventions introduced during the year and positive market responses.

He said, “Our impressive performance in the half year demonstrates our resilience in the face of prevalent challenges, which rightly reflected in strong topline growth shown in the financial results.”

The up-beat half year performance bodes well for the company’s full year performance, setting pase for a positive outlook compared to the previous year.

In the year ended December 2021, the sugar maker registered a 26% decline in full year profit to N22.05 billion (US$53.09m) in the period ended December 2021.

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This was despite attaining a 28% growth in top line performance from N214 billion (US$515m) to N276 billion (US$664.5m), driven by growth in sales volumes.

Bottom-line profit was greatly subdued by high production costs, occasioned by inflationary pressure, and impact of foreign currency devaluation.

Dangote Sugar Refinery has continued to implement its sugar backward integration projects plans and the enhancement of its out growers scheme to support the economic growth of the immediate communities.

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The company aims to develop a robust outgrower scheme with about 5,000 outgrowers when the projects have fully taken off, in addition to the achievement of other targets of its Sugar for Nigeria Project plan.

Under the plan, Dangote Sugar seeks to become a global force in sugar production, by producing 1.5M MT/PA of refined sugar from locally grown sugar cane for the domestic and export markets.

To achieve this, the refinery acquired DSR Numan Operations (Savannah Sugar Company Limited), located in Numan, Adamawa State in December 2012, and embarked on the ongoing rehabilitation of its facilities and expansion of its 32,000 hectares’ sugarcane estate.

In September 2020, the scheme of merger between DSR and Savannah Sugar Company Limited was completed which gave birth to a bigger and stronger business with considerable opportunity for growth and delivery of superior benefits to all stakeholders.

The expansion of Savannah Sugar company to the tune of US$700m is still ongoing as well as the development of the greenfield site acquired at Tunga, Nasarawa State for the achievement of DSR’s sugar for Nigeria development master plan.

Being one of Nigeria’s largest producer of household and commercial sugar, Dangote Sugar Refinery has a 1.44M MT refining capacity at the same location, 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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