NIGERIA – One of Nigeria’s leading sugar processors, Dangote Sugar Refinery, has recorded a double-digit growth in its half-year revenue for the period ended June 2021 to N131.95 billion (US$320m) in contrast to N103.23 billion (US$250m) recorded at the same period in the preceding year.
The 27.8% jump in top-line performance is attributed to increase in group sales volume to 388,589 tonnes while production volume also increased by 7.6 per cent to 403,846 tonnes driven by operations optimization drive.
The Nigeria Stock Exchange Listed company generates its revenue through the sale of sugar, molasses and freight income.
According to report by This Day Live, the sale of its 50kg Dangote sugar closed H1 2021 at N128.4billion (US$311m) from N98.33billion (US$238m) while revenue from the sale of sugar-Retail dropped by 40 per cent to N2.35billion (US$5.71m) from N3.88billion (US$9.43m).
The gain in 50kg of Dangote sugar was primarily driven by price implemented in second quarter (Q2) of 2021 as decline in retail sugar of the company is the highest quarterly decline in at least 18 quarters.
Meanwhile, revenue from the sale of molasses stood at N667.99million (US$1.62m) a rise from the previous year’s N390.07million (US$950,000).
Freight income was down by nearly 10 per cent to N571.36million (US$1.39m) from N634.32million (US$1.54m) in H1 2020.
Commenting on the Company’s half-year 2021 performance, the Group Managing Director/CEO, Ravindra Singhvi said, “We commenced the year on a strong footing with impressive performance in first half as the financial results have shown, with a stronger Q1 topline growth and a robust Q2 topline growth year on year.
“During the period under review we launched our new packaging designs for the 50kg fortified and non-fortified sugar bags with the theme “Dangote Sugar has a new look…. Same Great Quality”.
“The theme reaffirms the quality of our product and inspires a deeper connection to the Dangote Sugar brand among our valued customers and consumers, whilst refreshing our market presence as the leading sugar brand in Nigeria.”
Despite the gains in revenue, its cost of sales for period rose by 25.4 per cent to N103.36billion (US$251.13m) from N82.41billion (US$200m), driven primarily by 36 per cent growth in raw materials costs and 29 per cent increase in freight expenses respectively.
Interplay between revenue and cost of sales position Dangote Sugar’s gross profit to N28.59billion (US$69.46m) in H1 2021, 37.3 per cent increase from N30.82billion (US$74.88m) reported in H1 2020.
However, total operating expenses rose by 36.6 per cent to N5.24billion (US$12.73m), mostly driven by administrative expenses that gained 41.4 per cent to N4.95billion (US$12.03m).
Dangote Sugar’s selling and distribution expenses appreciated by 13.5 per cent to N288.8million (US$701,000) with its overall operating profit standing at N23.48billion (US$542m), and its Net finance cost stood at a negative of N4.8billion (US$11m).
This led to the company attaining N18.76billion (US$45m) in profit before tax from N17.04billion (US$41.4m) reported in the prior period.
Dangote Sugar paid a tax of N6.15 billion (US$14.94m), dragging profit after tax to N12.61 billion (US$30m), 8.85 per cent higher when compared to N11.58 billion (US$28.1m) reported in H1 2020.
The company might sustain its revenue growth this year on the back of the Central Bank of Nigeria (CBN) policy that licensed three firms to exclusively import sugar into the country.
Dangote Sugar was one of the companies to receive the go-ahead following massive investments in the industry in line with the federal government’s National Sugar Master Plan.
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