Dangote Sugar released its Q1 financials and as expected was impressive. See below;
The Company made a revenue of N26.7b for the first quarter (Q1) of 2012. This was 24.1% higher than the results obtained in the same period last year. The growth rate is monstrous dwarfing the 15.5% increase year on year (Dec 2011). The Sugar business is an integral and important part of the Group’s assets dominating the Sugar business for decades now. Its hard to envisage a slow down in revenue in Q2
Gross Profit also grew by 64.9% to N5.33b on the back of strong revenues. Gross Profit Margin was 19.97% an increase of 32.9% when compared to the same period last year. This shows a strong efficiency amidst growth in revenue as cost of sale grew by a lesser margin than Revenue did.
Operational Profit for the period was a massive N4b for the first 3 months of operation a massive 112% rise when compared to the same period in (Q1) 2011.The rise in Operational Profit can be attributed to a stable Selling and Distribution, General and Admin Expense (SGA)which even came up slightly lower than Q1 2011. SGA was just 25% of Gross Profit which in my opinion displays a high level of cost control and market dominance. Company’s in highly competitive industries typically have SGA’s as a percentage of Gross Profit at an average of over 50%. Basically, SGA cost is mostly cost that have to be incurred during the ordinary course of business which my not require any major new spend. This is further highlighted in the strong operational profit margin of 15%. If the company is able to maintain the same level if Admin and Operational cost obtained in the prior year, then expect margins to continue to rise on the back of revenue.
Profit After Tax
Profit After Tax increased 101% to N2.8b for the first quarter of 2012. A remarkable result amidst a turbulent first 3 months in the wider economy. Profit After Tax magin was 62% more when compared to Q1 in 2011. At this rate Dangote Sugar’s share price of N3.58 to double in the course of the year blasting past its year high of N3.7. This result will boost the market and the economy as a whole. Shareholder, also have a lot to smile for as Return on Equity for the first quater was an impressive 6.6% which at this rate may produce a 26.4%
Dangote Sugar is a power house in the Sugar Business and will continue to dominate all through the year. It is hard to see any adverse impact on its revenues going by this trend. The company ticks all the boxes and surely gets a black ink.