Dangote Sugar released its 9months 2012 unaudited accounts growing revenue by 2% to N81b compared to the same period last year. The growth rate is down from the 10% posted in the first six months of this year, indicative of a slow down in demand in the second half of this year. However, Gross profit margin rose 51% to N15.5b as direct cost (cost of sale) gulped nearly 80% of turnover. The cost of sale N65b is down 5% from same period last year even as inventories dropped by more than half to N8.8b from the N19b it held same period last year. This is bound to reflect positively on cost.
Operational Profit also increased to N11.2b representing an 82% rise over last years figure. Pre-tax profits was N12b helped by interest income of another N796m for the period. Dangote Sugar is known to borrow less from banks as it relies heavily on cash from its parent company to fund its operations a model that is not immune to its own frailties. However, with net cash flows from operations of N15b, the company is in a sound financial footing with enough liquidity to compete. Investments increased three folds to N2b, still it is just 13% of operating cash flows.
Earnings per share was for the period was 68kobo 85% higher than the 37kobo posted same period last year and 47% higher than the 46kobo it earned the whole of last year. It’s early times as the last three months of the year is usually known for exceptional and extraordinary items which can make or mar a companies full year earnings. But with pre-tax profits in excess of N12b there is enough comfort for shareholders to remain optimistic. Share price has remained steady at N5.3 currently down from its year high of N6.75 in October. Nevertheless, this still represents a sweet price earnings of 7.79x and even sweeter at 5.82x when annualized. My taste buds must be buzzing.
Dangote Plc’s 2012 9 months unaudited accounts is posted on the website of the NSE