2013 9 Months Results Snapshot ↓
Dangote Sugar released its 2013 9 Months Unaudited results showing a 5% drop in revenue to N77.2billion compared to the same period last year where they posted a revenue of N81.3billion. Gross Profit was however higher at N18.2billion compared to the same period last year as the company continued its remarkable ability to hold down cost. Operating profit this period was N13.4billion beating last year’s result of N11.1billion. Dagote Sugar closed the period with a pre-tax profits of N11.3billion and over N3billion higher than sae period last year.
Quarter on Quarter
- Dangote Sugar has been stuck with quarterly revenues of no more than N28billion over the last 6 quarters.
- However, the 5% drop this year was the first year on year drop this year even as it tilted on the bother of 2% for Q1 and H1
- A closer look at revenue breakdown indicates sales in 50KG sugar slid by about N4.3billion compared from the same period last year. In addition, their Lagos market also suffered a dip as sales dropped by about N12billion year on year.
- As indicated Gross Profit was helped out by a stable Cost of sale. The company was able to maintain a below N21billion cost of sale all throughout this year. Gross Margin was therefore better at 25%
- This success was largely due to the drop in raw material cost. RM Cost dropped from N60billion (same period last year) to N47.6billon this year. Commodity Sugar prices have been down this year from $0.20 last year october to $0.17 this October (2013) so it’s no surprise they were able to reign in on cost.
- Dangote Sugar acquired 95% of Savannah Sugar in January 2013 for a sum of N3.2billion and N1.5 per share. Savannah Sugar it is in the business of milling and growing sugar cane and refining raw sugar. The vertical integrated style purchase is a strategic move at backward integrating the company’s line of operations. It is important to note though that little is known of the company as its financials were not revealed.
- Savannah Sugar does owe Dangote Sugar about N23billion in intercompany loans.
- Dangote Sugar pays Dangote Industries Ltd a Management fee of about 2% of revenues per annum. It has cost them about N1.5billion this year alone.
- Dangote Sugar shares traded at N11.5 (28/10) dropping 3.3% following the announced result. P.E ratio is currently 12.2x.
Dangote Sugar released its 2013 9 Months Unaudited results in the website of the NSE