Dangote Sugar Plc, a subsidiary of Dangote Industries has declared revenue of N131.95 billion in the half-year period of 2021, reflecting a growth of 27.82% compared to N103.23 billion recorded in the same period of 2020.
This is according to the company’s latest financial statements for the second quarter of 2021.
Similarly, the financial report, revealed that net income increased by N1.03 billion, reflecting a growth of 8.89% from N11.58 billion recorded in the corresponding period of 2020 to N12.61 billion in the current period.
The company generates its revenue through the sale of sugar, molasses and freight income. The notes to account further revealed that the sale of sugar constitutes the majority of revenue recorded during the period while freight income generated the least income for the company.
Furthermore, the company’s management was able to cut down certain expense line items such as depreciation, management expenses, direct labour costs and overhead, and selling and distribution expenses for the period. However, raw material costs increased from N61.58 billion to N83.77 billion year on year.
More than 10% of total sales made during the period were from Nigerian Bottling Company and Seven-Up Bottling Company Limited. These companies purchased industrial non-fortified sugar from Dangote Sugar Plc. Meanwhile, 35% of sales made during the period were to industrial users such as manufacturers of confectioneries and soft drinks.
Other income for the period, however, declined from N409.68 million in 2020 to N128.91 million in the current period. This was due to the significant reduction in the provisions no longer required in its financial statement.
The statement of financial position revealed that the company holds a healthy financial position as net assets during the period stood at N119.09 billion.
Backstory
Recall that, in December 2020, the board of Dangote Sugar Refinery Plc, successfully wound up its sugar business in Niger State.
The decision was made in an effort to cut down on deadweight cost, coming from a stretched situation from its host community which had started accumulating negative returns for the integrated sugar business.
What you should know
Dangote Sugar Refinery Plc is one of Nigeria’s leading integrated sugar companies, and a major refiner of raw sugar with a key focus on the production of fortified and non-fortified granulated white sugar.
The company has a total installed capacity of 1.44 million metric tons (MT) per annum with key expansion plans in place.
Its operational activities aside from sugar production include the distribution of refined white sugar to consumers and industrial customers in the country, and also the exportation of its products to other West African countries.
In Q1, Dangote Sugar Refinery Plc reported a growth of 41.46% in revenue. In the same vein, net profit for the period grew by 30.30% from N6.37 billion to N8.30 billion.
Dangote Sugar Plc is currently trading at N18.50 per share and its market capitalization stands at N225 billion as of Friday, July 30, 2021. Year-to-date performance shows that the share price of the company has grown by 5.11%.
