Dangote Sugar grows net profit by 17% on prudent resource management

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Nigeria’s biggest sugar refiner, Dangote Sugar Refinery Plc, kicked off the year 2019 on a positive note as its management showed efficiency in utilizing the company’s limited resources for increased profitability.

After-tax profit of the sugar refiner rose to N7 billion in the first three months of 2019, representing a 32.7 percent increase from N5.28 billion in the same period a year earlier, while pre-tax profit surged more than a quarter to N10.7 billion from N8.4 billion.

Margins of the company were impressive for the period. Net profit margin improved to 18.4 percent from 12.8 percent, implying the company gained more than N18 from every N100 revenue it generated from sales between January and March 2019.

Despite a 17.2 percent cut in the cost of goods sold by the sugar giant to N25.56 billion, gross profit surged 22.4 percent to N12.59 billion, this could have been more if revenue, which dropped to N38.15 billion, had rebounded from its downward spree.

Sales of Nigeria’s major sugar producers came under severe pressure in 2018 owing to the persistent gridlock in and around Apapa port environment and the high rate of smuggling of cheap unlicensed sugar into the country with the Nigeria’s biggest sugar refiner getting the worst hit.

Although Dangote Sugar’s gross earnings were impacted negatively by declined revenue proceeds from the sale of 50kg sugar and molasses in the review period, it was augmented by lower cost of raw material, direct labour cost, depreciation and other overheads.

The prudent management of the company’s resources was not limited to the cost of production, it was extended to its operating activities as selling and distribution expenses were slashed by 42.7 percent to N178.3 million, while administrative expenses witnessed 2.8 percent decline to N1.58 billion in the review quarter.… Read More...