Dangote Sugar Delivers Robust Top-Line Growth Amidst Cost Pressures in H1 2025
Dangote Sugar Refinery (DSR) has reported a remarkable top-line performance in its Consolidated and Separate Financial Statements for the half-year period ended June 30, 2025. Revenue soared to N430.2 billion for H1 2025, reflecting a substantial year-on-year growth of 45.5% from N295.6 billion in H1 2024. This impressive expansion is attributed to enhanced production volumes, improved distribution efficiency, and higher market penetration across key consumer segments. In Q2 alone, the company delivered revenue of N216.3 billion, up from N172.9 billion in the corresponding quarter of 2024 — underscoring continued operational momentum.
This revenue uptick affirms DSR’s resilient business model, driven by backward integration initiatives, expansion of refining capacity, and alignment with Nigeria’s National Sugar Master Plan (NSMP), which has enhanced its competitiveness in a challenging macroeconomic landscape.
While the topline exhibited strength, Dangote Sugar, like many in the manufacturing sector, grappled with increased input costs. The cost of sales rose sharply to N378.5 billion in H1 2025, from N277.5 billion in the prior year period, a 36.4% increase. Nevertheless, the company still managed to post a gross profit of N51.7 billion, more than doubling the N18.1 billion recorded in H1 2024.
This improvement demonstrates greater cost absorption and a better gross margin framework, indicating that the company has taken significant strides in enhancing its production efficiency and pricing power.
Operating profit followed suit, climbing to N38.1 billion in H1 2025, up significantly from N10.3 billion in the same period of 2024. This reflects operational discipline, strategic cost control at the administrative and selling levels, and gains from scale efficiencies. It is worth noting that DSR’s continuous investments in energy optimisation and logistics infrastructure have started yielding measurable returns.
However, the company’s bottom line continues to be impacted by spiraling finance costs, primarily due to a high-interest environment and increased borrowing. Finance costs surged to N65.0 billion in H1 2025, nearly tripling from N23.4 billion in H1 2024. As a result, net finance costs amounted to N62.1 billion, overshadowing the gains in operating performance.
Consequently, the company reported a loss before tax of N22.1 billion, a significant recovery compared to the N104.6 billion loss posted in H1 2024. After a tax expense of N2.2 billion, DSR declared a net loss of N24.3 billion for the period, a notable improvement from the N75 billion net loss in the same period last year.
Although earnings per share remained negative at N2.00, it marks progress from the N6.18 loss per share reported in H1 2024, signaling a gradual recovery trend for shareholders.
On the balance sheet front, Dangote Sugar remains on solid footing. As of June 30, 2025, total assets stood at N1.05 trillion, slightly higher than the N1.02 trillion reported at the end of 2024, reflecting sustained investments in capital projects and working capital.
Total liabilities increased to N838.6 billion from N778.1 billion, driven primarily by short-term borrowings and trade obligations. Despite this, shareholders’ equity improved to N212.3 billion, up from negative retained earnings in prior periods, buoyed by a substantial revaluation surplus of N325.6 billion highlighting the latent value embedded in the company’s fixed asset base.
Furthermore, Dangote Sugar maintained strong liquidity, with cash and cash equivalents of N108.2 billion as of the end of H1 2025. This healthy cash position provides a cushion against near-term volatility and supports ongoing capital projects in line with its backward integration plan.
Investor’s Outlook: BUY or ACCUMULATE
Despite the continued drag of high finance costs, Dangote Sugar’s strong operational rebound, growing revenues, and improving cost structures offer an encouraging trajectory for long-term investors. The narrowing losses and strengthening equity base indicate that the company is actively managing its debt exposure while positioning itself for profitability recovery in the near term.
At a market price of N59.70, DSR trades at a premium to its 50-day moving average of N44.24, but still hovers close to its all-time low of N54.00 — making the stock relatively attractive for medium to long-term accumulation, especially considering the substantial intrinsic value highlighted by its revaluation surplus and robust cash holdings.
In light of the robust revenue performance, asset strength, and signs of turnaround in profitability, analysts reasonably recommend a “BUY” or “ACCUMULATE” rating on DSR shares. Market repricing appears to be underway, and further upside may emerge as the company continues to optimise its financing structure and expand production under the national sugar development strategy.
Investors with a long-term horizon may find DSR’s current valuation an opportunity to position for future gains, particularly if financing costs normalise and operating leverage continues to improve. #Dangote Sugar Delivers Robust Top-Line Growth Amidst Cost Pressures in H1 2025#
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