Dangote Sugar Net Loss Grows by 161% to N192.6bn
Dangote Sugar Refinery Plc net loss from continuing operation grew by more than 161% year on year to settle at N192.62 billion from N73.76 billion, details from 2024 audited report showed.
The significant earnings loss posted by the sugar refinery company was primarily due to rising production costs and high foreign exchange losses. The strong revenue performance was swept under the carpet as costs accelerated much faster.
In 2024, Dangote Sugar revenue grew by 50.8% year on year, driven by price increases across its product range, with Sugar-50kg up 51.0%, Sugar-retail up 52.3%, and Molasses up 81.9%, according to CardinalStone Securities Limited.
However, production costs surged by 78.7%, mainly due to an 84.5% rise in raw material expenses, compressing the gross margin to 4.7% from 19.5% in 2023.
Principal earnings breaker for the company was its elevated net finance costs, stemming from exchange loss on letters of credit in the period.
Dangote Sugar reported a 53.7% increase in net finance cost as finance costs rose by 49.4%, driven by a 21.3% jump in foreign exchange losses to N208.90 billion and an 81.7% increase in letters of credit to N53.02 billion.
Meanwhile, finance income declined by 27.9% to N7.61 billion due to lower interest earnings on bank deposits. Operating expenses increased by 41.8%, reflecting a rise in administrative and distribution costs, leading operating margin to contract to 1.9% from 16.5%.
The company recorded a pre-tax loss of N270.89 billion, up by 148.5% year on year from N108.9 billion pretax loss in 2023. With a tax credit of N78.28 billion, loss after tax came in at N192.62 billion, up by 161.1% year on year from N73.76 billion net loss posted in 2023.
Analysts said the company’s performance in the year highlighted the negative impact of the naira depreciation and highly inflationary environment.
Market Reaction
Dangote Sugar Refinery Plc (Ticker: DANGSUGAR) market value plunged by 10% as investors rushed for the door following a huge year on year growth in net loss.
The sell pressure has continued in the market during early trading hours on Wednesday in the stock market. The downbeat investors’ sentiments has seen the company losing 4.17% on Wednesday, according to live data obtained from the Nigerian Exchange. #Dangote Sugar Net Loss Grows by 161% to N192.6bn#
AIICO Insurance Declines Amidst Strong Trading Activity, Price Volatility
