Dangote Sugar Refinery improved its performance indices for the half year ended June 30, 2021, as the group revenues increased by 27.8 per cent to N131.95 billion in contrast to N103.23 billion recorded for the same period in the preceding year.
According to the refinery’s unaudited results for the period, gross profit grew double digit at 37.3 per cent to N28.59 billion compared to N20.82 billion in the preceding year due to better topline performance.
Group sales volume increased to 388,589 tonnes while production volume also increased by 7.6 per cent to 403,846 tonnes driven by operations optimisation drive.
The company also reported double-digit increase in profit before tax in the period under review to N18.755 billion from N17.044 billion reported in H1 2020.
The unaudited report shows that the company paid a tax of N6.15 billion in H1 2021 up from N5.46 billion in H1 2020 and this dragged profit after tax to N12.605 billion, which was still 9.53 per cent higher than the N11.508 billion reported in H1 2020.
Total assets of the company also grew to N283.87 billion as at June 30, 2021 from N278 billion reported in full year ended December 31, 2020, and this was driven by growth in trade and other receivables.
According to the report, trade and other receivables closed H1 2021 at N48.64billion from N36.07billion in H1 2020.
The breakdown of total assets revealed that long-term assets rose by 14.3 per cent to N116.26 billion in the period under review from N101.73 billion reported in H1 2020 while current assets dropped by nearly five per cent to N167.6 billion as at June 30, 2021 from N176.3billion reported in 2020 full year results.
Meanwhile, total liabilities of Dangote sugar refinery was N164.78 billion as at June 30, 2021, an increase of 7.5 per cent from N153.32 billion in 2020, while the company’s total equity dropped by 4.5 per cent to N119.1 billion as at June 30, 2021 from N124.7 billion reported in 2020.
On the company’s results, Cordros Securities Limited said: “We like that the company has maintained its double-digit topline growth trajectory for eight consecutive quarters despite implementing a substantial price increase. In addition, we note that the reopening of land borders did not affect the company’s sales volume adversely, which implies a limited influx of unlicensed sugar into the country.
“However, the persistent increase in operating and finance cost remains a concern. Nevertheless, over the rest of 2021 full year, we believe the company will maintain positive performance given its market leadership position and substantial progress in its backward integration programme despite renewed competition in the sugar industry.”
Speaking on the company’s half year 2021 performance, the group managing director/CEO, Ravindra Singhvi said: “we commenced the year on a strong footing with impressive performance in first half as the financial results have shown, with a stronger Q1 topline growth and a robust Q2 topline growth year on year.
“During the period under review, we launched our new packaging designs for the 50kg fortified and non-fortified sugar bags with the theme ‘Dangote Sugar has a new look, Same Great Quality’. The theme reaffirms the quality of our product and inspires a deeper connection to the Dangote Sugar brand among our valued customers and consumers, whilst refreshing our market presence as the leading sugar brand in Nigeria.”
He added that, “as part of our supply chain management sustainability journey, we continued to enhance our out-growers scheme. The technical and agriculture support provided for them over time has led to the improved yield from our Outgrowers sugarcane farms at the Numan Sugar Estate. This effort will be sustained to ensure the socioeconomic growth of our immediate communities and improved sugar cane supply for production.
“The team is committed to navigating the second half of the year, keeping the health and safety of our people and partners as top priority. Our Refinery in Apapa and backward integration operations in Numan, Adamawa state and Tunga, Nasarawa state continue to operate in compliance with our health and safety protocols while ensuring our commitment to the environment and sustainable business practices are maintained.”
He stated that the recurrent challenges with Apapa traffic gridlock persisted during the first half of the year but expressed optimism that the truck call up system will address the situation.
On achievement of the Dangote Sugar Backward Integration Projects targets, he added that, “this remains our focus. We are resolute and will continue in our quest to put Nigeria on the path of sugar self-sufficiency and on the world sugar map.”
Speaking at the company’s 15th annual general meeting (AGM) held in Lagos, the chairman of Dangote Sugar Refinery, Aliko Dangote, said, allowing for distortions in the sugar masterplan framework will adversely affect the target of the nation attaining self-sufficiency as projected.
He described the backward integration policy as commendable which will not only reduce imports of raw sugar but save the nation from using enormous foreign exchange for importation.
He stated that the backward integration policy of Dangote Sugar Refinery was recording appreciable progress even as he declared the company’s irrevocable commitment to the policy.
Dangote Sugar Refinery is Nigeria’s largest producer of household and commercial sugar with 1.44M MT refining capacity at the same location. The refinery located at Apapa Wharf Ports Complex, refines raw sugar imported from Brazil to white, Vitamin A fortified refined granulated white sugar suitable for household and industrial uses.
It has the Backward Integration goal of becoming a global force in sugar production, by producing 1.5M MT/PA of refined sugar from locally grown sugar cane for the domestic and export markets.
To achieve this, Dangote Sugar Refinery Plc acquired DSR Numan Operations (Savannah Sugar Company Limited), located in Numan, Adamawa State in December 2012, and embarked on the ongoing rehabilitation of its facilities and expansion of its 32,000 hectares’ sugarcane estate. In September 2020, the scheme of merger between DSR and Savannah Sugar Company Limited was completed which gave birth to a bigger and stronger business with considerable opportunity for growth and delivery of superior benefits to all stakeholders. The expansion of the sugar estate is still ongoing as well as the development of the greenfield site acquired at Tunga, Nasarawa State for the achievement of DSR’s sugar for Nigeria development master plan.
The Nasarawa Sugar Company Limited is the registered subsidiary of Dangote Sugar Refinery Plc. The 78,136 hectares Sugar Project site is located at Tunga, Awe local government Area, of Nasarawa state. Massive development in agriculture, irrigation infrastructure amongst others is ongoing at the site.