Like its sister company, Nascon Allied Dangote Sugar has had a rough 2024 due to higher cost of sales and finance costs. 

Key words

FY: financial year

FY 23: January to December 2023.

9M: Nine months ( in this case January to September)

9M 2023: January to September 2023

9M 2024: January to September 2024

About the company 

Dangote Sugar Refinery Plc was incorporated as a Public Limited Liability company on 4 January 2005. It commenced operation on 1 January 2006 and was quoted on the Nigerian Stock Exchange in March 2007. 

68% of its shares are held by Dangote Industries Limited (DIL) and 32% by the Nigerian public.

 The principal activity of the group is the refining of raw sugar into edible sugar and the selling of refined sugar. Products are sold through distributors across the country.

Unfortified sugar is sold mainly to pharmaceutical, food and beverage manufacturers. Vitamin A-fortified sugar is sold to distributors who sell to small wholesalers, confectioners and other smaller value-adding enterprises who provide the distribution network to the Nigerian retail market. 

A small amount of sugar is sold directly to retail customers. Retail packaging comes in various sizes of 250g, 500g, and 1kg under the brand name “Dangote Sugar”. 

Sales to distributors account for 65% of the Group’s revenue.

Revenues went up

Year on year (9M 2024 compared to 9M 2023) revenue rose 56.4% from N309.7 billion in 2023 to N484.4 billion in 2024.

9M 2024 revenue has exceeded FY 2023 revenue.

In FY 2023, the group made ₦441 billion in revenue. 

9M 2024 revenue came in at ₦484 billion. 

Circa 96% of  revenue in 9M 2024 came from the sale of sugar in 50kg bags. That’s essentially the same as it was in 9M 2023. 

Likely FY 2024 revenue

Q1 2024 revenue was ₦122 billion.

Q2 2024 revenue was ₦172 billion

Q3 2024 was ₦188 billion

From all indications, FY 2024 revenue will exceed FY 2023 numbers. Very likely in the ₦600 billion to ₦700 billion mark

Another bitter year

FY 2024 will be another bitter year for the firm. In FY 2023, it recorded a ₦73.7 billion loss after tax.

Cost pressures 

Cost of sales rose by 89% from ₦245 billion in 9M 2023 to ₦464 billion in 9M 2024.

Sugar costs rose at a much higher pace, up 100% year on year. From ₦200.6 billion in 9M 2023 to ₦01 billion in 9M 2024.

Finance costs went up by 176% from ₦108 billion in 2023 to ₦300 billion in 2024 due to an exchange rate loss.

Geographical split 

Most of the revenue is from sales in Lagos and the North. That’s pretty much constant.

For 9M 2024, sales in Lagos accounted for ₦269billion or 55.6% of total sales.

Northern sales accounted for 32.6% or ₦158 billion of total sales. 

Rest of the revenue is from the West and East.

In terms of gross profit ( revenue minus cost of sales) the Eastern region was an outlier as it recorded a ₦17.3 million gross loss.

A dividend is unlikely 

₦117 billion in negative retained earnings means there is literally no chance of a dividend being paid. Think of this as an empty purse. You can’t pay money from an empty purse.