Dangote Sugar grows 9-month N27bn profit by 81 percent

Alexander Davis | ConsumerConnect

Dangote Sugar Refinery (DSR) Plc has grown its Profit After Tax (PAT) for the nine months ended September 30, 2020, by 81 percent.

The company indicates it is giving shareholders a reason to salivate ahead of the end of this financial year.

ConsumerConnect reports details of the results indicated that DSR posted a revenue of N160.514 billion, indicating 36.6 percent increase from N117.425 billion in the corresponding period of 2019.

Whereas the selling and distribution expenses declined from N606 million to N496 million, administrative expenses rose from N5.631 billion toN6.235 billion in 2020.

Financing expenses also soared to N1.948 billion, compared with N85 million in 2019.

Profit Before Tax (PBT) as well grew by 26.9 percent to N29.1 billion in2020, up from N22.968 billion.

A lower tax payment enhanced the profit after tax to grew faster at 81.1 percent to N26.629 billion as against N14.703billion recorded in 2019.

It is recalled that DSR last July formally took over Savannah Sugar Company Limited (SSCL) with a view to boosting production capacity and widening the company’s market share.

The merger of the two firms to become sub-Saharan Africa’s largest sugar refining supported the company’s backward integration plan to revolutionise the sugar sub-sector of the nation’s economy.

Alhaji Aliko Dangote, Chairman of DSR, disclosed the company would be leveraging SSCL’s sugarcane plantation to enhance its production capacity.

The Chairman stated that SSCL has 32,000 hectares of land available for cultivation of sugar cane, and milling capacity of 50,000 tonnes of sugar per annum.

Dangote disclosed that following the merger, further investments would be made to expand the SSCL land under cultivation.

He also explained that the DSR Board of Directors considered the merger as fair and reasonable and believed that it would provide strategic opportunities and benefits for the company, employees and other stakeholders as the new company would be operating from the position of increased access to capital and then higher profitability.

According to him, some of the benefits of the merger as being to consolidate the assets, intellectual property rights, operations, and business dealings of the SSCL into the DSR, and eliminate cost inefficiencies arising from duplication of resources and processes.

Others are to improve the efficiency through more focused management of resources and position it as the biggest integrated sugar producer in Nigeria.

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