Only in the first nine months of 2020, Dangote Sugar, a company belonging to billionaire businessman Aliko Dangote, has made profit higher than what it generated in the whole of 2019.
The consumer goods firm printed a profit of N26.6 billion, up by 81.1 percent from the N14.7 billion generated the previous year. It was also up by 19.1 percent surpassing the profit of N22.4 billion made in the full year 2019, according to numbers from the company’s nine-month financials.
The increased profit in the period was largely driven by gains from “fair value adjustment biological assets”.
These biological assets the firm said comprises growing cane which is expected to be harvested as agricultural produce intended to produce sugar, the firm said.
Using an income approach, the firm raked in as much as N2.6 billion from the adjustment of these biological assets as opposed to the losses of N443.2 million and N313.5 million in both nine months 2019 and full year 2019 respectively.
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Despite the disturbing macroeconomic headwind surrounding the year caused by the pandemic that necessitated a four-month lockdown of economic activities, Dangote Sugar was able to grow revenue in the period to N160.5 billion, up by 36.7 percent from the N117.4 billion reported in the nine months last year. It is also slightly lower than the N161.1 billion recorded in the entire 2019, showing strong positive momentum for the firm.
Increased revenue was seen in all segments of the firm including the sale of 50kg sugar, sale of retail sugar, sale of molasses and in freight income.
In terms of revenue by geographical location, Lagos led with revenue of N77.2 billion, up from N54.9 billion last year. This was followed by revenue from the North which rose to N60.7 billion from N44.5 billion, while West and East came next with revenue increasing to N15.2 billion and N7.4 billion from N11 Billion and N6.97 billion respectively.
During the period, the cost of sales for the firm increased by 42.9 percent to N126.4 billion from N88.4 billion the same period last year. The cost of sales in the period was also higher than the N122.8 billion spent by the company in the whole of 2019, driven largely by the increased cost of raw materials.
Income from other sources rose to N464.7 million from N122.1 million last year, while selling and distribution expenses also fell to N496.5 million from N606.95 million.
However, the gains from increased income and declining selling and distribution expenses were largely eroded by increased administrative expenses to N6.24 billion from N5.6 billion in the nine months in 2019.
Pre-tax profit settled at N29.1 billion from N22.97 billion.
