Dangote Sugar Refinery’s profit after tax swings upward by 148 percent to N54.74 billion in the full year of 2022 from N22.05 billion in 2021 on the back of increased sales and finance income.
The increase in profit resulted in a profit margin of 13.58 percent in the full year of 2022, indicating a 559 basis points increase from 7.99 percent in the full year of 2021.
The sugar producer reported revenue growth of 46 percent to N403.25 billion in the full year of 2022 from N276.1 billion in the same period of 2021.
“Top-line performance primarily reflected a 45.3 percent year-on-year sales growth in the 50kg segment, constituting 97.0 percent of the company’s revenue,” analysts at CardinalStone said in a note.
CardinalStone report stated that “This strong top-line growth was mainly attributed to the 39.1 percent year-on-year increase in the price of the 50kg product to N32,000. Further down, the combined effect of operational efficiency (evinced by a 4.2 percent decline in OPEX) and the passthrough of the buoyant sales resulted in an operating profit margin expansion of 6.3 ppts to 20.4 percent.
“Interestingly, DANGSUGAR bucked the trend of net FX-related losses to record a net foreign exchange gain of N12.4 billion in Q4’22. This, alongside an increase in finance income driven by higher bank deposit interest rates (5.9 percent in FY’22 vs 3.5 percent in FY’21), led to a 34.3 percent slump in FY’22 net finance cost and an 8.1 ppt expansion in PBT margin, consequently,” CardinalStone said.
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The firm’s finance income climbed 84 percent to N6.38 billion in December 2022 from N1.42 billion in December 2021.
“Dangote Sugar Refinery Plc reported a 148.2 percent year-on-year surge in profit after tax to N54.7 billion. The earnings growth mirrored a 46.1 percent year-on-year increase in sales to N403.2 billion, operational efficiency, net foreign exchange gain, and a 4.5x YoY spike in finance income,” CardinalStone said in a report.
Dangote Sugar’s cost of sales stood at N311.3 billion in December 2022, up 38 percent from N225.8 billion in December 2021. The firm cost of sales took out 77 percent of Dangote Sugar’s revenue in the reviewed period.
The firm’s gross profit stood at N91.96 billion in December 2022, an 83 percent increase from N50.21 billion in December 2021 which resulted in a gross profit margin of N22.81 percent, 462 basis points increase from N18.19 percent in the reviewed period.
Dangote Sugar’s operating profit grew to N82.35 billion, up 136 percent from N39 billion, with an operating profit margin of 20.42 percent from 14.13 percent which indicates 629 basis points increase.
Net cash generated from operating activities dipped 17.6 percent to N105.39 billion in 2022 from N127.83 billion in 2021.
Net cash used in investing activities recorded a negative of N19.57 billion from N49.87 billion negative cash flow while net cash used in financing activities totaled N-13.97 billion in 2022 from N-19.8 billion in 2021.
Cash and cash equivalent grew 70 percent to N174.86 billion from N103 billion on the back of Short term deposits which stood at N151.7 billion in December 2022.
The proposed dividend for the full year of 2022 was N1.50 per ordinary share of 50kobo from the profit.
