October 31, 2023/CSL Research
Despite inflationary pressures, in its 9M earnings results, Dangote Sugar Plc’s (DANGSUGAR) Revenue was largely driven by accretion in its sales of sugar (50kg), sugar (retails) and molasses to N298bn (+6.6% y/y), N8.51bn (+54.3% y/y) and N1.96bn (+14.3% y/y) respectively while its Freight Income declined by 23.0% y/y to N1.2bn in the period. Consequently, Dangsugar’s total Revenue rose by 7.4% y/y to N309.71bn in 9M 2023 from N288.32bn in 9M 2022. Quarterly, the company’s Revenue advanced by 6.3% q/q to N106.93bn in Q3 2023 from N100.60bn in Q2 2023.
The Company’s Cost of Sales (ex-Depreciation) grew 6.9% y/y to N240.52bn in 9M 2023 from N225.05bn in 9M 2022 resulting in its Gross Profit closing the period at N69.20bn (+9.4% y/y) from N63.22bn in 9M 2022. Consequently, its Gross profit margin rose by 0.4ppts to 22.3% (vs a Gross profit margin of 21.9% in 9M 2022). Meanwhile, Dangsugar’s Selling and Distribution Expense waned by 24.1% y/y to N1.05bn while its Administrative Expenses rose by N7.61bn in 9M 2023. Thus, the company’s OPEX margin was 2.1% in 9M 2023 from 1.4% in 9M 2022.
The Depreciation and Amortisation of the company’s real assets waned by 22.3% y/y to N7.57bn from N9.73bn in Q3 2022. The company’s Other Income surged to N1.01bn from N363m in 9M 2022 while its Earnings Before Tax (EBIT) advanced by 16.7% y/y to N60.15bn in 9M 2023 from N51.56bn in 9M 2022. The growth in the company’s EBIT was largely due to the increase in its fair value adjustment to N4.01bn (+137.2% y/y) from N1.69bn in 9M 2022.
The company’s Net Finance Cost was up significantly to N101.48bn in 9M 2023 from N9.80bn in 9M 2022 as its Finance Expense grew to N108.72bn in 9M 2023 from N9.80bn due to the FX revaluation losses on its financial liabilities in the period. However, the Dangsugar recorded Finance Income of N7.25bn in 9M 2023 (+96.7% y/y from N3.68bn in 9M 2022). Consequently, Dangsugar reported a Loss Before Tax of N41.33bn (-213.9% y/y) and a Loss After Tax of N27.03bn (-208.8% y/y) in 9M 2023 (inclusive of a N14.30bn Tax credit).
DANGSUGAR 9M 2023
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Source: Company’s Financials, CSL Research
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Dangsugar 9M 2023 Quick Take.pdf
