July 31, 2026/Cordros Report
Dangote Sugar Refinery Plc (DANGSUGAR) released its unaudited Q2-26 results on 30 July, reporting EPS of NGN1.84, compared with a loss per share of NGN0.05 in Q2-25, bringing H1-26 EPS to NGN3.42 versus a loss per share of NGN2.00 in H1-25. The return to profitability was driven primarily by stronger operating leverage, reflected in a 526bps y/y expansion in gross margin and a 905bps y/y improvement in EBITDA margin, with a 40.3% y/y decline in net finance costs providing additional support to earnings.
DANGSUGAR recorded a 5.6% y/y decline in revenue (H1-26: -8.9% y/y), reflecting a weaker-than-expected recovery in domestic sugar demand as the benefits from prior pricing actions continued to fade. The decline was driven almost entirely by the core 50kg sugar business, which contributed 97.7% of group revenue and recorded a 4.7% y/y decline in sales (H1-26: -8.5% y/y). Meanwhile, the Retail sugar and Molasses segments remained under pressure, with revenue declining 32.2% y/y and 39.0% y/y, respectively, although together they accounted for just 2.2% of group revenue and had a limited impact on overall performance. Sequentially, revenue increased 8.6% q/q, driven almost entirely by a 9.5% q/q increase in 50kg sugar sales, which accounted for 97.7% of Q2 revenue. The sequential improvement more than offset weaker Retail (-21.0% q/q) and Molasses (-12.6% q/q) sales, suggesting a modest recovery in the group’s core business.
Gross margin expanded by 526bps y/y to 24.9% (H1-26: +11.94ppts to 24.0%), as the 11.8% y/y decline in cost of sales outpaced the 5.6% y/y decline in revenue. Consequently, EBIT and EBITDA margins improved by 631bps y/y and 905bps y/y to 22.7% and 28.6%, respectively (H1-26: +14.62ppts and +17.52ppts to 23.5% and 29.5%), reflecting a meaningful improvement in operating leverage, supported by broadly contained operating expense growth (+8.0% y/y).
Net finance costs declined by 40.3% y/y to NGN20.68 billion (H1-26: -23.6% y/y), driven by a 37.4% y/y reduction in finance costs. The improvement reflected lower financing requirements, evidenced by a 53.1% y/y decline in letter of credit charges and a 48.9% y/y reduction in overdraft interest expense, supported by stronger operating cash generation.
Consequently, profit before tax rebounded to NGN23.40 billion in Q2-26 from NGN1.04 billion in Q2-25, bringing H1-26 PBT to NGN44.09 billion versus a loss before tax of NGN21.60 billion in H1-25. Accordingly, profit after tax improved to NGN22.36 billion from a loss of NGN0.11 billion in Q2-25, with H1-26 PAT reaching NGN41.51 billion compared with a loss of NGN23.76 billion in H1-25.
Comment: DANGSUGAR delivered a strong recovery in profitability in Q2-26, as improved operating leverage and lower financing costs more than offset continued topline weakness. Looking ahead, with the benefits of prior pricing actions continuing to fade, we expect earnings growth to become increasingly volume-driven, while sustained cost discipline and stronger operating cash generation should support margin resilience. Our estimates are under review.
