Dangote Sugar incurs N172 billion in forex losses, ends 2023 with N108.9 billion loss

Dangote Sugar incurs N172 billion in forex losses, ends 2023 with N108.9 billion loss

Dangote Sugar Refinery Plc has reported a loss before tax of N108.92 billion compared to a pre-tax profit of N82.3 billion a year earlier.  

The company attributes these losses primarily to the substantial devaluation of the naira which has mostly eroded the operating profits of most manufacturing companies in the country.  

According to the notes accompanying the company’s recently released 2023 annual report and financial statements, Dangote Sugar incurred foreign exchange losses totaling N172.198 billion.

This wiped out its operating profit of N76.68 billion.

The losses resulted in a 53% depletion of shareholders’ funds from N171.2 billion to N79.2 billion. 

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Key highlights  

• Revenue: N441.453 billion from N403.246 billion in 2022, +9.47% YoY
• Gross profit: N86.304 billion from N91.963 billion in 2022, -6.15% YoY
• Operating profit: N76.68 billion from N82.41 billion in 2022, -11.8% YoY
• (Loss)/Profit after tax: -N73.760 billion from N54.742 billion in 2022, -234.74% YoY.
• (Loss)/EPS: -N6.07k from N4.51k in 2022, -234.59% YoY

Insights: The company further communicated that it has taken robust margin management and cost management initiatives to address the significant forex volatility and cost inflation.  

• It has also highlighted the positive returns from its Numan operations, its intention to accelerate backward integration efforts, and the review of other specific actions aimed at enhancing overall operational efficiency and profitability.

These are very commendable and needed to restore the deteriorating investor confidence as reflected in the share price marginal 5.2% YtD.  In 2023, the share price gained 255%.

Dangote Sugar incurs N172 billion in forex losses, ends 2023 with N108.9 billion loss