Dangote Sugar Refinery Plc has disclosed a significant financial setback, reporting a loss before tax of N108.92 billion for the fiscal year 2023. This marks a stark contrast from the pre-tax profit of N82.3 billion recorded in the previous year.
The company attributes these losses primarily to the substantial devaluation of the naira, which has severely impacted the operating profits of many manufacturing firms across the nation. 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, effectively wiping out its operating profit of N76.68 billion.
As a result, shareholders’ funds took a significant hit, depleting by 53% from N171.2 billion to N79.2 billion.
Key highlights from the financial report include:
– Revenue increased to N441.453 billion from N403.246 billion in 2022, reflecting a 9.47% year-on-year growth.
– Gross profit decreased to N86.304 billion from N91.963 billion in 2022, marking a 6.15% decline year-on-year.
– Operating profit saw a notable decrease to N76.68 billion from N82.41 billion in 2022, representing an 11.8% year-on-year reduction.
– The company reported a significant loss after tax of -N73.760 billion, a stark contrast from the profit of N54.742 billion recorded in 2022. This indicates a staggering 234.74% year-on-year decline.
– Loss per share (EPS) stood at -N6.07k compared to N4.51k in 2022, reflecting a 234.59% year-on-year decrease.
In response to these challenges, Dangote Sugar has implemented robust margin management and cost management initiatives to address forex volatility and cost inflation. Additionally, the company has highlighted the positive returns from its Numan operations and intends to accelerate backward integration efforts. It is also reviewing other specific actions aimed at enhancing overall operational efficiency and profitability.
These measures are crucial for restoring deteriorating investor confidence, as reflected in the marginal 5.2% year-to-date share price increase. Despite this, in 2023, the company’s share price witnessed a remarkable gain of 255%.
