A major subsidiary of the Dangote Group, Dangote Sugar Refinery (DSR) Plc, has declared a profit of N11.6billion in the first half of the year 2020.
This was reported to be slightly higher than the N10.9billion profit it generated year-in-year, 2019.
Notable for announcing profit consistently, DSR improved its revenue by 28.8% to N103billion for first half of 2020 from N80 billion in the corresponding period of 2019.
On July 11, 2020, the company finalised plans to merge with Savannah Sugar Company Limited, in what was described a sign of weariness as it.
Revenue, however, Â climbed steadily as well in Q2, as it generated N8 billion higher than the N47.6 billion generated in Q1.
DSR major turnover, following the analysis of revenue, comes from Lagos; one of its 4 segments.
Lagos provided 48.5% of revenuegenerated in 2020 while the other three segments (North, West and East) had a combined 51.5%; a similar trend to 2019 where 48.1% of the N80billion generated as revenue in the state.
Following the the establishment of DSR as a private liability company in March 2000 with its first refinery plant commissioned a year later in Apapa, Lagos has served as hub for DSR’s operations.
Meanwhile, the aspect of cost has been very worrisome for DSR. Its cost to revenue for 2020 HY is worse off than in 2019. In 2020, cost of sales constitutes 80% of revenue generated with the number pegged at N82.4 billion as opposed to its corresponding HY 2019 where cost of sales amounted to N57.3billion, 73.8% of revenue.
The sad pattern of increasing costs is noticed yet again between Q1 and Q2 2020 when cost to sales ratio moved from 73.3% to 85.4% between both quarters.
The company presents a very healthy statement of financial position showing total assets of N229billion and total liabilities of N104billion.
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In addition, it has no major borrowings in its books besides the N2 billion obtained from Zenith Bank in 2016 for a 10-year period and at interest of 9%.
Current ratio as at HY 2020 is 1.3:1, with earnings per share appreciating by 5.5% to stand at 97kobo.
Net cash obtained from operating activities notably showed an 87% increase from N5.9billion in HY2019 to N46billion in 2020.
In the meantime, the consumer goods sector seemingly faces very mild reactions from its consumer and their demand pattern in this COVID-19 era unlike other industries.
Revenue on the contrary continues to soar. The outlook for the remaining quarters of the year looks positive and quite promising for Dangote Sugar if proper attention is paid to the rising costs.
