Dangote Sugar Refinery (DSR) Plc has reported a profit after tax (PAT) of N14.4 billion for the year ended December 31, 2016, showing an increase of 29 per cent above the N11.14 billion in 2015. According to the audited results, gross revenue rose by 68 per cent from N101.06 billion in 2015 to N169.72 billion.
Profit before tax stood at N19.61 billion, up from N16.16 billion, while PAT grew to N14.4 billion as against N11.4 billion in 2015. Earnings per share similarly rose from 93 kobo to 120 kobo. The board of directors of the company has recommended a dividend of N7.2 billion, which translates into 60 kobo per share.
Commenting on the results, acting Group Managing Director, DSR Plc, Abdullahi Sule, said: “We are very pleased with the results for the period under review, our revenue grew by 68 per cent and improve sales volume compared to 2015 despite the current macro-economic challenges. Our focus in the current year and for the future remains leveraging our strengths to maximise every opportunity to generate sales, increase our market share and create sustainable value for our stakeholders.”
He said concerted efforts are being made towards the actualisation of the company’s backward integration programmes (BIPs) plan.
“The implementation strategy has changed and the full focus is now on the expansion of the Savannah Sugar Estate to its full potential, and development of the new site at Tunga in Nasarawa State,” Sule said.
The company explained that group sugar sales volumes, was 778,518 metric tonnes (mt) in 2016, compared with 778,000 mt in 2015.
The increase in total revenue by 68 per cent over that of the previous year was predominantly driven by increase in price as just about same volume of 778,518 mt and 778,000 mt were achieved in 2016 and 2015 respectively. Several price increases caused by increased materials, operating and financial costs occurred during the year,” it said.
According to DSR, unfortunately, these price increases did not translate to higher returns in gross margin as overall costs increased by even a higher percentage.
“Our major cost of sales driver which is the raw sugar rose by 97 per cent through the combined effect of price and exchange rate increase. The Naira was stable at N197-N199 at the early part of the year but jumped to a closing average figure of about N400 (official N305.5, Parallel N495) with a direct adverse impact on our raw material cost,” DSR added.