Dangote Sugar Refinery (DSR) Plc has reported improved results for the year ended 2017 and recommended higher dividends for shareholders.
Two other members of the Dangote Group, Dangote Cement Plc and NASCON Allied Plc had earlier announced their results that showed higher performance compared to the previous year.
Last week, DSR unveiled its audited results, showing growth in performance indicators and recommended higher final dividend.
DSR reported a revenue of N204.42 billion in 2017, up 20.4 per cent above the N169.72 billion recorded in 2016. Profit before tax jumped by 173.3 per cent to N53.6 billion, from N19.61 billion, while profit after tax grew fast by 176 per cent to N39.78 billion as against N14.4 billion in 2016.
Given the impressive performance, the board of directors recommended a final dividend of 125 kobo in addition to the 50 kobo interim paid last year. This will bring the total dividend for the year to 175 kobo per share compared with 60 kobo paid the previous year.
Commenting on the results, the Acting Group Managing Director, DSR, Abdullahi Sule said: â€œWe are very pleased with the 2017 business year, with an increased revenue growth of being 20.4 per cent and gross profit increase of 121.8 per cent, the best recorded in the history of the company. Our focus for 2018 remains the actualisation of our Backward Integration Projects (BIPs) with focus on the achievement of 1.080M MT sugar from our BIP sites in the next six years.
Concerted efforts are being made to leverage our strengths and maximise every opportunity to increase our market share and create sustainable value for all stakeholders.â€
The company said the increase in direct overheads was mainly driven by our production cost, which was driven by increased energy cost. The price of gas increased marginally from $7.38/mscf to $7.45/mscf, combined with the instability in gas supply during the first three quarters, pushed up the overall energy cost for 2017.
â€œThis led to the use of LPFO at a higher price against budget. Our actual average price for the year under review was N143/litre against budgeted price of N100/litre. Investments made in respect of the various BIPsack were funded from DSRâ€™s internal resources. The group liquidity position improved from N35billion to N41billion as at December 31, 2017. In line with our liquidity management policy the excess funds were placed on short term fixed deposit to earn investment income.
In addition, N13.0billion was deposited with the CBN for FX forward contract payable to foreign trade creditors at maturity. This sum is treated as other financial assets under the broad class of other assets in the statement of financial position,â€ DSR explained.