Dangote Sugar Refinery Plc has reported 176.25 per cent increase in profit after tax to N39.78 billion in 2017 financial year from N14.40 billion reported in 2016.
The company’s profit before tax rose by 173.33 per cent to N53.60 billion from N19.61 billion in 2016 while revenue gained 20.44 per cent to N204.42 billion from N169.73 billion.
The board has recommended a final dividend of N1.25 per ordinary share, translating to the total sum of N15 billion, in addition to a payout of N6 billion interim dividend during the year bringing total dividend for the year ended December 31, 2017 to N21 billion.
The final dividend of N1.25 per ordinary share is subjected to shareholders approval.
The Acting Chief Finance Officer, Etim Bassey, in a statement said, “Early in 2017, the Nigerian economic contraction experienced in 2016 started easing and showed signs of economic recovery which continued all through the remaining part of year.
“The economy during the year under review witnessed certain positive changes which greatly impacted on the company’s operations and consequently its performance.
“Essentially, there was improved liquidity in foreign exchange market following the introduction of Investors’ and Exporters’ ( I &E) window by the Central Bank of Nigeria (CBN).
“The boost in foreign exchange was further enhanced by relative stability and increase in the global price of crude oil. There was also stability in gas supply for the latter parts of the second half of the year.
“These, however, are not to suggest that there were no challenges during the year as the company on the other hand suffered certain setbacks from the Apapa traffic gridlock which significantly impeded deliveries and curtailed production; influx of unlicensed sugar leading to loss of market share; just to mention a few.
“The increase in total revenue was principally a factor of price. Average selling price per 50 kg bag for the year was N15,636 and N10,899 for 2016. The upward price movement which started in 2016 induced by cost got stabilized in the year under review as sugar selling price became essentially market forces driven in 2017.
“Cost of raw sugar during the year rose to its peak in the 3 rd quarter and started declining thereafter by more than 20 per cent at the end of the year, a situation which resulted in overall increase in cost of material for the full year. However, the effect of the increase was partly cushioned by the stability and availability of foreign exchange.
“The price of gas increased marginally from $7.38/ mscf to $7.45/mscf at the beginning of the year.
“The price increase, combined with the instability in gas supply experienced in the first three quarter of the year pushed up the overall energy cost which explains the spike in Direct Overheads; energy cost is a major cost component in this expense head.”