Dangote Sugar Refinery Plc, Nigeria’s leading producer of sugar, has announced its first annual loss in the wake of the ongoing devaluation of the naira.
The company, spearheaded by Aliko Dangote, Africa’s wealthiest person, reported a net loss of N73.8 billion ($47.7 million) for the fiscal year 2023, a contrast to the N54.7 billion profit registered in the previous year.
The annual report disclosed through regulatory filings on Monday revealed a 9.5% increase in revenue to N441.45 billion.
Despite the revenue uptick, the company’s bottom line suffered from amplified finance and input costs triggered by the currency devaluation.
Nigeria’s ongoing currency crisis, stemming from a scarcity of dollars, has reverberated across various sectors, with companies like Nestle Nigeria Plc also reporting losses and others opting to exit the nation’s market altogether.
MTN Group Ltd., the continent’s largest wireless service provider, recently revealed that the drastic 49% depreciation of the naira against the dollar severely impacted its profitability last year.
Dangote Sugar attributed its financial woes to challenges in sourcing sufficient foreign currencies from official markets, resulting in operational slowdowns.
Furthermore, the company’s finance costs surged more than twentyfold to 201.7 billion naira due to the conversion of foreign-currency obligations at a weaker naira.
Following the earnings announcement, Dangote Sugar’s shares plummeted by as much as the 10% limit, indicating investor apprehension and reflecting the gravity of the situation.
As Nigeria grapples with its currency crisis, Dangote Sugar’s loss underscores the broader economic challenges facing the nation’s corporate landscape.
