Dangote Sugar Refinery Plc has reported a pre-tax loss of N192.6 billion for the year ended December 31, 2024.
This was more than the N73.7 billion reported in the previous year, according to the company’s latest financial statement reports obtained by Investors King.
The company’s annual report, released alongside its consolidated and separate financial statements, showed the impact of rising costs, foreign exchange losses and increased finance charges on its bottom line.
The company’s revenue rose by 50.8% to N665.7 billion in 2024 from N441.5 billion in 2023, reflecting stronger sales volumes and price adjustments to mitigate inflationary pressures.
However, these gains were overshadowed by a steep increase in cost of sales, which surged by 78.7% to N634.6 billion from N355.1 billion in the previous year.
This escalation in costs compressed the gross profit to N31.1 billion, a stark contrast to the N86.3 billion recorded in 2023.
The sharp rise in the cost of sales is attributed to elevated input prices, supply chain disruptions and the impact of naira devaluation on import-dependent raw materials.
The company’s administrative expenses also rose to N18.9 billion in 2024 from N13.3 billion in the previous year, driven by higher operating costs and inflation.
Finance charges proved to be a major setback, increasing by 49.3% to N301.3 billion from N201.7 billion in 2023.
This surge was primarily due to a combination of higher borrowing costs and exchange rate fluctuations following the Central Bank of Nigeria’s unification of the foreign exchange market.
Consequently, net finance costs amounted to N293.7 billion, up from N191.1 billion in 2023.
Despite these challenges, other income saw an uptick, reaching N2.2 billion compared to N1.2 billion in the previous year, reflecting gains from sundry income sources. However, the increase was insufficient to offset the broader financial pressures.
The company’s operating profit fell sharply to N12.7 billion from N72.7 billion in 2023, underscoring the strain on core profitability.
In a bid to cushion the impact of rising costs, Dangote Sugar recorded a revaluation surplus of N432.2 billion for the year with an income tax charge of N106.6 billion on the revaluation surplus.
This resulted in a net revaluation gain of N325.6 billion, providing some relief to the company’s financial position.
Taxation for the year amounted to N78.3 billion, compared to N35.2 billion in 2023, reflecting higher deferred tax liabilities due to the revaluation adjustments. After accounting for tax, the loss for the year stood at N192.6 billion, significantly widening from the N73.7 billion loss reported in 2023.
The company’s earnings per share (EPS) deteriorated accordingly, with basic and diluted loss per share reported at N15.86 in 2024, compared to N6.07 in the prior year.
The management cited the naira’s depreciation, escalating input costs and a challenging macroeconomic environment as the primary drivers of the poor performance.
Also, the ongoing fuel subsidy removal and resultant cost pressures further strained operational margins.
