Dangote Sugar Refinery Plc (DSR), a prominent entity in Nigeria’s sugar industry, has released its financial statements for the year ending December 31, 2024. The reports indicate a challenging fiscal period, characterized by substantial losses despite notable revenue growth.

Financial Performance Overview

Loss After Tax

The company reported a loss after tax of N192.6 billion for 2024, marking a 161% increase from the N73.76 billion loss recorded in 2023. ​

Revenue and Cost of Sales

Despite achieving a 51% increase in revenue, rising to N665.69 billion from N441.45 billion in the previous year, the company’s cost of sales surged by 78% to N634.58 billion from N355.15 billion. This disproportionate increase in costs significantly eroded profitability, resulting in a gross profit decline of 64%, dropping to N31.11 billion from N86.3 billion in 2023. ​

Finance Costs

The financial burden was further exacerbated by escalating finance costs, which soared by 54% to N301.28 billion in 2024, up from N201.66 billion in the prior year. These rising expenses contributed to a widened loss before tax of N270.89 billion, compared to N108.92 billion in 2023. ​

Balance Sheet Analysis

Total Assets

On a positive note, DSR’s total assets experienced a significant increase, rising by 75% to N1.05 trillion in 2024 from N600.79 billion in 2023. This growth was primarily driven by a surge in property, plant, and equipment, which grew to N616.64 billion from N167.08 billion. ​

Total Liabilities

Conversely, total liabilities escalated by 61%, reaching N838.61 billion in 2024, up from N521.54 billion in the previous year. This increase was mainly attributed to a significant rise in financial liabilities. ​

Revaluation Surplus and Comprehensive Income

The company recorded a revaluation surplus of N432.17 billion, which positively impacted its total comprehensive income, bringing it to N132.98 billion. This is a notable turnaround from the comprehensive loss of N73.76 billion reported in 2023. ​

Debt Financing Initiatives

In response to these financial challenges, DSR has initiated efforts to bolster its working capital and support operational funding needs. The company has launched an offering to raise N50 billion from debt capital market investors through the issuance of Series 6 and Series 7 commercial papers under its N150 billion debt programme.

Conclusion

Dangote Sugar Refinery Plc’s financial performance in 2024 underscores the challenges posed by rising operational costs and finance expenses, which have significantly impacted profitability despite revenue growth. The company’s proactive measures, including asset revaluation and debt financing initiatives, aim to stabilize its financial position and support future operations. Stakeholders will be keenly observing the effectiveness of these strategies in the forthcoming fiscal periods.