In an indication that the manufacturing industry in the country is going through severe foreign exchange pressure, Dangote Sugar Refinery recorded its first loss in 13 years.
A growing number of manufacturers including Guinness Nigeria Plc, International Breweries Plc, PZ Cussons Nigeria Plc, Nigeria Breweries Plc and Cadbury Nigeria Plc have also reported losses for last year due to severe forex pressures.
Dangote Sugar Refinery reported a loss before tax of N108.92 billion compared to a pre-tax profit of N82.3 billion a year earlier.
It also posted a loss after-tax of N73.8 billion in 2023 compared to a profit of N54.7 billion in the previous year.
The company attributes these losses primarily to the substantial devaluation of the naira which has mostly eroded the operating profits of most manufacturing companies in the country.
According to the notes accompanying the company’s recently released 2023 annual report and financial statements, Dangote Sugar incurred foreign exchange losses totaling N172.198 billion.
This wiped out its operating profit of N76.68 billion.
The losses resulted in a 53 per cent depletion of shareholders’ funds from N171.2 billion to N79.2 billion.
Further analysis of the statement shows that Dangote Sugar’s cost of sales rose to N355.1 billion from N311.3 billion while its revenue grew to N441.5 billion from N403.2 billion.
Revenue from the sale of 50kg of sugar rose to N426.4 billion from N390.9 billion and revenue from the sale of retail sugar increased to N11.46 billion from N7.89 billion.
Revenue from the sale of molasses increased to N2.29 billion from N2.15 billion.
“Dangote Sugar’s subpar performance underscores its sloppy operation and poor sales turnover in the year, further exacerbated by broader operational challenges, including escalating inflation, currency devaluation, and constrained consumer wallet,” analysts at Cordros Research said in a note.
