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Dangote Sugar Refinery, a leading integrated sugar business controlled by Africa’s richest man Aliko Dangote, swung to a first-quarter loss of N68.99 billion ($49.6 million) in its 2024 fiscal year, despite a significant double-digit percentage increase in revenue.
The sugar producer, which recently suspended merger plans with Nascon Allied Industries and Dangote Rice, recorded a hefty loss in the first three months of 2024 compared to a profit of N12.8 billion ($9.2 million) in the prior-year quarter. This comes even as company revenue surged.
Dangote sugar hit by FX loss
Dangote Sugar’s first-quarter 2024 revenue jumped 20 percent, rising from N102.22 billion ($73.4 million) to N122.73 billion ($88.17 million).
The increase stemmed from a surge in bulk sugar sales, which grew from N96.67 billion ($69.4 million) to N116.94 billion ($84 million). Revenue from retail sugar sales also climbed, from N2.3 billion ($1.65 million) to N4.2 billion ($3.02 million) during the period.
However, despite the revenue growth, Dangote Sugar’s N68.99 billion ($49.6 million) first-quarter 2024 loss stemmed primarily from a N102.98 billion ($74 million) foreign exchange loss incurred during normal business operations.
This loss is attributed to the depreciation of the naira, which led to a significant unrealized exchange loss of N94.08 billion ($67.6 million) in the first quarter of 2024.
Dangote Sugar: Dangote’s $246-million stake
Dangote Sugar Refinery is a subsidiary of Dangote Group, a Nigeria-based multinational conglomerate with a diversified and fully integrated industrial portfolio that includes cement plants, fertilizer plants, sugar refineries, and petrochemical refineries.
The leading sugar company boasts a refining capacity of 1.44 million metric tonnes, making it Nigeria’s largest household and commercial sugar producer.
It is 72.7-percent owned by Aliko Dangote, Africa’s richest man with a net worth of $15.3 billion, according to the Bloomberg Billionaires Index. The market value of Dangote’s stake in Dangote Sugar Refinery is currently estimated at $246 million.
Dangote Sugar records loss
While Dangote Sugar swung to a N68.99 billion ($49.6 million) loss in the first quarter of 2024, the company’s total assets increased from N600.8 billion ($431.6 million) as of Dec. 31, 2023, to N617.85 billion ($444 million) as of March 31, 2024.
However, retained earnings of N66.88 billion ($48.6 million) as of Dec. 31, 2023, reversed into a retained loss of N2.1 billion ($1.5 million) for the Dangote-led sugar business.
