Dangote Sugar Refineries Plc has surmounted the headwinds caused by the coronavirus pandemic and a difficult business environment as Lagos State makes up the chunk of revenue.
For the year ended December 2020, the company’s net income spiked by 33.33 percent to N29.77 billion from N22.36 billion the previous year.
Revenue spiked by 31.65 percent to N214.29 billion in the period under review as against N161.08 billion the previous year.
A breakdown of the top line figure shows the consumer goods giant generated N104.16 billion revenue from Lagos State, which is 48.93 percent of Group sales; it realized N79.25 billion, that’s 36.98 percent, and raked in 20.34 percent (N20.34 billion) from the West.
Notably, the Eastern region was the laggard as it contributed a mere N9.82 billion to Group sales.
The company’s revenues are growing faster than the rate of acceleration in input costs as gross profit margin increased to 25.07 percent in the period under review from 23.76 percent the previous year, according to MoneyCentral Calculations.
Analysts say the closure of the land borders to curb smuggling and influx of cheap and substandard materials into the country (though reopened) was a boon for the producer of the sweetener because many competitors were forced to patronize its products.
A few years ago, Dangote Sugar had complained that smuggling was undermining its earnings because its products were competing with cheap goods from neighboring African countries and Asian countries.
The biggest grower of the sweetener has intensified its expansion strategy with a view to galvanizing its backward integration plan to revolutionise the sugar sub sector of the Nigerian economy.
To enhance the local production of home-grown material for sugar producing rather than importing same from abroad, the company had acquired Savanah Sugar Limited and the court had consummated the deal.