Table of Contents
Key Points:
- Dangote Sugar Refinery reported an $86-million loss in the first half of 2024, driven by significant foreign exchange losses.
- The company’s pretax loss surged to N211.4 billion ($127.3 million) despite a 46% increase in revenue.
- Despite revenue growth to $178 million, Dangote Sugar’s pretax loss reached $127.3 million, reflecting the impact of the naira’s depreciation.
Dangote Sugar Refinery, a leading integrated sugar business majority-owned by Nigerian billionaire Aliko Dangote, suffered a loss of more than $86 million in the first half of 2024.
The company’s retained loss totaled N77.1 billion ($46.4 million) as of June 30, 2024, turning the sugar business into a loss-making venture.
According to the group’s recently published financial statement, the loss deepened to N144 billion ($86.7 million) in the first half of 2024, compared to a total loss of N28 billion ($16.9 million) recorded in the first half of 2023.
Currency losses erase revenue gains
The $86-million loss in the first six months of 2024 was linked directly to finance costs during the period, which surged to N234.2 billion ($141 million) due to foreign exchange losses amounting to N193.7 billion ($116.6 million).
These losses were caused by the sustained depreciation of the Nigerian Naira against the U.S. dollar.
Despite a notable increase in revenue, which grew from N202.7 billion ($122.1 million) to N295.6 billion ($178 million), the company’s pretax loss for the period amounted to N211.4 billion ($127.3 million).
After accounting for tax benefits, the net loss was reduced to N144 billion ($86.7 million).
Dangote Sugar retains top spot as Nigeria’s largest sugar producer
Dangote Sugar Refinery, a subsidiary of the diversified industrial conglomerate Dangote Group, is the country’s largest sugar producer, with a refining capacity of 1.44 million metric tonnes.
Aliko Dangote, Africa’s richest man with a net worth of $13.5 billion according to the Bloomberg Billionaires Index, owns 72.7 percent of the company, with his stake valued at $196 million.
Naira devaluation impacts Dangote Sugar
The devaluation of the naira has severely impacted Dangote Sugar’s financial performance, leading to a significant shift from retained earnings of N66.7 billion ($40.1 million) at the beginning of the year to a retained loss of N77.1 billion ($46.4 million) by mid-year.
This expanded loss position also caused the company’s liabilities to swell from N521.2 billion ($313.9 million) as of Dec. 31, 2023, to N779.41 billion ($469.4 million) by June 30, 2024.
Total equity dropped from a positive position of N79.2 billion ($47.7 million) to a negative position of N64.7 billion ($39.2 million).
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