Aliko Dangote's sugar business swings from loss to $30 million H1 profit

Dangote Sugar Refinery has turned a ₦24.27 billion half-year loss, about $17.46 million, into a ₦41.51 billion profit, roughly $29.86 million, and it did so while selling less sugar.

The swing across the two periods comes to ₦65.78 billion, or $47.32 million. Earnings per share reached ₦3.42 against a loss per share of ₦2.00.

Revenue fell. Turnover for the six months to June 30 came in at ₦391.85 billion, about $281.91 million, down 8.9% from ₦430.21 billion, or $309.51 million.

What changed was the cost of making the product. Cost of sales dropped 21.3% to ₦298 billion, roughly $214.39 million, from ₦378.53 billion, or $272.33 million. Raw material costs alone fell ₦84.78 billion, about $60.99 million, to ₦233.24 billion, or $167.80 million.

Gross profit consequently rose 81.6% to ₦93.85 billion, about $67.52 million, from ₦51.68 billion, or $37.18 million. Gross margin widened to 24.0% from 12.0%.

Sugar refining in Nigeria runs on imported raw cane, priced in dollars. A steadier naira through the period cut the landed cost of every tonne the company processed, and almost the entire improvement flows from that.

The currency effect appears twice more in the accounts. Finance costs fell 22.4% to ₦50.42 billion, about $36.27 million, from ₦64.97 billion, or $46.74 million. And the exchange loss that ran through last year's figures has disappeared entirely, replaced by an exchange gain of ₦11.83 billion, roughly $8.51 million, recorded in other income. That lifted the line to ₦12.14 billion, about $8.74 million, from ₦244.95 million, or $176,000.

The second quarter was the stronger half. Revenue of ₦204.07 billion, about $146.81 million, produced gross profit of ₦50.75 billion, or $36.51 million, and a quarterly profit of ₦22.36 billion, roughly $16.08 million, against a ₦626.11 million loss, or $450,000, in the same three months of 2025.

Cash generation improved dramatically, though the reason deserves attention. Operations produced ₦184.52 billion, about $132.75 million, against negative ₦20.94 billion, or minus $15.06 million, a year earlier. Roughly ₦54.50 billion of that, some $39.21 million, came from an increase in trade payables, meaning the company is holding supplier money longer. Trade payables now stand at ₦142.34 billion, or $102.41 million, against ₦87.84 billion, about $63.20 million, at the start of the year.

The balance sheet has been repaired but remains stretched. Total equity recovered to ₦170.49 billion, roughly $122.65 million, from ₦128.98 billion, or $92.79 million, in six months. Total liabilities fell to ₦746.69 billion, about $537.19 million, from ₦836.95 billion, or $602.12 million. Financial liabilities came down to ₦584.15 billion, roughly $420.25 million, from ₦725.31 billion, or $521.80 million, after the company repaid ₦147.01 billion, about $105.77 million, of principal and cut commercial paper exposure to ₦42.96 billion, or $30.91 million, from ₦221.70 billion, about $159.49 million.

Accumulated losses still total ₦148.25 billion, roughly $106.65 million, and current liabilities of ₦738.48 billion, about $531.28 million, exceed current assets of ₦275.72 billion, or $198.36 million, by a wide margin. The directors state that the group has consistently made profits until recently and that they see no threat to the business, and have prepared the accounts on a going concern basis.

Capital spending continued through the recovery, with ₦47.23 billion, about $33.98 million, added to property, plant and equipment, most of it in motor vehicles at ₦32.40 billion, or $23.31 million.

Lagos generated ₦223.13 billion of revenue, roughly $160.53 million, and the North ₦138.93 billion, about $99.95 million. One customer accounted for 29.06% of total revenue, contributing ₦58 billion, or $41.73 million, in the second quarter alone.

Dangote Industries Limited holds 68% of the company and the Nigerian public 32%. The ultimate controlling party is Greenview International Corporation of the Cayman Islands, behind which sits Aliko Dangote. Mariya Aliko-Dangote serves on the board as a non-executive director, alongside chairman Arnold Ekpe and group managing director Thabo Solomon Mabe.

The board approved the accounts on July 30. No interim dividend was declared, with the full ₦41.51 billion retained against accumulated losses.