By Taofik Salako, Deputy Group Business Editor
The Board of Directors of Dangote Sugar Refinery (DSR) Plc has recommended 36.4 per cent increase in dividend payout after the sugar company bucked the global COVID-19 pandemic to post- strong growths in sales and profitability.
Shareholders will receive a dividend per share of N1.50 for the 2020 business year as against N1.10 paid for the 2019 business year.
Key extracts of the audited report and accounts of Dangote Sugar Refinery Plc for the year ended December 31, 2020 released at the Nigerian Stock Exchange (NSE) showed that group turnover increased by 33 per cent to N214.30 billion in contrast to N161.09 billion in 2019. Gross profit increased by 40.4 per cent to N53.75 billion compared with N38.29 billion in 2019. Profit before tax rose by 53 per cent from N29.82 billion to N45.62 billion. Profit after tax increased by 33.2 per cent to N26.70 billion as against N22.36 billion in 2019.
Despite the disruptions to the economy, owning majorly to the pandemic, Dangote Sugar Refinery recorded increase in production volume which rose by 13.7 per cent to 743,858 tonnes in 2020 compared with 654,071 tonnes in 2019.
The sugar group also posted increase in sales volume which rose by 6.9 percent from 684,487 tonnes to 731,701 tonnes.
Group Managing Director, Dangote Sugar Refinery (DSR) Plc, Mr. Ravindra Singhvi attributed the improvements to operations optimization strategy despite momentary disruption caused by civil unrest in last quarter of the year, noting that growth continued to benefit from the sustained efforts to drive customer base expansion and several trade initiatives and investments.
According to him, despite the socio-economic uncertainties occasioned by COVID-19 pandemic during the year under review, the sugar group continued on the growth path with commitments to improve performance and generate value for all stakeholders.
“Our focus on the implementation of our key strategies in the face of the several challenges posed by the COVID pandemic, the peculiarities of the Apapa traffic situation, among others we achieved a topline growth in revenue of N214.30 billion, a 33.0 per cent increase over 2019; a 53 per cent year-on-year increase in profit before tax, and 33.2 per cent increase in profit after tax.
“2020 was indeed very eventful for our company ranging from the weak macroeconomic fundamentals caused by the underlying impact of COVID-19 pandemic which saw to the steady rise in foreign exchange rate, high inflation and the significant rise in our cost of production, to the worsening traffic gridlock on the Apapa Wharf road which led to delays and at times disruption of the distribution and deliveries to customers,” Singhvi said.
He added that the company activated its business continuity management system (BCMS) during the lock down periods due to the pandemic and disruptions caused by EndSARS protests, which helped to minimise the adverse impact the situation had on businesses in the country.
He noted that one of the key highlights of during the year was the successful completion of the scheme of arrangement – merger of Dangote Sugar Refinery Plc (DSR) and Savannah Sugar Company Limited (SSCL) with effect from September 1, 2020 to operate under one unified entity.
“We are confident the merger will enable us to achieve operational, administrative and governance efficiencies resulting in increased shareholder value. We will continue to pursue our Backward Integration Projects, and other key initiatives to grow our sales volumes, market share, optimize cost and operational efficiencies,” Singhvi said.
Dangote Sugar Refinery is Nigeria’s largest producer of household and commercial sugar with 1.44 million metric tonnes refining capacity at the same location. Its refinery located at Apapa Wharf Ports Complex, refines raw sugar imported from Brazil to white, Vitamin A fortified refined granulated white sugar suitable for household and industrial uses.
The company’s backward Integration goal is to become a global force in sugar production, by producing 1.5 million metric tonnes per annum of refined sugar from locally grown sugar cane for the domestic and export markets.
Singhvi outlined that in order to achieve its business goals, Dangote Sugar Refinery Plc acquired Savannah Sugar Company Limited, located in Numan, Adamawa State in December 2012, and embarked on the ongoing rehabilitation of its facilities and expansion of its 32,000 hectares’ sugarcane estate. In September 2020, the scheme of merger between DSR and Savannah Sugar estate was completed which gave birth to a bigger and stronger business with considerable opportunity for growth and delivery of superior benefits to all stakeholders. The expansion and rehabilitation of the sugar estate is still ongoing as well as the development of the greenfield site acquired at Tunga, Nasarawa State for the achievement of DSR’s sugar for Nigeria development master plan.
The Nasarawa Sugar Company Limited is the registered subsidiary of Dangote Sugar Refinery Plc. The 78,136 hectares Sugar Project Site is located at Tunga, Awe Local Government Area, of Nasarawa State. Massive developments in agriculture, irrigation infrastructure amongst others is ongoing at the site. However, Lau/Tau project is still on hold following the lingering compensation issue between the communities and Taraba state government.