Dangote Sugar Refinery Plc had an impressive financial performance in Q2 2022 as revenue grew by 41% YoY to N91.01bn compared to N64.56bn in the corresponding Q2 of 2021, and bottom line recorded a solid growth of 164% YoY to N11.37bn from N4.30bn. The management attributed the revenue performance to volume growth. We also believe that higher pricing contributed to the revenue growth.

Higher Pricing Offsets Higher Cost of Raw Materials.

Owing to the challenges of high cost of key raw materials which was driven by global inflationary pressures, the Group recorded a 33% YoY cost of sales increase to N71.65bn from N54.01bn in Q2 2021 with raw materials costs accounting for 81% of the cost of sales.

The increase in prices and high-volume outturn yielded positive result as the 84% increase in gross profit shows that the revenue growth was effective enough to offset the increased cost of sales.


We expect DSR to sustain its growth trajectory into H2 2022. We believe that an industry-wide price hike and the Company’s market leadership status are the catalysts to earnings growth. Therefore, as input costs keep rising, we expect the Group to pass the burden to consumers.

We maintain our BUY recommendation for DSR, with a N21.08 fair value. The total return estimate is 36% (inclusive of a 7% estimated dividend yield), relative to the current share price of N16.40.

Please follow the link “Dangote Sugar Refinery Plc Q2 2022 – Delivers Strong Bottomline Growth in Q2 2022” to view the whole report.

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