Earnings Update: Dangote Sugar Refinery Plc Q3 2024 – Costs Pressures Drive Operating Loss.

Event

Dangote Sugar Refinery Plc (“the Group”) sustained its net loss position in Q3 2024, notwithstanding the impressive revenue growth. This underscores the continuous challenges with high input and operating cost, increased cost of capital, and impact of currency depreciation on FX obligations.

Revenue grew by 77% to N188.80 billion (Q3 2023: N106.93 billion), we opine that this growth was aided majorly by pricing strategy and probable volume growth. However, the growth was offset by an even faster rise in cost of goods, which significantly eroded the benefits of the extent of the higher pricing.

Outlook

Despite an upward revision to our FY 2024 revenue projection to N644.23 billion (previously: N570.37 billion), the persistent challenges of escalating input and operating costs, elevated finance cost, and FX pressures continue to pose significant challenge to the Group’s bottom-line.

Nevertheless, we maintain our HOLD recommendation for the stock, albeit with a revised fair value estimate of N33.25 (previously: N35.00).

Please follow the link “Dangote Sugar Refinery Plc Q3 2024 – Costs Pressures Drive Operating Loss” to view the whole report.        

Thank you.