In Q3 2023, Dangote Sugar Refinery (‘the Group’) reported a tempered year-on-year revenue growth of 4% to N106.93 billion from N102.86 billion in Q3 2022. In our view, the moderate revenue growth in Q3 2023 suggests that the Group struggled with volume sales.

The Group incurred a loss before tax of N9.96 billion in Q3 2023, reflecting a 252% decrease from Q3 2022 profit before tax of N6.54 billion. However, a tax credit of N10.92 billion in Q3 2023, enabled the Group to report a profit after tax of N960.00 million. This, nevertheless, reflects a 79% downturn from N4.59 billion in Q3 2022.


Given the Group’s leadership status in its industry and the anticipated improvement in its margin due to the efficiencies expected after the proposed merger between Dangote Sugar Refinery Plc, Nascon Allied Industries Plc and Dangote Rice Limited, we maintain our optimism for the Group in the medium to long term.

However, the Group currently grapples with volume challenges amid elevated input costs, leading us to temper our optimism for a substantial uptick in the final quarter of the 2023 fiscal year. Consequently, we have adjusted our FY 2023 revenue forecast downward to 7% (previous: 11%), while upholding our HOLD recommendation for the stock, we also adjusted our fair value downward to N52.87 (previous: N57.33).

Please follow the link “Dangote Sugar Refinery Q3 2023 – Tempered Topline Growth Squeezes Margins” to view the whole report.

Thank you.

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