Investors Rush Stocks in Dangote Sugar as the Company Grows 36.21% In Q1 2023

The strong earnings from Dangote Sugar are attracting potential investors to bid for its stock which has led to a 36.21% appreciation in Q1 2023.

Between 2020 and June 2023 which was a roll of 42 months, investors were able to get a capital gain of 48.85%. Kasimu Garba Kurfi the MD of APT Securities and Funds Limited disclosed in detail.

Dangote Sugar in its 2022 financial year announced a 46.02% increase in revenue from N276.05 billion to N403.24 billion. The company's profit before tax grew to 137.72% which caused a revenue shift from N34.02 billion to N82.30 billion. While the profit after tax increased to 148.25% which caused a revenue shift from N22.05 billion to N54.74 billion. 

The company tax report for 2022 was N27.56 billion far from the N11.96 billion recorded in 2021.

In 2022, Dangote Sugar delivered good dividends which attracted investors, including bargain seekers to take advantage.

The profit that the company recorded in 2022 resulted from the rising costs of Dangote Sugar. The company recorded N311.28 billion in 2022 far from N225.85 billion in 2021. Further speaking on the rise in the cost of its product, the company said that it was due to currency depreciation, an uptick in distribution cost, an increase in the cost of raw material importation, and a hike in the price of diesel as well as tax expenses.

To control increasing costs, the corporation implemented effective cost-cutting methods. It successfully reduced marketing and distribution expenses from N906 billion in 2021 to N741 billion in 2021. Finance costs were reduced from N5.21 billion to N3.42 billion.

Fund managers however predicted that Dangote Sugar would continue its outstanding performance in 2023. The excitement comes from the strong Q1-23 results and price increase in H1-23. While the company revenue increased 8.23% from N94.44 billion in Q1-22 to N102.22 billion in Q1-23.

Dangote Sugar's profit before tax increased from N13.60 billion to N18.33 billion. Despite an increase in finance costs from N3.50 billion to N8.05 billion. The outcome confirmed the company's cost-cutting measures, as selling and distribution expenses fell to N174.56 billion from N260.81 billion in Q1-22. The cost of selling increased just a little from N74.98 billion in Q1-22 to N76.47 billion in Q1-23.

According to the strategy, the business is investing considerable resources in its Dangote Sugar Taraba Limited, Dangote Sugar Nasarawa Limited, and Dangote Sugar Adamawa Limited, to increase sugar refining capacity from 3,000 to 9,000 metric tonnes per year.

Dangote Sugar plans to expand its sugar plantation from 8,700 hectares in 2022 to around 24,200 hectares in 2030 as part of the backward integration project.

In the face of global economic instability, the company has implemented good risk management techniques and sustainability plans to protect investors' money from the shifts in the business climate.

To reassure shareholders of the company's transparency culture, the Board of Directors has established an excellent corporate governance culture.