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Despite a 34 percent decline in gross revenue in the first quarter of 2018, Dangote Sugar’s first quarter profit after tax (PAT) rose by 11 percent to N5.3 billion compared with N4.76 billion made in similar period in 2017. Profit margin increased to 13 percent in the period that ended March 2018 as against 8 percent in corresponding period in 2017.
The reduction in sales has been attributed to low consumer confidence and renewed insurgency in the northern parts of the country. As a result, sales in the first quarter of 2018 fell to N39.25 billion from N59.53 billion in corresponding quarter in 2017.
When analysed along its regions of operations, sales revenue from the northern part of the country recorded the highest decline in the first quarter of the year. Its four regions of operations are Lagos, North, West and East. From N24.12 billion in Q1 2017, sales in the North fell by 46 percent to N13.11 billion in the first quarter of 2018. Revenue realised from the West declined by 28 percent from N6.79 billion in Q1 2017 to N4.92 billion in Q1 2018.
| Index | Market Returns in First Quarter 2018 (March 2018) | Market Returns April 30,2018 | Market Returns May 4,2018 | Market Returns May 5, 2017 |
| All Share Index(ASI) | 8.53% | 7.91% | 7.78 | -2.38% |
| NSE Premium Index | 15.06% | 15.19% | 15.09 | -3.81% |
| NSE Main Board Index | 4.71% | 7.24% | 7.08 | -0.51% |
| NSE ASeM Index | -9.09% | -11.85% | -11.85 | 0.49% |
| NSE 30 Index | 7.30% | 7.41% | 7.27 | -0.69% |
| NSE Banking Index | 9.49% | 9.32% | 10.54 | 7.49% |
| NSE Insurance Index | 8.41% | 4.53% | 3.58 | -1.99% |
| NSE Consumer Goods Index | 0.21% | 2.95% | 1.79 | -10.97% |
| NSE Oil/Gas Index | 4.90% | 10.06% | 8.59 | 0.33% |
| NSE Lotus Islamic Index | 5.41% | 5.01% | 4.78 | -7.44% |
| NSE Industrial Index | 10.96% | 5.18% | 5.70 | 5.93% |
| NSE Pension Index | 14.84% | 16.22% | 16.46 | 7.86% |
| Market Capitalisation | 10.17% | 9.84% | 9.71 | -1.92% |
Dangote Sugar also recorded a decline in sales in Lagos as Q1 2018 revenue of N19.04 billion was 27 percent lower when compared with N25.91 billion realised in Q1 2017. Sales in the East which stood at N2.16 billion in the first quarter of 2018 were 20 percent lower than N2.70 billion made in similar period in 2017.
Meanwhile, efficient cost management resulted in 40 percent reduction in the company’s cost of sales which fell to N30.85 billion during the first quarter of this year from N51.69 billion in same period in 2017. Consequently, cost of sales to revenue declined to 79 percent down from 87 percent in Q1 2017, meaning that Dangote Sugar generated a naira revenue with 79 kobo in Q1 2018 as against 87 kobo to generate a naira revenue in Q1 2017
Concerning the low consumer confidence which impaired consumers’ purchasing power, the Central Bank of Nigeria (CBN) in its first quarter 2018 Consumer Expectations Survey Report stated that consumer outlook for the first quarter of this year deteriorated as fewer consumers were optimistic in their outlook.
“The consumers’ overall confidence outlook worsened in Q1 2018, as fewer consumers were optimistic in their outlook. The index at -6.4 points was 23.0 points lower than the index in the corresponding period of 2017. Some respondents attributed this moderation in outlook to worsening economic condition and family financial situation”, the CBN stated in the Q1 Consumer Expectations Survey Report.
In the last few months, renewed insurgency on the part of Boko Haram and incessant attacks by suspected herdsmen have displaced so many families in states such as Zamfara, Yobe, Borno, Adamawa, Taraba, Benue and Plateau states, with immediate impact of the sales of consumer goods and agricultural productivity.
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