Dangote Sugar Refinery Plc returned to profitability in the first half of 2026, posting group profit after tax of N41.5 billion, reversing a loss of N24.3 billion in the same period last year, even as revenue slipped on the back of softer sugar volumes.
Revenue fell 8.9 percent to N391.9 billion from N430.2 billion in H1 2025, with the sale of 50kg sugar bags, the company’s dominant product line, still accounting for the bulk of turnover even as overall volumes came under pressure.
Cost of sales dropped more sharply, down 21.3 percent to N298 billion from N378.5 billion, helped by lower raw material costs and reduced freight expenses, allowing gross profit to expand 81.6 percent to N93.9 billion from N51.7 billion despite the topline decline.
Other income jumped to N12.1 billion from N244.9 million, driven largely by an exchange gain of N11.8 billion, a sharp turnaround from the muted contribution a year earlier.
Administrative expenses rose modestly to N13.5 billion from N13 billion, while selling and distribution costs came in as a net credit for the half, helping keep total opex growth well behind the pace of gross profit expansion.
Operating profit surged 141.5 percent to N92 billion from N38.1 billion, underscoring the extent to which margin recovery, rather than volume growth, powered the half.
Below the operating line, finance costs eased 23.6 percent to N47.5 billion from N62.1 billion, as the company pared down its letters of credit and commercial paper exposure, even as it took on fresh bank borrowings during the period.
A fair value loss of N438.2 million on biological assets, tied to the growing cane yet to be harvested, contrasted with a N1.9 billion gain in the prior year, the one soft spot in an otherwise sharply improved half.
Profit before tax swung to N44.1 billion, from a loss of N22.1 billion in H1 2025, while profit after tax settled at N41.5 billion, from a loss of N24.3 billion a year earlier. Basic earnings per share came in at N3.42, from a loss per share of N2.00 previously.
Total assets contracted 11.2 percent year on year to N917.2 billion, from N1.03 trillion, as cash and cash equivalents fell 80.3 percent to N29.2 billion from N147.8 billion, even as inventories rose 34.1 percent to N145.6 billion from N108.6 billion and property, plant and equipment edged up 3.3 percent to N632.5 billion.
Total liabilities declined 12 percent to N746.7 billion, from N848.3 billion, as current financial liabilities, comprising letters of credit, commercial paper and bank borrowings, fell 20.5 percent to N584.1 billion from N735.2 billion. Trade and other payables, however, rose 46.4 percent to N142.3 billion from N97.3 billion, partly on higher amounts due to related parties.
Total equity dipped 7.7 percent year on year to N170.5 billion, from N184.8 billion, though it climbed 32.2 percent from the N129 billion posted at the end of the 2025 financial year, as the group’s accumulated loss narrowed to N148.2 billion from N189.8 billion at the start of the period. The gearing ratio improved to 343 percent, from 398 percent a year earlier and 562 percent at full-year 2025.
Cash generated from operating activities swung to N184.5 billion, from cash used of N23.2 billion in H1 2025, as working capital movements and lower finance costs boosted operating cash generation.
Cash used in investing activities rose to N44.3 billion, from N9.6 billion, as the company nearly quadrupled spending on property, plant and equipment to N47.2 billion, from N12.5 billion, reflecting continued investment in its backward integration projects.
Financing activities absorbed N135.3 billion in cash, a reversal from the N21.6 billion generated a year earlier, as the group repaid N178.7 billion in commercial paper and reduced letters of credit by N149.2 billion, even as it drew down N362.3 billion in fresh bank loans against N147 billion in principal repayments.
Cash and cash equivalents closed in the half at N29.2 billion, down 69.9 percent from N96.9 billion as at June 2025, a drop attributable to the scale of both debt repayment and the stepped-up capex programme.
Dangote sugar’s share price currently sits at N78.70, after rewarding its holders with year to date gain of 31 percent in the nigerian stock exchange, the consumer goods firm has a market capitalisation of N955.6B, making it one of the most valuable companies on the nigerian stock exchange.