By ADEBISI ADEMOLA
Dangote Sugar Plc has announced 29.1 per cent drop in revenue blaming gridlock in Apapa and smuggling for the lower than expected profit realized in the half year (H1) unaudited result and accounts of 2018.
The sugar processing company reported N118.68billion revenue in H1 2017 as against N84.08 billion reported in H1 2018.
Dangote Sugar profit before tax thus dropped by 21.19 per cent to N19.90 billion in H1 2018 from N25.25 billion reported in prior half year results.
The company in a statement said, “The decline in sales volumes was due mainly to the continued presence of lower quality, unlicensed sugar being smuggled into the country and sold in key markets.
“It provides a ready alternative to trade customers who are not mindful of the quality implications of the product. Due to its lower price, it continues to exert a downward pressure on prices and sales volumes.
“Year on year there has been a reduction in the average selling price (currently ₦13,160/50kg bag vs ₦16,170/50kg bag in 2017) as the impact of the downward trend in global sugar prices comes through.
“Also, the Apapa access road traffic gridlock has had an adverse impact on our logistics and product distribution activities.
“Group revenue declined by 29.2 per cent was as a result of the decline in sales volume and price.
“Though we maintained our market leadership position in the sugar sector, the period under review was very challenging due to the impact of unlicensed sugar being sold in key markets nationwide, and logistics challenges brought about by the Apapa Access road traffic gridlock.”
The company said it is confident that the implementation of its Sugar Backward Integration Projects plan.
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