FRI JULY 31 2026-theGBJournal| Dangote Sugar Refinery Plc returned to profitability in the second quarter of 2026, underscoring the benefits of stronger cost discipline and easing financing costs despite continued weakness in domestic sugar demand.
The company reported an unaudited earnings per share (EPS) of N1.84 for Q2-26, reversing a loss per share of N0.05 a year earlier.
First-half EPS also recovered to N3.42, compared with a loss per share of N2.00 in H1-25.
The earnings turnaround was driven by improved operating efficiency, with gross margin expanding by 526 basis points year-on-year and EBITDA margin improving by 905 basis points.
Lower borrowing costs also supported the bottom line, as net finance costs declined 40.3% year-on-year.
Revenue, however, remained under pressure, falling 5.6% year-on-year in the second quarter and 8.9% in the first half, highlighting a slower-than-expected recovery in domestic sugar consumption as the impact of earlier price increases waned.
The decline was largely attributable to weaker sales in the company’s core 50kg sugar segment, which accounted for 97.7% of group revenue and recorded a 4.7% year-on-year drop in Q2 sales, extending the first-half decline to 8.5%.
Meanwhile, the Retail sugar and Molasses segments remained under pressure, with revenue declining 32.2% y/y and 39.0% y/y, respectively, although together they accounted for just 2.2% of group revenue and had a limited impact on overall performance.
Sequentially, revenue increased 8.6% q/q, driven almost entirely by a 9.5% q/q increase in 50kg sugar sales, which accounted for 97.7% of Q2 revenue.
The sequential improvement more than offset weaker Retail (-21.0% q/q) and Molasses (-12.6% q/q) sales, suggesting a modest recovery in the group’s core business.
Gross margin expanded by 526bps y/y to 24.9%, as the 11.8% y/y decline in cost of sales outpaced the 5.6% y/y decline in revenue.
EBIT and EBITDA margins consequently improved by 631bps y/y and 905bps y/y to 22.7% and 28.6%, respectively (H1-26: +14.62ppts and +17.52ppts to 23.5% and 29.5%), reflecting a meaningful improvement in operating leverage, supported by broadly contained operating expense growth (+8.0% y/y).
Net finance costs declined by 40.3% y/y to N20.68 billion (H1-26: -23.6% y/y), driven by a 37.4% y/y reduction in finance costs. The improvement reflected lower financing requirements, evidenced by a 53.1% y/y decline in letter of credit charges and a 48.9% y/y reduction in overdraft interest expense, supported by stronger operating cash generation.
Profit before tax rebounded to N23.40 billion in Q2-26 from N1.04 billion in Q2-25, bringing H1-26 PBT to N44.09 billion versus a loss before tax of N21.60 billion in H1-25.
Accordingly, profit after tax improved to N22.36 billion from a loss of N0.11 billion in Q2-25, with H1-26 PAT reaching N41.51 billion compared with a loss of N23.76 billion in H1-25.
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