Dangote Sugar Plc and BUA Foods Plc raked in a whopping N1.025trn from sales of sugar during the third quarter of 2024.
This represents a 36.23 per cent increase from the N752.383bn realised by these two food giants in the corresponding period of 2023.
The surge in the revenue is attributed to inflationary pressures and the depreciation of the Naira, which have led to a significant rise in the prices of agricultural products in the country.
The information is contained in the unaudited half-year results of the company tracked. These sales also represent 65.92 per cent of the total revenue of N1.555trn recorded by the firms during the period under review from N832.141bn in 2023.
A cursory look at the financials showed that BUA Foods revenue grew by 104 percent to N1.07trn in third quarter of 2024 as against N524.4bn posted in 2023.
This, according to the company was due to a year-on-year increase of 73 percent in sugar sales to N544.4bn from N315.1bn in 2024, 160 percent in Flour sales to N389.9bn from N149.9bn in 2023, and 131 percent in Pasta sales to N134.8bn as against N58.3bn reported in 2023.
Cost of sales increased by 116 per cent to N736.97bn in 2024 from N340.64bn in 2023. This was driven by an increase in raw materials cost and energy cost.
The high input cost environment and further devaluation of the Naira against the US Dollar weighed heavily on prices of raw materials.
Profit after tax grew by 91 per cent to N201.38bn in 2024 as against N105.6bn reported in 2023.
Dangote Sugar Refinery, a leading integrated sugar business in Nigeria reported revenue of N480.87bn from sugar sales in the first nine months of 2024, marking a 9.81 per cent increase from the N437.91bn achieved in the same period of 2023.
Despite the revenue growth, the company experienced a significant increase in its net loss, which widened to N184.4bn for the nine-month period ending in September 2024.
This rise in losses has been largely attributed to a 176 per cent surge in finance costs during the period under review.
In a year-over-year comparison, Dangote Sugar recorded an after-tax loss of N27.03bn for the nine-month period ending September 2023.
In contrast, the company’s finance costs escalated sharply to N300.2bn in the same period of 2024, up from N108.7bn in the corresponding period last year.
Additionally, the firm’s financial income saw a decline, decreasing to N6.93bn from N7.24bn over the period. Despite these challenges.
Dangote Sugar Refinery reported revenue growth, increasing to N484.4bn in the reviewed period compared to N309.7bn in the comparable period of 2023.
Some of the cost pressures were fueled by the removal of fuel subsidies, exchange rate harmonization, and Naira depreciation.
Due to the depreciation of the Naira and other macro-economic inflationary pressures, especially in the domestic market, food inflation has heightened spiraling prices of food items.
Nigeria’s inflation rate rose slightly in September 2024 to 32.70 per cent, according to data released by the National Bureau of Statistics. The headline inflation rate was 32.15 per cent in August 2024.
On a year-on-year basis, the September figure was 5.98 percentage points higher compared to the rate recorded in September 2023, which was 26.72 per cent.
Food inflation rate in September 2024 was 37.77 per cent. On a year-on-year basis, it was 7.13 percentage points higher than the rate recorded in September 2023 (30.64 per cent).
The items contributing most to this inflation include Semovita, Oatflake, Yam flour (pre-packaged), Garri, and Beans (under the Bread and Cereals class); Irish Potatoes, Sugar, Yam, and Water Yam (under the Potatoes, Yam, and Other Tubers class); Palm Oil and Vegetable Oil (under the Oils and Fats class); Stockfish, Mudfish, and Crayfish (under the Fish class); and Beef, Chicken (live), Pork, and Bush Meat (under the Meat class).
Nigeria’s over-reliance on oil and gas as major sources of revenue has significantly hindered its ability to meet the rising global demand for sugar.
To enhance domestic production, reduce imports, and improve the quality of palm oil, Nigeria must address the challenges faced by these critical stakeholders.