DANGOTE SUGAR: THE BURDEN OF DEBTS

Gradually, the burden of borrowed funds was becoming quite heavy for Dangote Sugar PLC but for now, it is bearing it fairly well.
According to the figures to September released last week, Dangote Sugar's financial charges increased by 190.8% within the period to N890.9m from N306.4m at the same time in 2014,
This was apparently because by September, its borrowed funds closed at N3307.7m, up considerably on the less weighty N125m previously.
In spite of this, Dangote Sugar's working capital eased by 18.1% although cash rose marginally to N5050.6m from N4459.6m.
However, the bulk of the borrowed money went into fixed assets ( up 10.1% to N51358.8m ) acquisition of investment property  and the 131.1% growth in biological assets to NN1546.7m from N669m.
Besides, in spite of the burden, Dangote Sugar reported 4.95% increase in profit to N14244.1m even as turnover decreased marginally and income from other sources dropped by 57.7%.
This was because most costs went down at faster rate compared to the income drop rate.
SO:
* Since debt burden is always a growing item until assets acquired begin to contribute to bottom line, it not likely that anything higher than the fair increase in profit can be expected by year end.
* The grip on costs must remain firm.

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