DANGOTE SUGAR'S SWEET TASTE OF FIRM GRIP

In trying times, it really matters for company managers to be in firm control as much as possible. Dangote Sugar Refinery PLC just proved this for itself in 2015 and ended up weathering the storm of the year fairly well.
First, even revenue outside its control had dived dangerously. Income from other non core operations dropped by 59.4% to N1332.8m from N3285.4m while investment income almost dried up going down 95.8% to N11.9m from 2014's N285.6m.
Even surplus from fair value adjustment of financial assets decreased too but by 10.2% to N1349.2m from N1502m.
To make matters worse, finance charges developed wings to N664.9m from N106.4m previously.
This was at a time core revenue grew by only 6.54% to N101057.9m from N94855.2m and total income even grew less by 3.83% to N103751.8m from N99928.2m.
Yet, Dangote Sugar ended the year with 8.35% increase in profit before tax to N16548.3m from N15273.2m.
Though less than a double digit growth that meant Dangote Sugar gained N15.9 and N15.3 on each N100 income in 2015 and 2014 respectively, the taste was sweet because sleeves were rolled up very effectively.
For example, cost of goods sold increased well behind core revenue growth by closing 5.38% up at N80329.4m from N76227.2m.
Then, more firm grip reduced selling and distribution costs by 54.5% to N890.7m from N1955.7m and cut off 16.5% from administration expenses to end year at N5318.5m from N6365.7m.
The net result was that operating profit rose by 16.6% to N15852.1m from N13592m before those drops in non core incomes and leap in finance charges watered it down to the single digit rise recorded in profit before tax.
SO:
* It will perhaps be possible to make shareholders smile to the bank this year by doing something about what shot up the finance bill in 2015.
* Naturally, it goes without saying that the firm grip over more directly controllable costs must continue.

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