Dangote Sugar Refinery Plc has returned to profitability in the first half of 2026, recording N41.51bn profit after tax, driven by a sharp decline in production costs and finance charges.
The performance represents a significant turnaround from the N24.27bn loss recorded in the corresponding period of 2025.
The recovery came despite an 8.9 per cent decline in revenue, which fell to N391.85bn from N430.21bn recorded in the first half of last year, according to the company’s half-year financial statements.
Lower costs boost gross profit
The major driver of the improved performance was a substantial reduction in the company’s cost of sales.
Dangote Sugar’s cost of sales fell by 21.3 per cent to N298bn, compared with N378.53bn in the first half of 2025.
The reduction lifted gross profit by 81.6 per cent to N93.85bn from N51.68bn a year earlier.
Consequently, the company’s gross margin improved significantly to approximately 24 per cent from about 12 per cent in the corresponding period of 2025.
The improvement at the gross-profit level helped offset the decline in revenue and provided a stronger foundation for the company’s return to profitability.
Finance costs fall
Dangote Sugar also recorded a notable reduction in its financing burden during the period.
Finance costs declined by 22.4 per cent to N50.42bn in the first six months of 2026 from N64.97bn in the same period of 2025.
The decline is particularly significant given the impact of financing expenses on the company’s performance last year.
In 2025, Dangote Sugar incurred finance costs of N175.35bn, contributing substantially to its N64.12bn full-year loss.
With the lower financing burden and stronger gross profit, the company’s operating profit rose to N92bn in the first half of 2026, compared with N38.1bn recorded in the corresponding period of 2025.
Profit before tax hits N44bn
The company, however, recorded a fair-value adjustment loss of N438.24m during the period, compared with a N1.90bn gain recorded in the first half of 2025.
Despite the negative adjustment, Dangote Sugar posted a profit before tax of N44.09bn, compared with a loss before tax of N22.11bn in the same period last year.
Profit after tax attributable to owners of the parent stood at N41.54bn, translating to earnings per share of N3.42.
This compares with a loss per share of N2.00 recorded in the first half of 2025.
Q2 performance strengthens turnaround
The company’s second-quarter performance was particularly strong.
Dangote Sugar reported N22.36bn profit after tax for the three months ended June 2026, compared with a N626m loss in the corresponding quarter of 2025.
The second-quarter performance reinforced the positive trend already established in the first three months of the year.
In the first quarter of 2026, the sugar producer reported N19.15bn profit after tax, a significant reversal from the N23.65bn loss recorded in the same period of 2025.
Cost efficiency drives recovery
The latest results indicate that Dangote Sugar’s earnings recovery is being driven primarily by improved cost efficiency and a lower financing burden rather than revenue growth.
The company’s performance marks a significant reversal from 2025, when elevated finance costs and operating pressures pushed it into a full-year loss of N64.12bn.
The return to profitability in the first half of 2026 suggests that the company’s efforts to reduce costs and manage its financing obligations are beginning to translate into stronger bottom-line performance, despite weaker revenue during the period.
