- FG extends 2024 licencing bid registration by 10 days
Dangote Sugar Refinery Plc has successfully raked in N42.79 billion from investors in the debt market.
The funds were raised under its Series 4 and 5 Commercial Paper notes, according to a document released to the capital market community on the Nigerian Exchange Limited.
The fresh capital will boost the Company’s strategy to diversify its funding sources with funds raised being deployed to support its short-term working capital and funding requirements.
The Notes, which were issued under the Company’s N150 billion Commercial Paper Issuance Programme, comprised N12.93 billion 181-day Series 4 and N29.86 billion 265-day Series 5 notes.
The Series 4 notes are priced at a 23.00 percent yield while the Series 5 notes are priced at a 25.00 percent yield, with participation from several investor groups, including Pension and Non-Pension Asset Managers, as well as other Institutional and Individual Investors.
DSR’s revenue grew by 20.1 percent y/y in Q1-24, driven by increases in all its product lines – 50kg Sugar (+18.5% y/y | 95.3% of revenue), Retail sugar (+84.2% y/y | 3.4% of revenue) and Molasses (+119.7% y/y | 1.2% of revenue) – save for Freight income (-77.4% y/y | 0.1% of revenue).
The revenue growth in the period was primarily supported by higher prices. Across its business segments, revenue from the North (-22.6% y/y) and East (-8.3% y/y) were the only laggards, as the company recorded growth across its Lagos (+76.9% y/y) and Western (+3.4% y/y) segments. Sequentially, revenue declined by 6.8% q/q, attributed to lower demand after the festive period-induced consumption subsided.
Gross margin (-18.06 ppts y/y) plummeted to 7.1 percent, following a 49.0 percent y/y growth in the cost of sales. The increase in costs was mainly driven by rises in production costs from the cost of materials (+55.9% y/y) and direct overheads (+39.4% y/y).
Indeed, the price of raw sugar was higher by 8.6 percent YTD. Consequently, EBITDA (-18.10ppts y/y) and EBIT (-18.09ppts y/y) margins contracted significantly to 6.6 percent and 4.3 percent in the quarter, respectively, amid a 24.9 percent y/y increase in operating expenses, owing to the currency devaluation in the period.
Net finance costs (+21.0x y/y) surged in the quarter, owing to a 22.5x y/y increase in net exchange losses to NGN102.98 billion (Q1-23: NGN4.38 billion) amid a higher interest charge (+410.3% y/y) on letters of credit.
Overall, the Company posted a pre-tax loss of N106.86 billion in the quarter (vs. a pre-tax profit of N18.53 billion in Q1-23). Following a tax credit of N37.86 billion (vs. a tax expense of N5.73 billion in Q1-23), the loss after tax printed N68.99 billion (vs. a profit after tax of N12.80 billion in Q1-23).
FG extends 2024 licencing bid registration by 10 days
Meanwhile, the Federal Government has announced the extension of the 2024 oil licensing bids by 10 days.
The Chief Executive Officer of Nigerian Upstream Petroleum Commission, Gbenga Komolafe, who shared this in Abuja on Tuesday, said the extension is to allow interested investors to take advantage of the expanded opportunities.
Komolafe explained that in pursuit of the commission’s commitment to derive value from the country’s abundant oil and gas reserves and increase production, the commission has been working assiduously with multi-client companies, to undertake more exploratory activities, acquire more data to foster and encourage further investment in the Nigerian upstream sector.
He added that as a result of additional data acquired concerning deep offshore blocks, the commission has added 17 deep offshore blocks to the 2024 licensing round.
Just a few days ago, the NUPRC announced the commencement of the 2024 Licencing Round at the Offshore Technology Conference in Houston, Texas.
At the event, Komolafe reiterated Nigeria’s commitment to advancing its oil and gas sector, and highlighted incentives by President Bola Tinubu’s leadership aimed at attracting the attention and involvement of international investors.
He explained that the licensing round offers selected blocks, spanning diverse geological formations with great potential for economic growth, and energy security for shared prosperity.
Komolafe also pointed to the regulatory framework anchored by the Petroleum Industry Act 2021, aimed at entrenching fairness and transparency, thereby fostering confidence among investors.
