By Bamidele Famoofo
WorldStage– Dangote Sugar Refinery ( DSR) Plc , Nigeria’s biggest sugar company and leading supplier of sugar in Sub-Saharan Africa, recorded a 5.6 percent y/y decline in revenue in second quarter of 2026 (H1-26: -8.9% y/y), reflecting a weaker-than-expected recovery in domestic sugar demand as the benefits from prior pricing actions continued to fade.
The decline was driven almost entirely by the core 50kg sugar business, which contributed 97.7 percent of group revenue and recorded a 4.7 percent y/y decline in sales (H1-26: -8.5% y/y).
Meanwhile, the Retail sugar and Molasses segments remained under pressure, with revenue declining 32.2 percent y/y and 39.0 percent y/y, respectively, although together they accounted for just 2.2 percent of group revenue and had a limited impact on overall performance.
Sequentially, revenue increased 8.6 percent q/q, driven almost entirely by a 9.5 percent q/q increase in 50kg sugar sales, which accounted for 97.7 percent of Q2 revenue. The sequential improvement more than offset weaker Retail (-21.0% q/q) and Molasses (-12.6% q/q) sales, suggesting a modest recovery in the group’s core business.
Gross margin expanded by 526bps y/y to 24.9 percent (H1-26: +11.94ppts to 24.0%), as the 11.8 percent y/y decline in cost of sales outpaced the 5.6 percent y/y decline in revenue.
Consequently, EBIT and EBITDA margins improved by 631bps y/y and 905bps y/y to 22.7 percent and 28.6 percent, respectively (H1-26: +14.62ppts and +17.52ppts to 23.5% and 29.5%), reflecting a meaningful improvement in operating leverage, supported by broadly contained operating expense growth (+8.0% y/y).
Net finance costs declined by 40.3 percent y/y to N20.68 billion (H1-26: -23.6% y/y), driven by a 37.4 percent y/y reduction in finance costs.
The improvement reflected lower financing requirements, evidenced by a 53.1 percent y/y decline in letter of credit charges and a 48.9 percent y/y reduction in overdraft interest expense, supported by stronger operating cash generation.
Consequently, profit before tax rebounded to N23.40 billion in Q2-26 from N1.04 billion in Q2-25, bringing H1-26 PBT to N44.09 billion versus a loss before tax of N21.60 billion in H1-25. Accordingly, profit after tax improved to N22.36 billion from a loss of N0.11 billion in Q2-25, with H1-26 PAT reaching N41.51 billion compared with a loss of N23.76 billion in H1-25.
“Dangote Sugar delivered a strong recovery in profitability in Q2-26, as improved operating leverage and lower financing costs more than offset continued topline weakness. Looking ahead, with the benefits of prior pricing actions continuing to fade, we expect earnings growth to become increasingly volume-driven, while sustained cost discipline and stronger operating cash generation should support margin resilience,” Cordros Research said in a report.
