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Milestone: Dangote Sugar, Most Capitalised Company

Category: Daily & Weekly Market Updates

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Milestone: Dangote Sugar, Most Capitalised Company

April 05, 2007 4:44PM / The Analyst


History was made on Wednesday when Dangote Sugar Refinery which had earlier nudged to second position of most capitalised company breasted the tape to beat FirstBank to become the most capitalised company on the Exchange.

At the end of trading on the floor of the Nigerian Stock Exchange (NSE) yesterday, Dangote Sugar Refinery Shares appreciated from the previous day price of N38.52 per share to N40.44k

And with 10 billion units share of the company outstanding, it has emerged as Nigeria\'s most capitalised company with market capitalisation of N404.4 billion as against Tuesday trading of N385.2 billion, gaining a record 5 percent at a single day\'s trading which according to Mr Sola Oni, Senior Manager, Corp-orate Affairs of the Nigerian Stock Exchange is \"the highest any company can gain in a single day\'s trading.\"

Speaking with THISDAY, a capital market operator attributed the company’s phenomenal share appreciation to "a measure of the confidence investors have in the company for it to appreciate that much. It shows its Shares are in good demand by the public. They have confidence in its management".

Dangote Sugar initially had a market capitalisation at listing of about N180 billion, quickly rising to N404.4 billion after only 19 days of trading with share price rising by over 125 percent. the company according to analysts, may have achieved a milestone as arguably the fastest appreciating stock ever listed on the Exchange.

During its public offering, the company offered three billion units of 50 kobo shares at N18 per share, an offer that was over-subscribed by about 40 percent with excess subscription duly returned back to investors with interest.

Dangote Sugar Refinery imports raw sugar from Brazil and refines it in Nigeria for both domestic and industrial use. The company plans to commence export of fully refined sugar from Nigeria to other parts of the West African sub-region in the shortest possible time.

The company has an installed capacity of 4,000 tonnes per day which adds up to about 1.4 million tonnes of refined sugar per annum.

Dangote Sugar Refinery is also one of the first companies in Nigeria to pay a dividend of about N1.15k to all its shareholders, including those that have held the company\'s share for barely three months.

At the end of the 2006 operating year, the company recorded a turnover of N83.7 billion and a remarkable profit margin of N16.65 billion. Analysts believe that such performance ratio is unprecedented in the history of companies in the Nigeria Stock Exchange.

The company also boasts of over 110,000 new shareholders. About 30 percent of Dangote Refinery\'s equity are owned by the public, while Alhaji Aliko Dangote, President/CEO of Dangote Group maintains a controlling stake of 70 percent.

Reacting to the company\'s performance, Mr Uzo Nwankwo, Group Executive Director Corporate Finance, maintained that excellent management was responsible for the company\'s glowing performance. \"We have an excellent management and fundamentally, we have a strong company with good cash flow and very little debt. People see value in the company and have therefore built confidence in it.\"

He disclosed that offshore investors accounted for over 30 percent of the IPO.

Nwankwo further stated that Dangote Group\'s offer to the public to invest in its shares is premised on the company\'s philosopy of sharing wealth to the investing public, adding that the group\'s successes in its business ventures are a testimony to the sterling management quality of its driving force in the person of Alhaji Aliko Dangote. He revealed further that the company plans to pay first quarter dividend to its shareholders by April in addition to N1.15k dividend already promised. ThisDay

Dangote Sugar Refinery continued yet again with another maximum price lift to close at a new year high of N42.46, closing bids for the day (if it subsists till next week) puts in a good position for appreciation for another trading session.

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