DANGSUGAR Declares N16.71billion PAT in Q3 2018 Results (SP:N14.30k)

Wednesday, October 31, 2018 04.55PM / NSE

CLICK HERE TO VIEW MORE

Initial Reaction – FBNQuest 

Implications: All key line items on the P&L declined y/y. Although we were expecting a tough quarter for the company the magnitude of the topline decline surprised negatively. Q3 sales were down -26% y/y to N32.7bn while PBT fell by around -55% y/y to N6.3bn. Additionally, gross margin contracted by -1211bp y/y to 20.8% indicative of subdued prices as DSR attempts to win back eroded market share. Compared with our estimates, Q3 sales and PBT both missed by -22% and -46% respectively. On an annualised basis, 9M PBT of N26.2bn is currently tracking well behind consensus’ full year PBT 2018E estimate of N40.1bn. Therefore, we expect downward adjustments to consensus forecasts on average and a negative reaction by the market to these numbers.

Positives: Operating expenses declined by around -6% y/y and -17% q/q to N1.9bn

Negatives: All key line items on the P&L declined both on a y/y and q/q basis. Gross margin also contracted by -1211bp y/y and -952bp q/q to 20.8%.

Year-to-date, DSR shares have shed -28.5% vs. the NSE ASI’s -13.8% performance.

Rating: We rate the stock Neutral. Our estimates are under review.

Dangote Sugar Refinery Q3 2018 results vs. FBNQuest Capital Research estimates (N millions)

Source: NSE, FBNQuest Capital Research estimates

Related News

1.       DANGSUGAR Announces the Resignation of Engr Abdullahi Sule as Group Managing Director

2.      DANGSUGAR Appoints Mr.Ravindra Singh Singhvl as Chief Operating Officer

3.      DANGSUGAR H1 2018 Results- Losing Competitiveness to Border Sneak

4.      DANGSUGAR Declares N12.72bn PAT in Q2 2018 Results,(SP:N17.70k)

5.      DANGSUGAR Appoints Engr Abdullahi Sule as Group Managing Director