DANGOTE SUGAR REFINERY PLC - Earnings flat y/y despite volume rebound in Q4
​DANGSUGAR reported a 7% y/y revenue growth for FY’15 driven by a 0.1% volume growth and an 8% average price increase. More interesting was the surprisingly material volume rebound in Q4 (54% q/q), supported by a significant 28% price cut in September (implemented to counter lower priced smuggled sugar). Gross profit came in 11% higher for the year with a 90bps y/y gross margin improvement to 20.5% (Vetiva estimate: 24.7%). However, growth in profit before tax came in slower at 8% y/y as interest expense, lower other income undercut efficiency gains in operating costs. Overall, a hike in the effective tax rate cut Profit after tax 1% y/y.
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