by DSRNews DSRNews

Capital market analysts have said that investors in Dangote Sugar Refinery Plc will continue to enjoy benefits of their investments in the company as the fundamental of the company remains strong. Analysts at United Capital said that Dangote Sugar is a good stock for investors, recommending a buy rating and Target Price (TP) of N21.70. They explained that their ‘‘investment case is premised on Dangote Sugar’s strong positioning in the thriving consumer goods space and execution of strategy to consolidate market position and sustain margins.” They forecast full year 2018 average revenue growth rate of 12.8 per cent and earnings per share of above nine per cent. ‘‘The key drivers to the growth will include, favorable macro environment and demography; Dangote Sugar’s low leverage relative to peer average; potential upside from currently low capacity utilization and huge margin prospects from ongoing backward integration programme. “The outlook for Dangote sugar is hinged on its ‘Sugar for Nigeria Project that was embarked on in 2012, with the goal of achieving the capacity of producing 1.5million tonnes of refined sugar from locally sourced sugar cane over the span of 10 years. “This was not just to enable the company become a fully integrated sugar business but to also eliminate high cost of imported raw material and enhance the capacity to serve local and export markets. In addition, as an offshoot of running an integrated sugar business, the company plans to source power in-house from bagasse and produce fuel ethanol, animal feeds from bagasse and bio-fertilizer from sugar mud-cakes,” the analysts explained. Dangote Sugar Refinery increased dividend paid to shareholders for the 2017 by 192 per cent to N21 billion or 175 kobo per share  from N7.2 billion or 60 kobo per share in 2016, which is in line with its resolve to deliver decent returns on investments.
LEADERSHIP PAGE 31, JULY 17, 2018.