Dangote Sugar Refinery Plc reported significant profits from its operation sin the 2020 financial year, with records of N29.8billion (Group) and N31.4 billion (Company) profits from the corresponding figures of N22.4billion and N24.1billion respectively in the previous year.
The figures were contained in the Consolidated and Separate Financial Statements for the year ended December 31, 2020 filed at the Nigerian Stock Exchange (NSE) on Monday.
A review of the Group and Company profit and loss account for the year showed a profit before tax of N45.6billion during the year against N29.8billion in 2019 (Group) and N46.04bilion against N34.8billion in 2019 (Company).
With the performance, the Group has proposed basic and diluted earnings of N2.45 per share against N1.87 per share paid in 2019 (Group) and N2.58 per share from N2.01 per share in 2019 (Company).
In reviewing its performance during the year, the directors said the company established in 1999 as a division of the Dangote Group has continued to grow, with current installed capacity of 1.44 million metric tons (MT) per annum with expansion plans in place.
Under a scheme of arrangement between Savannah Sugar Company Limited (SSCL) and Dangote Sugar Refinery Plc (DSR), the directors said a plan to unify the operations of the two companies under one unified entity was completed in September, 2020 to achieve operational, administrative and governance
Besides, the directors said in line with the company’s backward integration project (BIP), a 10-year sugar development plan was embarked upon to raise its production capacity to 1.5 million MT per annum of sugar from locally grown sugarcane.
The Project, the directors said, commenced with the acquisition of large expanse of land in strategic locations such as Niger, Taraba, Adamawa and Nasarawa states and the incorporation of four sugar companies. namely Dangote Taraba Sugar Limited, Dangote Adamawa Sugar Limited, Nasarawa Sugar Company Limited and Dangote Niger Sugar Limited.
Prior to the merger of DSR and SSCL, the Company also commenced the rehabilitation and expansion of SSCL Sugar Factory at Numan towards increasing production capacity by 6,000 tons of cane per day (TCD).
However, due to community dispute over the land acquired in Niger State, the company said decided to close its operations in the State, a process that was completed last December.
On the directive by the Federal Government in Section 39 of the Finance Bill 2020 reversing the provision of Section 432 of the Companies & Allied Matters Act (CAMA) 2020, the company in its Corporate Governance Report criticized the decision.
The CAMA 2020 provides that after 12 years companies can include unclaimed dividends in their profit for distribution to other Shareholders, by ploughing back the funds into its operations to enhance their growth.
But the Finance Bill 2020 has reversed that provision and directed that unclaimed dividends of public listed companies be taken over by the government.
The Finance Bill 2020 makes it an offence for any company that fails to transfer its unclaimed dividend to the Unclaimed Funds Trust Fund to liable to pay up to five times the value of the unclaimed dividends with accumulated interest.
The company in its reaction criticized the directive, saying would negatively impact on the capital market, as it would discourage investment, with significant consequences for the nation’s struggling capital market.
“It is an infringement of the constitutional right to property of the shareholder. The Government should focus more on addressing the root causes of unclaimed dividends, rather than descending to the arena of unclaimed dividend and interfering with the corporate strategy of public companies. The Bill would amount to a breach of the contractual responsibility to pay dividends to shareholders,” the company said.
Citing Principle 23 of the Nigerian Code of Corporate Governance 2018 (NCCG), which provides for the “Protection of Shareholder Rights”, Dangote Sugar said the right to dividend by the shareholders is one of the rights that companies and stakeholders must protect.