Dangote Sugar Refinery Plc, Nigeria’s biggest producer of the sweetener by market value, fell to the weakest on record after reporting a 49 percent drop in nine-month profit.
The stock lost 4.9 percent to 5.40 naira by 12:27 p.m. in Lagos, Nigeria’s commercial capital. A close at this price will be its lowest since March 2007, when the shares started trading.
Net income retreated to 4.4 billion naira ($28 million) in the nine months through September from 8.57 billion naira a year earlier, the company said in a statement published on the website of the bourse yesterday.
“The poor earnings were spurred by higher rebates management may have granted to its key clients and distributors as an incentive for higher purchase volumes,” Bunmi Njugo, a Lagos-based analyst with Stanbic IBTC Bank Plc, wrote today in a note e-mailed to clients.
Higher raw-sugar prices also increased the company’s costs, she said. International sugar prices rose 8.2 percent in the first six months of the year. Dangote imports about 95 percent of its raw materials, according to Njugo.