Yemisi Izuora
John Holt Nigeria Plc said its operating profit is N1.63 billion for the year ended September 30 2015.
The figure shows an 18.50 percent reduction from N2 billion the previous year. The company with interest in businesses ranging from engineering, leasing, trade and distribution said that the devaluation of the naira was a drain on bottom lines since most of its raw materials and equipments are imported.
“Because we are an import dependent company, we had N500 million wiped out because of devaluation,” said the company in a statement.
The company is now seeking investment in businesses that are less import dependent as devaluation of the naira remains a drain on bottom lines.
Sales were down by 13.87 percent to 2.43 billion in 2015 as the company embarked on aggressive market penetration and expansion strategy with a view to consolidating its share of the market.
“Although, the company and its subsidiaries made a loss before tax of N171m compared to profit before tax of N427m last year, N528m was exchange loss suffered as a result of the devaluation of Naira. Sales were also negatively affected by the tension and uncertainty associated with the 2015 general elections and the subsequent lull in the economy after the elections,” the company said.
The conglomerate giant attributed the fall in revenue to the crash in crude oil price which negatively affected revenue from oil and gas clients.
Despite infrastructure deficits such as bad roads and huge energy costs that spiral up operating expenses of companies in the country, John Holt was able to reduce costs as administrative expenses fell by 20.10 percent to N682 million in 2015 from N856 million in 2014.Distribution expenses were down by 20.30 percent to N856 million.
The company spent less money on operating expenses to generate every unit of product as operating expense margin fell to 43.21 percent in 2015 from 48.10 percent in 2014.Cost of sales was down by 3.80 percent to N1.77 billion. The slow growth in sales was attributed to reduced patronage from major customers in the oil and gas industry that got hit by the oil price crash.
John Holt’s debt to adjusted capital ratio fell to 43 percent in 2015 as against 51 percent in 2014. Finance cost dipped by 7.60 percent to N231 million. The decrease in the debt to adjusted capital ratio for the Group during the year resulted primarily from decrease in debt by N400 million from N1.8 billion in 2014 as against N1.4 billion in 2015, according the company’s 2015 audited financial statement.
“This was as a result of settlement of FBN loan and liquidation of import finance liabilities,’ the company stated.