Construction giant Julius Berger Nigeria Plc said its after-tax profit for full-year 2020 fell to N1.357 billion, an 84.5 per cent fall from the figure posted in the same period of 1999, as the pandemic outbreak upset operations and shrank earnings, setting in motion its weakest profit in four years.
Revenue was down by 9 per cent, sliding from N264.557 billion to N242.458 billion, its unaudited earnings report published by the Nigerian Stock Exchange (NSE) on Wednesday showed.
Cost of sales, much as declining by 3.62 per cent to N198.844 billion, consumed more than 82 per cent of revenue, substantially paring down the earnings of the firm that operates in a sector known for heavy production expenditure.
Pre-tax profit stood at N4.123 billion, 72 per cent weaker than the N14.685 billion reported for 2019.
Profit after tax plunged from N10.304 billion to N1.357 billion, well below a three-year pre-pandemic average of N5.793 billion.
Julius Berger declared in April it was cutting its dividend for FY2019 to N2 per share from a previously announced N2.75 after board evaluation of the potential weight of the coronavirus crisis on business in the short term.
As a buffer against hard times, Julius Berger said in September it would branch out into agro-processing, venturing into a subsector starkly different from its primary construction business in a move the board remarked had been informed by “the emerging developments, political, economical and structural in Nigeria and the resultant reforms by the governments.”
“The Board of Directors and the Executive Management strongly believes that this diversification direction will strongly support the continued success of the Group in the future and will align with the strategic objective of the Government to stimulate value creation in Nigeria,” the company said in its annual report to the NSE.
Underscoring the importance of the Nigerian market, the firm generated N237 billion from Nigeria and only about N5 billion from Europe and Asia, bringing its total revenue for the year to N242 billion.
Shareholders’ fund grew marginally by 4.5 per cent to N45.285 billion from N43.337 billion.
Billionaire mogul Mike Adenuga wields the hugest stake of 19.87 per cent through Goldstone Estates Limited, ramping up its holding to nearly one-fifth of the company’s issued shares after acquiring 9 per cent stake from Germany’s Bilfinger Berger in 2014.
Julius Berger first set foot in Nigeria in 1965 after it won a deal to build Lagos’s Eko Bridge for N31.2 million, giving it the impetus needed to gain traction in the Nigerian market. It attained incorporation status in 1970.
Shares in the company closed trade in Lagos on Thursday at N22.65 per unit, up by 9.95%.
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