Daar: Again, Auditors Flag 2017 Loss, N1.25bn Unpaid Salary

Directors of broadcast giant- Daar Communications Plc, on March 29, 2018 presented its audited result for the year ended December 31, 2017, the highpoint of which was the loss before and after tax, which dropped significantly, compared to previous year’s, helped by cost-cutting measures and tax credit adopted by management.
Once again, the company’s external auditors- SIAO (Chartered Accountants) however drew attention to Daar Communications ability to continue in business in the nearest future as shown through indicators such as the loss of N0.79bn, an improvement over the N2.1bn in 2016; while current liabilities exceeded current assets by N3.3bn. The auditors also drew attention to the accrued staff salary of N1.25bn as at December 31, 2017; just as accrued statutory charges namely: pension, Payee and VAT, among others stood at N2.03bn.
Details of the result showed that the revenue of Daar Communications for the period dropped by 0.54% from N3.732bn in the corresponding period of 2016 to N3.712bn, out of which income from the television services, which remained the biggest contributor dropped slightly to N3.119bn from N3.179bn. Radio services income increased from N378.909m in 2017 to N430.791m; followed by the N140.713m from Daar news, up from N118.019m; while the UK operation dropped from N55.884m in 2016 to N21.049m.
Cost of sales fell to N3.102bn, representing a 37.62% slide from N4.973bn recorded in 2016, buoyed by the N2.262bn from television; N434.19m, ratio; N210.256m of Daar news; and N195.28m from the UK operations.
A further breakdown of the cost of sales showed that salaries and wages gulped N938.457m, down from N1.144bn; followed by depreciation of N852.544m, down from N2.148bn; and satellite expenses which declined from N613.65m to N370.379m. Diesel and oil cost for the machines fell to N284.453m from N340.641m; just as programme cost rose slightly to N212.962m from N207.175m; and lighting and electricity, N120.509m, up from N109.884m; among others.
This resulted in gross profit of N609.892m, which was 149.13% better than the N1.241bn gross loss, with the television segment contributing N856.064m, compared to all others that closed in loss, led by the UK operation’s N174.231m; followed by N69.543m by Daar news; while radio closed N3.4m.
Other income for the period climbed 52.08% up from N4.138m to N6.293m; just as selling expenses declined by 56.8% from N171.561m in 2016 to N74.113m. Administrative expenses equally fell by 21.33% to N1.194bn from N1.518bn, bloated by “other admin expenses worth N964.884m, compared with the N1.319bn recorded in 2016; followed by salaries at N223.219m from N181.177m; while operating loss before finance cost reduced by 77.72% from N2.926bn to N652.158m.
Finance income equally plunged from N247.719m to N8.669m, representing a 96.5% decline within the period; at a time finance cost was down 76.57% from N322.062m in 2016 to N75.461m.
Loss before tax reduced by 76.04% from N3.001bn to N718.95m; tax credit was down by 72.45% from N861.641m to N237.365m; following which loss after tax dropped to N481.585m from N2.139bn, translating to loss per share of six kobo from 27 kobo in the corresponding period of 2016.
The year’s loss however raised the retain loss of Daar Communications from N6.129bn in 2016 to N6.611bn at the end of 2017.
Added to this are contingent liabilities totaling N5.506bn in the value of litigations involving the company that were not provided for in the financial statements, but which its solicitors believe the liabilities arising are not likely to be significant.