Directors of the Nigerian Aviation Handling Company (NAHCo), last week presented its delayed audited financials for the year ended December 31, 2018, showing that the effect of a rise in revenue was paled by the rising operating costs. The impact of this was worsened by the company’s tax expense of N306.443m for the period, as against a tax credit of N175.756m in the corresponding full year of 2017.
These resulted in a significant 74.63% decline in net profit, despite which the board recommended a dividend of 25 kobo per share (same as the prior year), more than double the 12 kobo Earnings Per Share for the period, which means the directors depleted the company’s reserves.
According to the result, revenue for the period rose by N1.899bn or 23.96% from N7.926bn to N9.825bn, boosted by the N5.392bn earnings from passenger/aircraft handling, up from N4.471bn; and the N3.767bn from cargo handling, as against the N2.96bn recorded in 2017. Operating costs increased by N1.049bn or 18.72% to N6.656bn, compared to the previous N5.606bn. This resulted in a gross profit of N3.169bn, up by N849.79m or 36.64% from N2.319bn to N3.169bn.
The company suffered N363.705m or 58.01% decline in other income, which stood at N263.257m from N626.962m in the corresponding period of 2017. The drop resulted from the realized foreign exchange gain of N130.002m in the prior year, which did not exist in 2018, as well as a nil impairment allowance recovery, compared to N38.293m in 2017; just as rental income from investment property dropped from N195.753m to N141.451m; while sundry income fell from N200.731m to N122.715m. Also, profit on disposal of property, plant, and equipment dropped to N242,000 as against the N3.515m in 2017.
Administrative expenses increased by N615.12m or 26.57% from N2.315bn to N2.93bn; profit from operations, therefore, dropped by N129.035m or 20.44% from N631.393m to N502.358m.
Finance costs dropped to N169.776m from N213.066m; finance income increased to N220.679m, from N181.684m, lifted by the interest income on fixed and bank deposits, which rose from N150.163m. Operating profit dropped from N600.011m to N553.261m. The company recorded an expected credit loss of N50.024m.
Profit before tax dropped by N96.774m or 16.13% from N600.011m in 2017 to N503.237m; just as after-tax profit came to N196.794m, N578.973m, or 74.63% drop from the prior year’s N775.767m. The net profit represented 12 kobo Earnings Per Share, compared to 48 kobo in 2017.