SAHCO Plc Rebounds, Nets N171.5m Profit, Despite 78.54% Tax Expense Rise

The management of Skyway Aviation Handling Company Plc, on Tuesday, gave shareholders reasons to cheer, when it submitted its half-year unaudited financials ended June 30, 2019, which showed a return from the woods. The result showed that the Basil Agboarumi management returned the company which was recently listed by introduction on the Nigerian Stock Exchange (NSE) to profit, despite the 78.54% rise in income tax expense for the period under review.
Revenue rose by N666.973m or 23.45% from N2.843bn in the 2018 half-year to N3.51bn, the lion’s share of which was generated primarily from foreign and domestic handling and cargo handling at N3.402bn, compared to N2.79bn in the 2018 half-year. The remaining N108.307m came from investment property rental income, compared to the previous N54.408m.
A further breakdown showed that cargo handling income remained its biggest money-spinner, accounting for N1.886bn, up from N1.525bn, followed from afar by the N587.151m from foreign handling, which fell from N656.728m; just as domestic handling income dropped from N333.936m to N288.272m. The numbers were however helped by the growth in ad-hoc handling income from N6.039m to N270.009m; among others.
Direct cost rose by N283.63m, a slower 16.52% from N1.716bn to N2.0bn, chief of which was the depreciation cost of N737.318m from N525.939m; followed by direct labour cost of N667.22m, as against the N575.961m of 2018; while concession fees increased from N111.515m to N180.005m. Gross profit, therefore, stood at N1.51bn, after rising by N383.343m or 34.02% from N1.126bn.
Other operating income soared from N364,000 to N32.474m; with N21.627m income from the sale of scraps, foreign exchange gain stood at N6.09m; while finance income soared to N4.757m from N364,000. Finance expense rose to N58.676m, compared to N48.791m, the lion’s share of which was the interest on loan and overdraft at N51.333m, up from N37.47m; while bank charges dropped from N11.32m to N7.343m.
Administrative expenses dropped to N1.145bn from N1.211bn, buoyed by the N431.245m expenses on employee benefit, from N376.066m, followed by N222.877m on depreciation and amortization, compared to N229.25m in 2018.
Operating profit for the period, therefore, stood at N338.386m, as against the previous N133.615m loss; just as tax expense climbed by N73.413m from N93.47m in 2018 to N166.883m. Net profit, therefore, stood at N171.503m, despite posting N58.216m loss in the three months between April 1, and June 30, 2019; compared to the N227.085m loss in the first six months of last year, which translates to earnings per share of 13 kobo, from a loss of 17 kobo in the corresponding period of last year.
In the 12 months of 2018, Sahco Plc posts a loss after tax of N665.649m or 49 kobo per share, even as analysts hope that the management will sustain and even improve on the trajectory into the remaining half of the year. Luckily also, the company enjoys robust retained earnings of N4.583bn, up from the N4.784bn at the end of its full-year last December.