Vitafoam Increases Dividend Payout Amid 2.2% Drop in Net Profit

By Dipo Olowookere

Shareholders of Vitafoam Nigeria Plc will earn more cash rewards for the 2022 fiscal year as the board has increased the dividend payout for the period under consideration.

In the 2021 accounting year, the board paid N1.50 as the final dividend for each stock of the company held by investors and this year; this has been raised by 1.33 per cent to N1.50 despite the fact that the firm recorded a shortfall in its net profit.

Analysis of the financial statements of the organisation for the year ended September 30, 2022, indicated that the pre-tax profit decreased by 1.4 per cent to N7.2 billion from N7.3 billion in the 2021 fiscal year, while the post-tax profit moderated by 2.2 per cent to N4.5 billion from N4.6 billion.

Business Post reports that Vitafoam declared lower profits in the reporting year despite improving its earnings as the revenue generated in the period under consideration surged by 30.8 per cent to N46.3 billion from N35.4 billion.

The driving force for this improvement was the sale of its products to customers, which raked in N44.7 billion in FY 22 compared with the N34.2 billion achieved in FY 21.

Also, earnings from freight income improved in the year under review to N1.6 billion from N1.2 billion.

In the year, the cost of sales gulped N30.9 billion, in contrast to N21.7 billion in the preceding year, due to the higher cost of raw materials for its products and higher costs for manpower and manufacturing expenses.

This left the firm with a gross profit of N15.4 billion versus N13.7 billion in the 2021 accounting year.

Also, the company reported higher administrative expenses in the 2022 financial year as it stood at N6.8 billion as of September 30, 2022, in contrast to N4.5 billion as of September 30, 2021, as a result of more funds allocated to advertising, donations, personnel costs, entertainment, exchange loss, insurance, electricity/other utilities, transport/travelling, security and others.

These elevated expenses impacted negatively on the operating profit of Vitafoam as it closed at N6.9 billion in FY 2022 versus N7.9 billion in FY 2021.

The company disclosed in its financial results that it earned N998.6 million from finance income compared with N254.9 million in the corresponding fiscal year, while finance costs gulped N705.0 million in FY 22 compared with N852.5 million in FY 21.