H1’20: NAHCO Suffers N143.2m Loss on Rising Selling, Admin Costs

NAHCO H1 loss

By Dipo Olowookere

One of the main aircraft, cargo and passenger handling companies at the nation’s airports, the Nigerian Aviation Handling Company (NAHCO) Plc, suffered a N143.2 million loss in the first half of 2020.

This was against the net profit of N467.3 million the firm declared in the corresponding period of last year.

This loss was mainly impacted by the COVID-19 pandemic, which wrecked the aviation industry worldwide especially in the second quarter of the year.

Business Post observed that NAHCO recorded a loss in the period under review despite receiving a tax credit of N36.8 million.

In the period, it had a loss before tax of N180.0 million versus the profit before tax of N580.0 million in the first six months of 2019, while its earnings per share (EPS) closed at -9 kobo in contrast to 28 kobo in H1’19.

A look at the top line of the financial statements for the period ended June 30, 2020, showed that the revenue generated declined to N3.6 billion from N4.8 billion due to a decline in the passenger/aircraft handling to N1.4 billion from N2.6 billion and reduction in the leasing to N78.9 million from N123.8 million.

However, there was an improvement in the revenue generated from cargo handling to N2.0 billion from N1.9 billion.

According to the results, the operating costs were pruned to N2.7 billion from N3.2 billion majorly from payroll costs, concession, diesel, electricity and spares as well as licence renewal and at the close of business on June 30, 2020, the company’s gross profit went down to N931.9 million from N1.6 billion.

With an almost flat other income of N105.9 million and higher selling and administrative expenses of N1.3 billion versus N1.1 billion in H1 2019, NAHCO was left with a loss from operations of N282.8 million in contrast to a profit of N591.7 million a year earlier.

The increase in the selling and administrative costs was caused by the higher directors’ remuneration, laundry & cleaning, repair & maintenance, board expenses, entertainment, medical costs, audit fee, depreciation/amortization and others.

Furthermore, the company said it grew its finance income to N146.7 million from N86.5 million, while the finance costs dropped to N43.8 million from N73.6 million.

On its balance sheet, the total assets reduced to N14.6 billion from N14.7 billion in FY 2019, while the total liabilities were flat year-to-date at N8.1 billion.

In the period under review, the loans and borrowings reduced year-to-date to N229.7 million from N440.1 million, while the retained earnings dropped to N3.9 billion from N4.0 billion in FY’19.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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