Riding on improved productivity and efficiency, the overall performance and outlook of Cement Company of Northern Nigeria (CCNN) plc seems positive.
Taking a cue from its audited report and accounts for the year ended December 31, 2013, it showed gross and pre-tax profit margins improved from 28.1 percent and 10.9 percent, respectively, in 2012, to 31.8 percent and 12.5 percent in 2013.
Amid the difficult operating environment facing the company as characterised by the lingering insurgency in the Northern market and the epileptic power supply, the performance of CCNN shows a reassuring outlook.
The company’s total sales reached a new high at N15.8 billion in 2013, compared with N15 billion in 2012. Cost of sales meanwhile slipped marginally from N10.88 billion to N10.77 billion.
Gross profit rose by 18 percent from N4.24 billion to N5.02 billion. Operating expense was curtailed at N3.64 billion in 2013, as against N3.40 billion in 2012. While non-core business income dropped by 22 percent from N958 million to N743 million, the reduction in interest expenses counterbalanced the negative effect. Finance expenses dropped to N147 million as against N152.
Profit before tax rose by 19.2 percent to N1.97 billion in 2013, as against N1.65 billion in 2012. Profit after tax also grew by 19.1 percent to N1.42 billion, compared with N1.20 billion in the previous year. Basic earnings per share thus improved from 95 kobo to N1.13.
CCNN’s total assets had increased by 5.7 percent from N14.24 billion in 2012 to N15.06 billion in 2013. The paid up share capital remained unchanged at N628 million while shareholders’ funds grew by 18.6 percent to N9.06 billion, as against N7.64 billion in previous year.
Analysts say that with the growth initiatives the company and the positive industry outlook of the cement industry, there is reasonable basis to assume that CCNN would sustain improved performance in the years ahead.
With more than 35,000 shareholders holding CCNN’s shares, amid 19 percent increase in profit after tax, the company has put aside N880 million as cash dividends to shareholders for the 2013 business, implying a dividend per share of 70 kobo.
With about 46 percent decline in bank loans, current liabilities dropped by about 19 percent. This reduced the company’s total liabilities by 9.2 percent.
The company’s financing position showed low financial leverage and significant improvement in equity funding. The company’s debt-to-equity ratio dropped from 15.9 percent in 2012, to 7.5 percent in 2013.
Already, the interim report and accounts of CCNN for the six-month period ended June 30, 2014, showed that sales rose by 7 percent in first half 2014, to N9.39 billion as against N8.81 billion recorded in corresponding period of 2013. Profit before tax almost doubled from N1.22 billion to N2.34 billion.
Profit after tax showed similar performance, rising from N832.1 million in first half 2013 to N1.59 billion in first half 2014.
Iheanyi Nwachukwu
