Chams Nigeria plc has recorded an 81.40 percent increase in third quarter (Q3) sales as the smartcards maker also reverted to profitability amid challenging operating environment.
For the first nine months through September 2014, the company’s revenue surged by 81.40 percent to N1.93 billion from N1.06 billion the same period of the corresponding year (Q3) of 2013.
The growth in the company’s sales was driven by the spiralling demand for smartcards technologies and telecommunications devices by the education, banking and government institutions.
It is expected that the increased demand for smartcard by the National Identity Management Corporation (NIMC) will drive the growth of Chams. The identity management agency is working assiduously to ensure that more Nigerians are captured in the scheme.
The company reverted to profitability when it posted a profit after tax (PAT) of N86.84 million, as against the loss of N614.63 million it posted last year, despite increase in operating expenses.
Operating expenses in the review period rose by 42.90 percent to N1.22 billion in Q3 2014, compared with N853.74 million the preceding year.
Aside costs incurred in the expansion of operations across a wide spectrum, the challenging environment such as bad roads, unstable power supply and volatile exchange that impacts on raw materials, swell production and administrative costs of Chams.
Despite the aforementioned impediments, the company was efficient as operating expenses margin reduced to 63.21 percent in Q3 2014, from 80.21 percent the preceding year.
Additionally, cost of sales margins dropped to 41.22 percent in 2014, from 67.3 percent the preceding year, while costs of sales increased by 8.32 percent to N799.44 million.
Champs also reduced the debt portfolio in its capital structure as debt to equity ratio were down to 14.81 percent as against 37.14 percent last year, while total borrowings in the balance sheet reduced by 44.96 percent to N810.67 million.
Total equity increased by 39.92 percent to N5.46 billion in the period under from N3.90 billion buoyed by a 45.03 percent increase in capital reserve.
The automation of payment system, being driven by the Central Bank of Nigeria (CBN), and with general buy-in from major public and private stakeholders, analysts say will be another growth driver for Chams.
Incorporated in 1985, as a private limited liability company, Chams converted to a public limited company in 2007, and listed its shares on the Nigerian Stock Exchange (NSE) in 2008, by way of introduction. Chams plc and its subsidiaries offer complete end-to-end solution to small and large projects in the areas of identity management, payments, collection and transactional systems, as well as providing digital platform and ICT trainings.
The company’s share price closed at N0.50 on the floor of the NSE, while market capitalisation was N2.34 billion.
BALA AUGIE
