A surge in finance income has underpinned Beta Glass Plc’s full year profit as the Nigerian glass maker continues to use price adjustments, exposure to the export market to drive growth.
The company has been recording double digit growth in revenue amid recession in 2016 while delivering returns to shareholders.
For the year ended December 2017, Beta Glass’ net income spiked by 8.44 percent to N4.11 billion in December fromN3.79 billion as at December 2016.
The growth in profit was driven by a 245 percent surge in finance income to N1.26 billion as at December 2017, making up for an 81.98 percent drop in foreign exchange gains to N344.11 billion in the period under review.
The company made N1.913 billion foreign exchange gain in 2016 owing principally to its consistent export sales to Cameroon, Cape Verde, Gambia, Ghana, Guinea, Liberia and Sierra Leone.
Sales were up by 16.18 percent to N22.18 billion as at December 2017; mainly driven by price increases in response to inflationary trends and partly by volume increases in order to offset the rising input costs.
Cost of sales increased by 11.82 percent to N19.09 billion as at December 2017 from N15.14 billion as at December 2016.
This compares to the 21.12 percent year on year increase in cost of sales between 2016 and 2015 financial year.
Cost of sales ratio fell to 76.33 percent in December 2017 from 79.30 percent the previous year. This means the Nigerian glass maker is spending less on input costs to produce each unit of product.
Analysts say the trend in costs show the introduction of the foreign exchange policy in mid-2017 made dollars available for Beta Glass and other manufacturers to import raw materials after 15 months of dearth of dollars.
The combination of foreign exchange policy and a rebound in oil production and price help the country exist its first recession in 25 years.
The gross domestic product of Africa’s largest oil producer expanded for three straight quarters last year after a 1.6 percent contraction in 2016, with year-on-year growth reaching 1.9 percent in the final three months of 2017.
The Manufacturing Purchasing Managers’ Index (PMI) in the month of March stood at 56.7 index points, Central Bank of Nigeria (CBN) disclosed yesterday.
According to experts, the expansion indicated a growth in the manufacturing sector for the 12th consecutive month.
Beta Glass is efficient while providing services compared to competitor as profit margin has improved.
Gross profit margin increased to 23.62 percent in December 2017 from 20.64 percent as at December 2016. This means the company earns 50 kobo on the Naira in gross margin.
Beta Glass is a subsidiary of Frigoglass Industries Limited, exporting glass packaging materials to 13 countries. The company has manufacturing plants in Ughelli, Delta State, and Agbara, Ogun State, with three furnaces that exceed 600 tons of produced glass containers per day.
BALA AUGIE
