Background
Nigeria Ropes plc was incorporated in Nigeria in March 1960, as an associate member of BRIDON plc, a world leader in the manufacturing of ropes and cordage technology.
The company is in co-operation with other certified local manufacturers constantly reviewing local raw material development, in line with Federal Government’s reform programme in promoting indigenous manufacturers.
Nigeria Ropes has 263.67 million shares outstanding with shares outstanding of N188.04 million as of March 31, 2014.
Financial performance for Q1 2014
Nigeria Ropes recorded an impressive top-line performance in the first three months of the year buoyed by focus strategy and resilient market penetration on the part of management.
However, due to huge operating costs the company was unable to translate top-line performance to bottom-line growth.
For the first three months of the year, Nigeria Ropes surged revenue by 69.63 percent year-on-year to N99.54 million from N58.68 same period in the prior year (Q1 2013)
As a result of huge operating cost and hash economic environment, the company posted a loss before tax of N32.49 million in the review period.
Based on BusinessDay investigations, low patronage from oil and gas firms that are the company’s core business, contributed to the slow growth in the review period.
A speedy passage of the Petroleum Industry Bill (PIB ) will reposition the oil industry and will also help boost Nigeria Ropes top-line and bottom-line performances.
In order to put the company on a growth trajectory, and place it on a global competitive arena, the company has embarked on an aggressive expansion into the Ghana market with a view to forming a joint venture.
Despite the challenges befalling the company, it was able to reduce cost-of-sales margin to 64.26 percent in 2014, from 78.78 percent in 2013, while gross margin increased to 35.72 percent in 2014, as against 21.39 percent in 2013.
The company has also created an inspection and specification department for its lifting equipment. The new department contributed over 70 percent to 2014 revenue. Total assets in the review period fell slightly by 1.81 percent to N723.71 million compared with N737.08 million as of Q1 2013.
Finance costs surged by 116.1 percent to N17.2 million in Q1 2014, compared with N7.95 million as of Q1 2013.
The company has a product liability cover of over 80 million, which is yet to be matched by any local competitor.
The company’s shares closed at N7.46 million on the floor of the Nigerian Stock Exchange on Friday, while market capitalisation stood at N1.96 billion.
BALA AUGIE
