Analysts raises questions over an unexplained N43.78 million difference in finance cost of Cement Company of Northern Nigeria plc (CCNN), after the company claimed a cost of N28.8 million in finance cost for the period 9 month ended 2018.
This represented a significant drop in finance cost by 74.42 percent against N122.66 million recorded in the corresponding period of 2017.
BusinessDay analysis of CCNN financial report which was released on Monday showed that the significant drop in finance cost recorded amongst other factors, saw profit after tax (PAT) for the period double from N2.04 billion in 2017 to N4.01 billion in 2018.
However, a critical look into CCNN’s note to account on relevant information on the decline in finance cost revealed quite a different entry.
According to note to account 19 of the financial report, finance cost recorded for the period ended 9 month 2018 amounted to N72.598 million against N28.8 million recorded in its income statement.
Damola Jolaosho, Fellow Institute of Chartered Accountants of Nigeria, “this is a clear error in the financial statement of CCNN. A look into other entries shows consistent figures, however, the finance cost shows a significant disparity”.
“It rather unfortunate that despite critical review and preparation of the financial report, such a mistake cannot be spotted. This should be taken on the account and finance department of the organisation”.
Based on this figure, the note to account showed a decline of just 36 percent in finance cost. According to breakdown, interest on loan declined 54 percent to N41.75 million. Meanwhile, bank charges increased 41 percent to N30.84 million.
If N72.598 million in finance cost is taken into consideration, this will increase total expenses by N43.78 million to N2.96 billion.
Meanwhile, actual PAT will be N3.966 billion which will represent a 94.8 percent growth in PAT against 96.9 percent growth recorded in the income statement of CCNN.
According to data pooled from Bloomberg, stock performance of CCNN on Monday stood as the third best performing stock. Prices were up 9.24 percent to N17.15.
BusinessDay analysis of CCNN year to date performance shows that the company’s stock price has grown 65.26 percent.
