Nahco Aviance profit falls on rising costs

The third quarter profit of Nigeria Aviation Handling Plc (Nahco Aviance) has been hit by rising costs as the Nigeria cargo dealer continues to grapple with foreign exchange volatility and drop in export/import.

For the first nine months through September 2015, NAHCO’s net income fell by 10.58 percent to N536.36 million as against N599.82 million last year.

The slow growth in profit was due to a significant rise in costs in the period under review. Cost of sales moved by 9.27 percent to N4.14 billion in 2015 from N3.76 billion the previous year.

The company’s distribution and administrative expenses however reduced by 15.50 percent to N1.60 billion in 2015 as against 1.85 billion in 2014. This is in spite of an increase in staff strength and purchase of utility vehicles to distribute cargoes within airport around the federation.

NAHCO however recorded stellar performance at the top lines as sales increased by 4.91 percent to N6.31 billion in 2015 from N6.0 billion last year.

As expected, the company’s core businesses of Air craft handling, Cargo handling, Passenger handling and Crew transportation continues to be a major driver of earnings.

In order to surmount the macro headwinds caused by foreign exchange volatility and drop in import , NAHCO is expanding its activities as the company will soon start running Osubi Airport in Delta.

The company only just recently signed an MoU with Shoreline Group, the airport’s operator.

Osubi airport recorded aircraft movement of about 5,028, going by 2011 estimates (more recent data was not available). This accounted for 4% of total aircraft movement recorded in the country in that year. This compares with 39,000 for Murtala Mohammed airport, the busiest in that year.

Passenger traffic at Osubi was recorded at 144,000 in 2011, accounting for 2% of total passenger traffic during the year.

NAHCO is in strategic partnership the government to expand export in the country.

Further analysis of the financial statement of NAHCO shows total assets fell by 2.18 percent to N16.82 billion in 2015 from N16.46 billion the previous year. Return on equity (ROE) reduced to 8.96 percent in 2015 as against 10.29 percent last year.

The company after meeting the entire requirement for safety and security validation became the first ground handling company in Nigeria to be IATA Safety Audit for Ground Operations (SAGO) certified, first to operate an IATA approved   Authorized Training Centre (ATC) and the only ground handling company member of Association of Africa Training Organization.

NAHCO’s share price closed at N4 on the floor of the exchange while market capitalization as N6.50 billion.

OUR REPORTER