The Initiates Plc’s profit surges 296% on FX gains, others

The Initiates Plc, a leading Nigerian waste management facility operator, has grown its earnings by 295.85 per cent to N147.13 million in 2016, buoyed by new business opportunities in the thermal desorption, incineration and industrial cleaning and decontamination areas.

The company’s strong performance came despite pressure from higher cost of sales and was also boosted by significant FX gains.

Data obtained from the waste manager’s 2016 financial statement showed that the company’s operating profit rose 235.55 per cent to N226.02 million compared to the 2015 financial year.

The company, which started operations in 1997 as a consultancy services provider, became a waste management facility operator between 2007 and 2011 when it developed its thermal decomposition plant.

The Initiates deepened its capacity in waste management services from 2012 to 2016, having  developed two additional operational lines – industrial cleaning and decontamination unit and e-waste processing plant, which is first of its kind in Africa.

Waste generation in Nigeria is on the increase at an estimated rate of about 0.5 to 0.7 per cent per annum. This may correspond with the growth rate of Nigeria’s population.

Various studies show that waste generation in Nigeria ranges from 0.4 to 0.7kg per person per day.

Waste complexity is also increasing with biodegradable waste currently accounting for about 50 per cent, implying a national annual waste burden of over 25 million tons for a country that currently has less than 10 per cent waste management capacity.

Analysts say that more than 40 per cent of Nigeria’s 187 million people live in the cities as the country’s annual urbanization rate has reached up to 7 per cent.

Less than 10 per cent of the population enjoy marginal waste management services as the rural dwellers are completely left out of any scheme of services.

Nigeria’s poor waste management policy provides opportunity for private investors in the industry as less than 1 per cent of the country’s annual output is spent on waste management services, lower than the global recommended standard of 3 to 5 per cent of national GDP.

The Initiates Plc invested significantly in capacity expansion during the year, propelling total assets growth by 16.38 per cent to N859.26 million.

 

INNOCENT UNAH