Rising input cost slows John Holt to N111m loss in Q2

Nigeria’s conglomerate giant, John Holt Plc has reported a loss- after tax of N111 million in its 2022 second-quarter (Q2) unaudited financial statement, a development that can be attributed to rising input costs believing most firms in Africa’s biggest economy.

Findings by BusinessDay showed John Holt’s loss after tax of N111 million in Q2 2022 due to the firm’s high cost of sales which accounted for 80.2 percent of the firm’s total revenue in the period under review.

The firm’s cost of sales surged by 410 percent to N1.74 billion in the second quarter of 2022 from N342 million in the corresponding period of 2021.

Net finance costs also grew by 62 percent to N82 million in the second quarter of 2022 from N51 million in the second quarter of 2021.

Further breakdown showed the firm’s loss declined by 81 percent to N111 million from N580 million loss in the corresponding period of 2021, while its revenue increased to N2.17 billion from N445 million in March 2022.

An in-depth analysis showed that technical production and leasing services contributed N1.99 billion to total revenue, Yamaha contributed N4 million, and Central contributed N176 million to total revenue.

John Holt’s distribution expenses declined by 3 percent to N100 million in March 2022 from N100 million recorded in March 2021.

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Similarly, its administrative expenses also declined by 3 percent to N185 million in Q2 2022 from N192 million in Q2 2021. The conglomerate’s total assets grew by 12.18 percent to N11.2 billion in Q2 2022 from N9.99 billion in Q1 2021.

John Holt’s cash and cash equivalents which represent the value of the company’s assets that are cash or can be converted into cash immediately amounted to N405 million in the second quarter of 2022, a whopping 330.85 percent surge from N94 million recorded in the second quarter of 2021.

The company’s cash flow from operating activities and financing activities stood at N30 million and N181 million respectively while cash flow from investing activities stood at a deficit of N30 million.

According to Investopedia, a positive cash flow from operating activities indicates that the core business activities of the company are thriving while a negative cash flow from investing activities might be due to significant amounts of cash being invested in the long-term health of the company, such as research and development.

The principal activities of the group are the assembly, sale, leasing and servicing of power and cooling equipment; sale and servicing of fire fighting vehicles and equipment; boat building, sale and servicing of marine equipment; marine transport; warehousing and distribution services; property services and construction.