The net income of Afromedia, a provider of out-of-home media services to advertising industry in Nigeria, recorded a significant drop by about 39 percent in its profit for the year 2018 as operating profit during the period waned.
Profit after tax decreased to N381.08 million as performance began dwindling after the company rebounded in 2017 from its loss position in 2014, 2015 and 2016 respectively.
This was largely affected by a 77 percent decline in income generated from other operations in 2018. Operating income declined to N514.616 million against a whooping N2.229 billion recorded in 2017.
This resulted to a decline in operating profit to N370.699 million against N836.481 million in 2017, representing a decline by 56 percent during the period. Operating margin for the period declined to 97 percent compared to 194 percent margin recorded in 2017 due to more income gotten from its other operations.
This was however despite impressive gross profit position on effective cost management on sales recorded in 2018. Afromedia recorded its first gross profit in 2018 against the last five years of gross losses.
Gross profit stood at N144.714 million in 2018, a rebound from a loss of N122.44 million losses in 2017. Cost of sales considerably reduced by 57 percent during the period to N236.354 million in 2018 against N552.524 million in 2017.
Revenue however declined to N381.06 million in 2018 from N430.077 million in 2017.
A 5-year analysis of the performance of Afromedia stock has shown dormancy during the period with price at N0.50 with no activity on the stock, returning no value to investors and the exchange at large.
Afromedia has a market capitalization of N2.2 billion with a share outstanding of 4.44 billion units of shares.
David Ibidapo
