Beta Glass first-half net income declines by 23.22%

Beta Glass of Nigeria plc says net income in the three months through March 2014, fell by 23.22 percent to N479.79 million from N625.25 million a year earlier, according to a statement posted on the website of the Nigerian Stock Exchange.

The company was however able to boost top-line performance as revenues spiked by 13.33 percent to N3.91 billion in the first quarter (Q1 2014) from N3.44 billion as of Q1 2013.

Based on BusinessDay analysis, bottom-line performance fell due to cost pressures that culminated in lower margins.

Cost-of-sales margin increased to 76.72 percent in 2014, from 73.9 percent in 2013, as cost-of-sales surged 18.57 percent to N3 billion.

Gross margins decreased to 22.11 percent in 2014, as against 26.51 percent in 2013, which highlights the need for better management of direct material.

Net margin, a measure of profitability and efficiency, also dipped to 8.77 percent in Q1 2014, compared with 12.98 percent as of Q1 2013.

Beta Glass total assets reduced by 1.82 percent to N26.67 billion in Q1 2014, compared with N27.16 billion as of Q1 2013.

The current ratio, which measures the ability of a company to meet its short-term obligations when due, was 1.90x, below the 2.1x industry average.

Trade and other receivables were up by 15.51 percent to N14.0 billion in 2014, from N12.11 billion.

This also suggests management tighten its credit policy to reduce money owned it by customers; this will boost revenue.

The fixed asset turnover highlights the effectiveness of the company in generating turnover from investment in assets. The total asset turnover in the period was 0.14 times, meaning the company is under-utilising its assets to generate sales.

The company was incorporated in 1974, and is based in Lagos, Nigeria.

Beta Glass is a subsidiary of Frigo Glass Industries (Nigeria) Limited. Nigeria, with a population of over 170 million and a growing middle, Beta Glass has enormous opportunities to tap into and also boost both top-line and bottom-line performances.

The company’s share price closed at N16.59 on the floor of the NSE, while market capitalisation was N8.30 billion.