• Thursday, May 23, 2024
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Chellarams group disappoints as Q3’18 loss expands to N1.12bn

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In its recently released financial report for the third-quarter (Q3) period ended December 31, 2018, Chellarams Plc grew its group Loss Before Tax (LBT) to N1.12billion, which represents about 600percent as against LBT of N157.776million it reported in the corresponding Q3 period of 2017.

This disappointing bottom-line figure by the Alternative Securities Market (ASeM)-listed company comes despite its group revenue growing by 236percent to N8.493billion, from N2.525billion in Q3 period of 2017.

The principal activities of Chellarams Plc are trading and distribution of fast moving consumer goods, ingredients and consumer durables and industrial chemicals.

The group increased administrative expenses and finance costs impacted negatively on its third-quarter bottom-line figures.

For instance, Chellarams Plc group administrative expense increased by 186.16 percent to N1.520billion in Q3’2018 from N531.164million recorded in Q3’2017.

Administrative expenses are the expenses that this organisation incurred not directly tied to a specific function such as manufacturing, production or sales. Salaries of senior executives and costs of general services such as accounting are examples of administrative expenses.

Also, the group finance cost in Q3’18 increased by 343.65percent to N416.810million from N93.950million in Q3’17.

Chellarams poor outing in the third-quarter under review was shown in its financial statements released at the Nigerian Stock Exchange (NSE) on Friday January 25.  At N3.08 per share, Chellarams Plc has market capitalisation of N2.226billion with shares outstanding of 722,925,000 units.

The directors said they assessed the Group’s future performance and financial position on a going concern basis “and have no reason to believe that the Group will not be a going concern in the year ahead.” For this reason, the financial statements were prepared on the basis of accounting policies applicable to a going concern.

Chellarams Plc comprises three subsidiaries namely: Dynamic Industries Limited, United Technical and Allied Services Limited and Chellarams DMK Limited. United Technical and Allied Services Limited is wholly owned subsidiary while the Company has 77.71percent and 74percent shareholding in Dynamic Industries Limited and Chellarams DMK Limited respectively.