Japaul Gold and Ventures Plc have reported a billion-naira profit in the financial year of 2024, its highest in five years despite reporting a negative cash flow from its core business activities.
BusinessDay analysis of the mining and technology development company reveals that its after-tax profit increased by 183 percent to N1.83 billion in 2024 from N695 million in 2023.
However, the company reported negative cash from operations amounting to N468 million from a positive N158 million in 2023, with the firm’s core business activities not generating enough cash, the firm resorted to diversifying its strategies offshore.
When a firm is not generating money from its core business operations but has high revenue, it typically means that the revenue comes from non-core or secondary activities rather than the primary business activities the firm is known for.
Japaul Gold’s offshore subsidiary accounted for 83 percent of the company’s N4.12 billion turnover generated during the period compared to its other subsidiaries’ Japaul Dredging and Japaul Quarry which amounted to N527 million and N164 million, respectively, which are the firm’s core business activities.
So far this year, Japaul Gold has been an active stock with an average trading volume of 14.2 billion shares since the start of the year. The bulk of the stock’s trading volume came on Friday, January 24 when about 34.6 million shares were traded.
Year-to-date, Japaul Gold has appreciated by 7 percent as of January 24, opening the year with a share price of N2.14, and reaching a year-high of N2.30 on January 6. However, the company’s stock ended 2024 with a share price of N2.05.
As of December 2024, Japaul Gold’s investment in acquiring its assets increased by 132.8 percent to N33.27 billion from N14.3 billion.
Read also: Japaul Gold enters N26 billion land reclamation project with Gracefield Island
The breakdown shows that its non-current assets amounted to N16.2 billion while its current assets amounted to N17 billion last year.
Despite the macroeconomic headwinds that affected businesses, Japaul showed resilience in maintaining a positive outlook as shareholders’ earnings saw a major turnaround from a loss to a profit.
The data shows that the company’s reported equity amounted to N18.9 billion from N-800 million driven by its share premium during the period.
The company’s ability to reduce its costs was also evident during the period as it reported a decline in its administrative cost to N875 million reported in 2024 from N11.02 billion in 2023.
In an official statement on the Nigeria Exchange Group, Japaul Gold disclosed that it signed a sand mining contract with Gravitas Investment Limited, the developers of Gracefield Island.
The contract, valued at N26 billion, involves the extraction of 3.5 million cubic meters of sand for the reclamation of swamps and lagoons at Gracefield Island, located at the end of Chevron Drive, Lekki. The project is scheduled for completion within 26 months.
According to the corporate disclosure signed by Michael Edeko, Japaul’s company secretary, the sand mining project is expected to sustain the company financially while preparations for gold production are underway.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
