John Holt plc, a Nigerian conglomerate, has succumbed to cost pressures as it posted a loss of N299m in the first two quarters to March 2014, analysis of the financial statement shows.
The slowdown at the bottom line level was caused by a 18.11 percent increase in total operating expenses to N470m in the review period from N574m in the same period of the corresponding year of March 2013.
The top line level also took a hit as sales fell by 14.8 percent to N1.24bn in 2014 as against N1.45bn in the preceding year.
However, input costs were low as cost of sales reduced to N914m in 2013 compared to N1.08bn while cost of sales margin dropped to 66.8 percent in 2014 from 72.8 percent last year.
The company was able to manage direct materials attributable to projects as gross profits increased by 12.8 percent to N327m in the period under review as against N375m last year, while gross profit margin remained flattish at 26 percent.
Because of the company’s well diversified business and the country’s favourable economic outlook, analysts see it rebounding to growth.
Fixed assets turnover reduced to 0.14 times in the review period from 0.17 times the preceding year.
Current ratio which measures the ability of a firm to meet short term obligation was 0.14 xs, which is lower than the 2.1x industry average.
John Holt was able to reduce debt as finance costs were down by 15.2 percent to N117m as against N138m in the same period of last year.
Additional total loans in the balance sheet also reduced by to N752m from N880m the preceding year, while debt to equity ratio remained flattish at 41 percent.
Total assets were down by 2.46 percent to N8.39bn in the review period compared with N8.18bn corresponding period of last year.
The company’s share price closed at N1.13 on the floor of the Nigeria stock exchange while market capitalisation was N439.74m.