• Tuesday, February 27, 2024
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Julius Berger rising finance cost trumps profit by 56.3%

Julius Berger rising finance cost trumps profit by 56.3%

Julius Berger Nigeria’s Plc, one of Nigeria’s largest construction companies has said the firm’s finance cost claims 56.27 percent of its profit in the first quarter of 2023.

The construction giant saw its finance cost grow by 115.2 percent to N1.27 billion in the first quarter of the year from N0.59 billion in the same period of last year, on the back of rising interest rates which became concurrent since last year.

Under the finance cost, interest on borrowings grew by 576.1 percent in the period under review to N648.6 billion from N95.93 billion in the same period last year.

Profit after tax in the first three months also decreased by 39.67 percent to N2.25 billion from N3.73 billion recorded in the first quarter of 2022.

The firm’s cost of sales in the first quarter of 2023 saw a decline of 3.74 percent to N87.81 billion from N91.23 billion in the same quarter of last year.

Its total revenue increased to N107.87 billion, up 29.99 percent from N106.45 billion in the same quarter of 2022.

Furthermore, its operating expenses grew by 40.5 percent to N15.1 billion in the first quarter of 2023 from N10.748 billion recorded in the same quarter of last year on the back of 39.7 percent increase in administrative costs.

While administrative expenses grew to N14.68 billion in the first quarter of 2023, marketing expenses also increased by 75.2 percent to N42.4 million in 2023 from N24.2 million in the same quarter of 2022.

The construction company also reported impairment loss on trade and tax receivables amounting to N1.23 billion in the first three months of the year, up 261.7 percent from N0.34 billion in the same period of last year.

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Riding on a high-interest rate environment, investment income grew by 4.2 percent to N750 million in the first three months of 2023 from N719.7 million in the same period of last year.

Due to foreign exchange volatility, Julius Berger reported a foreign exchange acquisition loss of N1.53 billion during the period from the N1.11 billion it recorded in the same period of 2022.

Total assets increased by 2.68 percent to N413.7 billion in the first three months of 2023 from N402.9 billion in the same quarter of last year, while shareholders’ equity rose to N59.68 billion in the first quarter of 2023 indicating an 8.83 percent increase from N54.84 billion in the same quarter of 2022.

Net cash flow from operations after tax deductions was negative amounting to N36.39 billion in the first quarter of 2023 revealing that the firm paid more as cash for tax and an increase in loss of foreign exchange acquisition. However, the value declined by 446.2 percent from N10.51 billion in the first quarter of 2022.

Furthermore, it recorded a negative purchase of property, plant, and equipment during the period under review amounting to N1.63 billion, received interest amounting to N750 million, and proceeds from the disposal of property, plant, and equipment totalling N1.27 billion, thereby bringing net cash flow from investing activities to N395.3 million at the first quarter of 2023.

Consequently, cash and cash equivalents for the first three months of 2023 amounted to N45.53 billion, a 3.47 percent rise from N44 billion in 2021.