Julius Berger, a Nigerian construction company, has seen its cash and cash equivalents triple within a year, a BusinessDay analysis shows.
According to the company’s latest unaudited financial statement, its cash and cash equivalents rose by 201.4 percent to N160.0 billion last year, the highest in at least 10 years, from N53.06 billion in 2022.
Cash equivalents are short-term investment securities known for their high credit quality and liquidity. They contribute to the company’s ability to meet immediate financial obligations.
The increase in the construction firm’s cash and cash equivalents reflects positively on its ability to meet its short-term debt obligations.
The movement of cash and cash equivalents, detailed in the company’s cash flow statements, reveals insights into its financial activities.
Further analysis of the statement shows that cash flows (used in)/ from operating activities rose to N79.9 billion in 2023 from N43.39 billion in 2022, while net cash flows (used in)/ from investing activities turned positive at N7.28 billion from a negative of N20.25 billion.
However, net cash flows (used in)/ from financing activities showed a negative trend, declining to N13.61 billion from N10.55 billion.
Retained earnings also recorded an increase to N56.22 billion from N15.90 billion.
Despite a marginal increase of 1.61 percent in operating profit to N18.91 billion, driven by rising operating expenses, after-tax profit experienced a surge to N12.74 billion from N7.91 billion.
Operating expenses grew by 17 percent to N57.33 billion from N48.97 billion on the back of growing administrative expenses.
Revenue also saw a modest growth of 1.29 percent to N446.13 billion, primarily from West Africa (N426.13 billion) and Europe (N20.01 billion).
Civil works accounted for the largest portion of revenue at N315.78 billion, followed by building works (N76.80 billion), services (N52.19 billion), and diversification (N1.37 billion) in 2023.
Investment income, including interest income, rose to N7.21 billion from N1.22 billion, while finance costs decreased to N3.83 billion from N4.49 billion, attributed to lower interest on overdrafts and loans.
Total assets surged to N678.2 billion from N506.27 billion, with no borrowing in 2023 compared to N1.10 billion in 2022.
Benefitting from foreign exchange liberalisation, the company reported a foreign exchange gain of N11.57 billion, an increase from N1.29 billion in 2022.
Data from the National Bureau of Statistics shows that the construction sector’s growth rate in nominal terms declined to 2.87 percent in the fourth quarter of 2023, compared to 17.14 percent in the same quarter of 2022, contributing 3.47 percent to total real GDP.
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