Vitafoam Nigeria Plc, a Lagos-based foam manufacturing company, has reported its first loss in eight years for the nine-month period ended June 2024, according to BusinessDay’s findings.
Data from the Nigeria Exchange Group (NGX) disclosed that the company reported a loss after tax amounting to N2.8 billion in its nine months ended June 2024, from an after-tax profit of N3.6 billion in the same period of 2023.
This was driven by the operating expenses, which rose by 145.8 percent during the period.
Operating in a challenging business environment, Vitafoam is grappling with escalating raw material costs and heightened competition, leading to a notable surge in operating expenses in the nine-month fiscal period of 2024.
During the nine-month fiscal period of 2024, operating expenses witnessed a significant amount of N20.9 billion, compared to N8.5 billion in the corresponding period last year.
A breakdown of the company’s OPEX consists of distribution expenses which rose to N2.2 billion from N1.6 billion and administrative expenses which rose to N18.6 billion from N6.9 illion during the reviewed periods.
Similarly, the firm’s operating profit experienced a decline of 84 percent, amounting to N806 million, compared to N5.2 billion in the same period under review in 2023.
On the other hand, interest on borrowings impacted Vitafoam’s finance cost to rise by 333.2 percent to N3.8 billion from N877 million, thereby denting its profitability despite steady revenue streams.
The company’s financial statement disclosed that its revenue from contracts with customers rose to N60.4 billion from N39.2 billion with revenue from Nigeria accounting for the biggest share.
During the 9-month period of 2024, finance income exhibited growth, reaching N996 million, up from N917 million in the corresponding period of the previous year.
There was a decrease in income tax from N809 million in the 9-month period of 2024 to N1.5 billion in the same period in 2023.
Total Equity and liabilities declined to N38.4 billion during the 9-month fiscal year, down from N44.7 billion recorded in the same period of 2023.
Net cash from operating activities demonstrated fell to N2.5 billion in the nine-month fiscal year, compared to N5.6 billion in the nine-month period of 2023, primarily driven by an upsurge in trade payables.
In the reviewed period, Net cash from investing activities showed a gain of N2.17 million, a significant improvement from the loss of N56.15 million recorded in the 6-month period of 2022, primarily due to interest received.
On the other hand, Net cash from financing activities reported an increase of N509 million during the nine-month period of 2024, compared to a loss of N489 million in the same period of 2023 while cash from financing activities generated a significant loss of N15.1 billion.
The closing balance of Cash and cash equivalents at the end of the period amounted to N9.8 billion, representing a decrease from N21.1 billion in the corresponding period of 2023.
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