Chemical and Allied Products (CAP) Plc has yet again recorded a significant growth in its fiscal year earnings amid persistent macroeconomic challenges.
CAP, Nigeria’s biggest paint manufacturer, saw its earnings grew to N3.96 billion, highest in 14 years, despite the 44.9 percent surge in cost of sales driven by escalating prices of raw materials in 2024.
The Nigerian-based paint and coating company revealed in its unaudited financial results that after-tax profit rose by 58.4 percent from N2.5 billion in 2023 aided by an increase in operating profit of N5.3 billion in 2024.
“Cost of sales, which are the direct costs of producing and selling a product or service, surged to N21.6 billion from N14.9 billion on the back of rise in the sales of raw materials to N18.4 billion from N12.7 billion,” the report shows.
However, finance income declined by 12.6 percent to N604.8 million from N681.2 million due to a reduction in interest income on short-term bank deposits to N170.9 million from N308.1 million.
In its FY 2024 report, CAP Plc recorded a 17.4 percent in foreign exchange gains to N433.8 million from N369.5 million despite rising inflation pressures and naira devaluation.
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The manufacturer’s revenue grew to N36.4 billion, up 52.3 percent from N23.9 billion, driven by sales from paint products which contributed N36.3 billion while N78.7 million was obtained from revenue from services in the full year of 2024.
The company’s gross profit also surged by 64.4 percent to N14.8 billion in 2024 from N9 billion while its net cash flow generated from operating activities increased by 27.8 percent to N4.6 billion from N3.6 billion.
It is interesting to know that the manufacturer has been a merger of two subsidiaries of UAC of Nigeria Plc – Chemical and Allied Products (CAP) Plc and Portland Paints and Products Nigeria Plc for over five years.
In 2024, CAP Plc was a huge contributor to its parent company, UAC of Nigeria. It added N36.4 billion to UACN’s revenue with profit before-tax of N6.7 billion.
In 2021, David Wright, managing director of CAP Plc, affirmed that the company would be controlling 25 percent market share of the Nigerian paint industry over the next three to five years.
“The transaction for the merger of both companies had been in the works for more than one year. Executing the merger will give rise to Nigeria’s biggest paint and chemical company by market capitalisation,” he said.
The company noted that the proposed merger presented a compelling opportunity to create significant value for shareholders of CAP and achieve the company’s strategic growth objectives as a larger company with a broader product portfolio, more corporate-owned brands and diversified revenues.
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