Rising input costs remain a thorn in the flesh of Livestock Feeds as the cost of sales claimed 91.24 percent of the agribusiness’s total revenue in the first half (H1) of 2022, findings by BusinessDay have shown.
Its cost of sales grew marginally by 5.81 percent to N6.56 billion in the first half of 2022 from N6.20 billion in the first half of 2021.
The boost seen in the cost of sales can be attributed to a whopping 187.8 percent increase in information and technology, 161.5 percent rise in office stationery and printing, 77.5 percent rise in rates, and 36.24 percent increase in electricity and power.
Both its income and cost of sales reached their highest levels in the first half of 2022, which spans a period of 11 years.
Livestock Feeds reported slow revenue growth, at a pace of 2.71 percent to N7.19 billion in the first half of 2022 from N7 billion in the corresponding period of 2021.
The growth in revenue came from its Ikeja operations which grew its revenue by 8.79 percent to N4.58 billion, and its Northern operations which grew revenue by 8.28 percent in the first half of 2022.
However, on a quarter-on-quarter basis, the company’s revenue declined by 2.2 percent to N3.56 billion in the second quarter (Q2) of 2022 from N3.64 billion in the first quarter (Q1) of 2022.
The agribusiness reported a loss of -N95 million arising from rising input costs in the first half of 2022, a 128 percent decline from a profit of N338 million reported in the first half of 2021.
Read also: Higher input costs claim 88.7% of livestock feed revenue in Q1
Its selling and distribution expenses declined by 12.09 percent to N8 million in the first half of 2022, from N91 million in the corresponding period of last year.
However, the company saw a rise in administrative expenses by 25.33 percent in the first half of 2022 to N282 million from N225 million in the first half of 2021.
Finance costs recorded by the company spiked by 241.23 percent to N389 million in the first half of 2022 from N114 million in the corresponding period of 2021.
Totals assets grew by 6.46 percent in the period under review to N11.53 billion as against N10.83 billion in the first half of 2021.
However, its shareholders’ equity declined by N3,60 percent to N2.41 billion in the period from N N2.50 billion in the first half of 2021.
The agribusiness’s cash and cash equivalents increased by 2.62 percent to N391 million in the first half of 2022 from N381 million in the same period of last year.
Cash from operating activities saw a 12,169 percent growth in the first half of 2022to N3.5 billion from negative cash from operating activities of -N29 million in the first half of 2021.
In the same vein, the company’s cash from investing activities grew by 126.09 percent in the first half of 2022 to -N156 million from -N69 million in the first half of 2021.
The negative figure was due to the huge cash outflow from investing activities to which the company acquired intangible assets worth N112 million, property, plant, and equipment (PPE) amounting to N47 million in the first half of 2021.
Its cash inflow from investing activities, however, came from the interest it received which amounted to N619 thousand and proceeds it derived from the disposal of PPE which amounted to N1.2 million in the first half of 2022.
Net cash flow generated from financing activities amounted to -N3.30 billion in the first half of 2022, a 955 percent decline from N386 million reported in the first half of 2021.
The negative cash flow generated from financing activities was due to the huge cash outlay arising from repayment of borrowings and paid interest which amounted to N6.09 billion and N290 million in the first half of 2022.
Cash inflow generated from financing activities was the proceeds received from borrowing which amounted to N3.09 billion in the first quarter of 2022.
Livestock Feeds Plc is a subsidiary of UACN, engaged in the production of Animal Feeds and other related products.
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