Meyer Plc, a Nigerian paint company sank back into its loss abyss on the back of rising input costs and operating expenses (OPEX) in the first nine months of 2022 after reporting a profit in the nine months period of 2021.
Data obtained from the Nigerian Exchange Group (NGX) show that the paint maker reported a loss of N26.8 million in the nine-month period of 2022, down from the N9.5 million profit reported in the corresponding period of 2021.
The data further showed that this was driven by the rising cost of raw materials which claimed 72.45 percent of the company’s total revenue during the period. The total revenue generated by the paint maker from the sale and application of paint amounted to N1.08 billion in the nine-month period of 2022, the highest generated in eight (8) years, and 42.66 percent higher than N759 million in the same period of 2021.
Cost of sales on the other hand grew faster than revenue by 55.48 percent to N784.7 million in the nine-month period of 2022 from N504.7 million in the nine-month period of 2021.
Operating expenses (OPEX), particularly selling and distribution expenses, were also a major driver for the loss reported by the firm, as operating expenses grew by 19.63 percent to N409.2 million in the first nine months of 2022 from N342 million in the corresponding period of 2021.
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The main culprit, selling and distribution expenses surged by 82.29 percent to N33.96 million in the nine-month period of 2022 from N18.63 million in the nine-month period of 2021, while its administrative expenses grew by 16.02 percent to N372.24 million from N323.42 million in the periods under review.
Finance income reported by Meyer Plc declined by 17.55 percent to N55.28 million in the first nine months of 2022 from N67.05 million in the first nine months of 2021.
Finance costs, on the other hand, on the back of rising interest rates, surged by 71.43 percent to N3.12 million in the nine-month period of 2022 from N1.82 million in the same period of 2021.
Its total assets were down by 7.96 percent to N1.89 billion in the nine-month period of 2022 from N2.04 billion in the nine-month period of 2021, while its shareholder’s equity also declined by 31.94 percent to N1.02 billion in the nine-month period of 2022 from N1.51 billion in the same period of last year.
Cash and cash equivalents were down by 10.89 percent to N1.26 billion in the first nine months period of 2022 from N1.41 billion in the corresponding period of 2021.
Net cash flow from operations was negative during the period amounting to N206.2 million in the nine-month period of 2022, indicating that the company is not generating enough cash from its operations to cover its short-term obligations.
Net cash flow from investing activities during the period grew by 21 percent to N77.2 million in the first nine months of 2022 from N63.69 million in the corresponding period of 2021.
Net cash flow from financing activities on the other hand was negative amounting to N7.92 million in the nine-month period of 2022 due to the repayment of short-term borrowings.
