Union Dicon Salt, a processor and marketer of crude salt in Nigeria, recorded a 69 decline in its after-tax profit for the first half of 2024. According to the firm’s latest financial statements, its profit dropped to N36.73 million in H1 from N118.05 million in the first half of 2023.
Union Dicon Salt’s other operating income dipped to N123.08 million from N187.3 million during the period reviewed. The firm’s administrative expenses surged to N86.4 million from N69.3 million.
Cash generated from operations stood at a negative N33.9 million from N86.99 million. Cash and cash equivalents at the end of the quarter dropped to N29.6 million from N53.6 million.
The firm’s total trade and other receivables rose to N7.6 million from N6.47 million while total trade and other payables dropped to N1.21 billion from N1.31 billion. Other payables dropped to N150.6 million from N235.8 million.
Union Dicon Salt is a Nigeria-based company that is engaged in the processing of crude salt. The company is also involved in the sale of packaged water in sachets and plastic bottles.
The company has negative equity of -N1.2 billion in 2023 from -N1.5 billion as of December 2022 which implies that the company has accumulated more debt than it can pay, even after liquidating all of its assets.
After accumulating losses over the years, Union Dicon’s revenue reserves were negative N1.6 billion.
“As part of the measures to sustain the going concern, the Company has entered into a joint venture arrangement with Joatalim Logistic Limited,” Union Dicon Salt said in a statement.
It stated that this arrangement currently fetches the sum of N230 million annually to sustain the administrative and other overhead costs.
The company is of the view that it will continue to operate for the foreseeable future.
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“Proper attention is focused on the impact of the negative working capital and net liabilities respectively,” the firm stated.
The firm noted that to facilitate this, the management is committed to engaging in productive activities this year with the approval of the board to revive salt production and diversify into other business opportunities.
“As part of the measures to sustain the going concern, the amount due to the related parties will not be required for immediate repayment until the Company returns to a profitable position,” it said.
Union Dicon was originally in the Salt Making business however, several efforts to revive it from its comatose phase have yielded little to no results.
The company provided its latest efforts at coming back to full operations while saying, “The company is currently experiencing difficulty in maintaining a positive working capital position and has not been generating income from its core business since 2005.”
In 2014, T. Y. Danjuma, the chairman of the company, said the firm was embarking on a major diversification exercise by investing in the Agricultural and industrial goods sector of the economy.
Back in 2016, the Federal Ministry of Agriculture and Rural Development (FMARD) said it had agreed that Union Dicon Salt Plc will replace Cargill as the core investor in the $100m Alape Staple Crop Processing Zone in Kogi State. The deal appeared to have fallen through.
In November 2013, following approval by the Board of Directors, and an AGM of the company, Union Dicon Salt, entered into a strategic agreement with CBO Capital, as a core investor in the company.
In two phases, CBO Capital would acquire 41 million shares of Union Dicon Salt, and following completion of this, an additional 240 million shares to recapitalise the company.
Union Dicon Salt operates as a crude salt processing company. It also engages in the wholesale and distribution of refined and iodised edible salt. The company was founded on May 7, 1993 and is headquartered in Lagos, Nigeria.
