• Thursday, April 18, 2024
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Investors may offload Med-View stocks as airline reports N10.35bn loss

Med-View Airline

Investors who bought the shares of Med-View Airline Plc may no doubt have been disappointed with the airline’s recently released financials for the year ended December 31, 2018.

The company’s results released at the Nigerian Stock Exchange (NSE) on Friday April 5 showed Loss After Taxation (LAT) of N10.3billion as against N1.2billion Profit Before Tax (PBT) in 2017, representing a decline of N11.6billion or 925percent. The airline’s revenue decreased to N9.5billion from year 2017 high of N36.9billion representing a decrease of about N27.39billion or 74percent.

The company reported loss before income tax of N10.3billion as against profit before tax of N1.5billion in 2017, which represents a decline of N11.8billion or 786percent.

Its statement of financial position shows Total Assets of N17.741billion as against N19.59billion in 2017, representing N1.8billion or 9percent decline. Med-View Airline Plc closed the review year with Total Liabilities of N21billion from a low of N12.2billion in 2017, up by N8.79billion or 72percent.

Isiaq Na-Allah Suyutu, Executive Director, Business Development Med-View Airline Plc did not take his call, neither did he respond to text message when BusinessDay sort to speak to the company on its strategy to get out of this huge loss position.

Shareholders’ Funds which is the amount of equity in a company, which belongs to the shareholders at N3.26billion in 2018 as against N7.38billion in 2017 represents a decrease of N10.65billion or 144percent.

Basic Loss Per Share (LPS) of 106.22kobo as against Earnings Per Share (EPS) of 12.87kobo in 2017, implies a decrease of 119kobo or 925percent. The company has negative Return on Assets (ROA) of 55.4percent against positive ROA of 8.6percent, which implies a decrease of 64percent or 744percent.

At N1.80 per share, the stock has lost 12.2percent of its year-open value. The stock price had reached a 52-week high of N2.14 and a 52-week low of N1.70. Its Market Capitalisation stood at N17.55billion on shares outstanding of 9,750,649,400 units.

The interests of the Directors in the paid-up capital of the company as recorded in the register of Directors’ shareholdings as at December 31, 2018 show Abdul-Moshen Al-Thunayan holds 36 percent or 3.509billion units; Muneer Bankole hold 40percent or 3.858billion units; Ocean Trust Limited (Representative) holds 10.26 percent of 1billion units; while Nigerian Citizens and Corporate Bodies own 1.262billion units 14percent, representing a decline from 2.262billion units or 24percent of the total shareholders in 2017.

Abdul-Moshen Al-Thunayan, Chairman, Med-View Airline Plc said, “The year 2018 will long be remembered as one of the most challenging in the Airline’s recent history. The economy suffered its first contraction in over a decade. The excessive economic decline did have a significant impact on the financials of your Airline. The uncertainty over the political situation of Nigeria did not also help matters, as it spilled onto its economic situation”.

“Despite the strong headwinds which confronted our airline’s revenue throughout the year, the airline was able to balance itself but recorded a loss after tax (LAT) of N10.33 billion which was lower than prior year profit of N1.25 billion. The operating environment remained highly volatile characterised by lack of infrastructure and foreign currency shortages as the depletion/fluctuation of dollar continued unabated.

“The aviation sector remained highly taxed and has witnessed the issue of double taxation on numerous items unresolved even after the government made promises to reduce it. Other airlines are not spared of the adverse impact of these difficult operating conditions,” the chairman said.

“The effect of the economic downturn in Nigeria continued to impact adversely on our operations as there was reduction in credit opportunities which in turn affected our income. This harsh environment of multiple taxation from the authorities, along with the continued lack of infrastructure especially MRO (Maintenance Repair and Overhaul) facility in Nigeria added to our cost of doing business. Nevertheless, with the capable hands at the helm of affairs, we continually strove to ensure that we developed our business as much as possible and also tried to diversify”, Al-Thunayan said.

He further noted, “We have a strong framework which has been tested and has surpassed all challenges. Our strong customer base and services reflects best industry practices. Our focus in the coming years is to deal with our weaknesses and enhance our strengths so we can become once again, the number one airline in Nigeria, it is our view that to be able to do this we should take a strategic view to assess the threats and opportunities in our landscape.

“Today we all agree that diversification of our services into aviation related matters, example is the building of infrastructure (MRO) and (ATO) to serve this region of Africa. We have obtained the necessary permits and the Chinese Company CCECC has submitted quotation and are keen to actualize this dream on our behalf. It is our view that in the long-term, these diversifications will increase our revenues while also rapidly decreasing long term operating expenses on maintenance. Therefore, as we seek to expand our frontiers to tap the profit pools of markets in this part Africa with our diversification exercise, we ask that you continually support and trust us to deliver.

 

Iheanyi Nwachukwu