Nigerian Aviation Handling Company plc (nacho aviance), which has interests in diverse areas including aviation cargo and aircraft handling, says its transformation agenda aims at achieving a five-fold revenue increase from its 2017 level, and maximising corporate value through a group structure.
Adoption of the transformation agenda followed a decision by the new Board of the company in October 2018 to undertake a “holistic view and completely business review” of Nahco, to chart a new path for the company, group managing director and chief executive officer, Olatokunbo Fabgemi, told business editors in Lagos over the weekend.
Nahco commissioned international consulting firm, KPMG, last November to undertake the review, and the result was ready by Decmber, said Fagbemi, who joined the company in December. She arrived as the third CEO at in about two years at the company.
In the new structure, the group comprises Nahco as a company, with subsidiaries NAHCO Free Zone (NFZ), Nahco Nahco LNG Power Infrastructure, and Mainland Cargo Options Limited (MCO), which has been set up but not operational yet, said Fabgemi.
“If you run as a group, then you can run cost collaborations, have efficiency; you can do cost marketing in such a way that we can optimise the value of the group. That means we will increase the revenue and we will be able to reduce that cost,” Fabgemi explained.
Nahco, she said, had been experiencing increases in both operating administrative costs. “We have ageing equipment, which means higher maintenance cost and higher utilisation of fuel,” explained. According to her, the price of diesel, the fuel most used by the company, has risen, adding to the increase in operational cost.
As part of the transformation programme and in response to the rising costs of fuel, Nahco plans to embark on a process of asset renewal, which will mean phasing out the old equipment. This year, it plans to invest about N3.5 billion in equipment, with N1.5 billion already invested, Fagbemi said. Equipment that have arrived or are expected include a Push Back, Conveyor belts, Forklifts, and those that are already in are being put to effective use, the CEO said.
For instance, when an airliner overshot the runway at the Port Harcourt Airport last week, it was Nahco’s Push Back that was used to retrieve the aircraft, thereby saving the nation from asking for foreign help.
“At that time, they were already calling other people. That was something unusual and if it was not pulled the airport would have been shut longer than it was,” Fabgemi said.
Another aspect of the transformation agenda is cultural renewal in the organisation, which will change people’s perception of work in the organisation, according to the CEO. “One of the things we are doing is a complete transformation of our culture and building our culture on safety and security,” she explained.
The other aspect of the transformation, according to her, is diversification. As a logistics company, Nahco will be looking at air, land, and sea.
Nahco’s share price rose 0.31 percent on Monday to N3.20, from N3.19 where it closed on Friday. Year-to-date, the stock has fallen 12.3 percent, according to data available from the Nigerian Stock Exchange.
But the stock has upside prospects, says Fagbemi. “One thing I can say is that our share will definitely go up,” she declared.
According to her, Nahco’s share is “grossly undervalued. Even if it’s just the value of the assets that we are putting in, that will ensure that that our price will go up,” she said, adding: “We are putting value into the company.”
Nahco will be presenting its Facts Behind the Figures on its 2018 report today, Tuesday, a programme during which listed companies share with the investment community factors that drove its performance over the period.
Its revenue for the period was N9.8b, according to Fabgemi. By the end of 2019, revenue is expected to rise to N12b, according to her. When this is added to the value of the assets being added to the company now, its share price will rise, she said.
“We advise everyone to buy us now because in the future it will not be the same story,” Fagbemi said.
