NAHCO: Revenue Growth Lifts Profit to N2.11bn

Kayode Tokede

The Nigerian Aviation Handling Company (NAHC0) Plc result and accounts accelerated further with an upward growth in earnings in the second quarter (Q2) and built a bigger profit of N1.1 billion in the third quarter (Q3) than the N968 million profit it posted at the half-year.

The closing profit of N2.11 billion for the nine months ended September 30, 2022 from N725.15million reported in September 2021 is already close to three times the figure the aviation company reported for the 2021 full year.

The Q3 2022 unaudited financial report of the aviation services company at the end of September 2022, shows that it is experiencing another outstanding profit growth after lifting profit a clear 115 per cent at the end of 2021.

Sustaining improvements have seen quarterly profit numbers jump from N278 million in the first quarter(Q1) to about N690 million in the second quarter (Q2) and accelerating further to N1.1 billion in Q3 2022.

While profit more than doubled at 105.7 per cent quarter-on-quarter (QoQ) in Q2 2022, it sped up to more than five times in the third quarter.

Strong revenue growth with slowing costs remains the benign combination underlying the company’s impressive profit advances since 2021.

Revenue growth gained a lot of speed from less than 46 per cent QoQ in the Q2 to 75.8 per cent to N4.8 billion in Q3 2022 from N2.74billion in Q2 2021.

In nine months, the company reported N11.28billion revenue, representing 51.5per cent increase from N7.44billion reported in the corresponding nine months of 2021.

The nine-month revenue  figure has already beaten the N10 billion mark at the end of 2021.

Extracts from the profit and loss showed a revenue from contracts with customers increase to N N7.2billion in nine months of 2022 as against N3.42billion in nine months of 2021, while revenue from cargo handling (Import Cargo), Cargo handling (Export Cargo) and equipment rental and maintenance increased to N4.7billion in months of 2022 from N4.19billion reported in nine months of 2021.

Input cost moderated at an increase of 49 per cent over the same period to N2.5 billion. The resulting cost saving lifted gross profit by almost 117 per cent QoQ to N2.3 billion in the Q3 2022.

Significant cost saving was made from administrative expenses, which moderated further from about a 34 per cent increase QoQ in Q2 2022 to 22 per cent to N921 million in the Q3 2022.

That again added speed to operating profit, which multiplied close to four times QoQ to N1.5 billion in Q3 2022.

third-level cost saving

Finance expenses again provided a third-level cost saving, closing flat at less than N47 million for the Q3 2022 quarter against some improvement in finance income.

The company gained yet further momentum in pre-tax profit, which jumped more than four times QoQ to roughly N1.5 billion for the quarter.

The top-speed growth in the third quarter gave a much bigger boost to the company’s earnings performance than that recorded in the second quarter..

The cost of sales moderated at an increase of 36.6 per cent over the same period to N6.3 billion. The cost saving from input expenses jerked up gross profit by about 76 per cent to nearly N5 billion at the end of the Q3 2022.

Administrative cost maintained its moderated mood at a year-on-year increase of 21.5 per cent to N2.4 billion and despite that other income continued declining, the company raised operating profit by 149.4 per cent to N2.8 billion at the end of the Q3 2022 operations.

Finance income jumped close to three times to over N84 million during the review period while finance expenses closed flat at N141.6 million, leading to a drop of over 48 per cent in net finance expenses to N57.4 million.

The company closed the Q3 2022 operations with an accelerated growth of 171.4 per cent in pre-tax profit year-on-year to N2.7 billion against a 94.3 per cent increase at the half year.

At N2.1 billion at the end of September 2022, after-tax profit rose by 190.6 per cent year-on-year. The company earned N1.29 per share at the end of the third quarter operations, improving from 44 kobo per share in the same period in 2021.

Solid balance sheet

NAHCO grew its total assets to N19.97billion as of September 30, 2022, representing an increase of 21.4per cent to N16.44billion in 2021.

The breakdown of total assets showed a N11.77 billion total current assets as of September 30, 2022 from N8.49billion reported in 2021, while non-current assets increased by 3.09per cent to N9.2billion as of September 30, 2022 from N7.95billion reported in 2021.

The group, thus announced N8.46billion total equity as of September 30, 2022 from N7.02billion in 2021 full financial year.

In addition, total liabilities increased to N11.5billion in nine months of 2022, representing an increase of 22.17 per cent from N9.4billion in 2021.