Julius Berger’s Profits Wilts on Cost of Sales, OPEX

Kayode Tokede

Julius Berger Nigeria Plc in its recently released unaudited financial statement for period ended December 31, 2022 on the Nigerian Exchange Group (NGX) reported significant increase in cost of sales and total operating expenses that slow down the growth of its profit.

The construction company show its cost of sales increasing by 33.4per cent to N371.84 billion in 2022 unaudited financial statement from N278.55 billion reported in 2021, while total operating expenses stood at N43.46billion in 2022, about 27 per cent increase from N34.26billion in 2021.

On these two financial parameters, the group’s profit before tax closed 2022 at N15.5 billion, representing an increase of 12.2per cent from N13.82 billion reported in 2021.

Julius Berger, thus, reported N9.45billion profit after tax in 2022 from N9.36billion in 2021.

Data gleaned from Julius Berger financial report showed the profit and revenue reported by the construction firm in the 2022 unaudited financial represent the highest profit and revenue recorded by the company in 10 years, despite increasing cost of operations influenced by inflation rate and scarcity of foreign exchange.

The firm’s revenue grew by nearly 30 per cent in 2022 to report N440.43 billion from N339.58 billion in the corresponding period of 2021.

Furthermore, a breakdown of the firm’s revenue shows that year on year (YoY), the government sector generated the bulk of revenue for the firm.

Revenue from the government grew by 67 per cent to N265.9 billion in 2022 from N159.54billion in 2021, accounting for 60.4 per cent of the firm’s total revenue in the period.

In the year under review, Julius Berger’s impairment loss on trade and tax receivables increased to N3.89billion in 2022 from N2.1billion in 2021.

This brings operating profit to N21.24billion in 2022, a decline of 14 per cent from N24.7billion reported in 2021.

Its foreign exchange acquisition was at N4.63billion in 2022 from N9.08billion in 2021, while finance costs closed 2022 at N4.49billion from N4.86billion in 2021.

On the backdrop of modest performance in profit, the group’s Earnings Per Share moved from N6.17 per share to N5.47 per share in 2022.

Stronger balance position 

Julius Berger’s shareholder’s equity grew by 8.5 per cent to N58.69 billion in 2022 from N54.06 billion in 2021.

Total assets recorded by the Julius Berger also improved by8.2percent to N504.84 billion in 2022 from N466.77 billion in 2021.

The breakdown of total assets showed a N237.29billion non-current assets in 2022 from N212.32billion in 2021 as total current assets moved from N254.5billion in 2021 from N267.54billion reported in 2021.

Analysis by THISDAY to evaluate the company’s financial leverage shows a debt-to-equity ratio of 7.37 percent.

In 2022, the construction company announced to the market that the pioneer cashew processing plant located in Epe, Lagos State, Julius Berger’s first agro-processing activity, cashew processing, will form the cornerstone of Julius Berger’s diversification activities.

Julius Berger Nigeria is a leading Nigerian company offering holistic services covering the planning, design, engineering, construction, operation, and maintenance of buildings, infrastructure, and industrial projects in Nigeria.