NAHCO Announces N3.8bn Profit for 2022 Financial Year

Chinedu Eze

The Nigerian Aviation Handling Company Plc (NAHCO) has announced profit before tax of N3.8 billion for 2022 financial year.

Chairman of NAHCO, Dr. Seinde Fadeni, who announced it, explained the factors that aided the company to record such stellar performance at a period the aviation industry was coming out from the effects of COVID-19. Fadeni spoke to journalists after the 42nd AGM of the company, which recently took place in Lagos. He discussed the financial results, NAHCO’s performance and the future outlook of the organisation.

The NAHCO Chairman said the foremost handling company remained resilient, performing admirably and achieving some significant milestones, thereby delivering value to the organisation and its esteemed shareholders.

“Our group’s revenue for the year 2022 was N16.7 billion, a 63 per cent increase from the previous year’s figure of N10.2 billion. This was due to a combination of factors, including the increase in aircraft handling rates, on-boarding of new routes by some loyal clients such as Qatar Airways expansion into Kano and Abuja routes and Ethiopia Airlines addition of Enugu route to its destinations. We also benefitted from Air Peace’s commencements of Port Harcourt – Cameroon route. The expansion of our excellent services, improved efficiency in our operations and increased reliance of our clients on our ability to deliver, all contributed to the positive results. Our profit before tax is N3.8 billion, a 315 per cent increase from the previous year’s figure of N925 million,” he stated.

At the time there was doomsday prophesy that COVID-19 would devastate the economies of the aviation sector and leave airlines and other aviation companies in great losses, but NAHCO Plc was not so adversely affected and therefore was one of the few companies that retained its workforce and also provided succour to those who stayed home, he said.

Fadeni further said: “The quick recovery rates happened in almost every part of Africa and not just in NAHCO alone. In that year of COVID-19, Ethiopian Airlines declared a profit of over $1 billion and it was just strategy. When some airlines parked their planes, and they were using it for restaurant, Ethiopian Airlines turned their own passenger planes to cargo aircraft. There was increase in cargo freighting and we are part of the people that made money out of it.

“So, it had an impact on us in the sense that during those periods we were working. And what we also did strategically is that some of our staff who were not essential workers, we made sure that they were at home, and we were paying them about 50 per cent of their salaries. Because this is a skill-oriented organisation, we put so much money in training them. So, for you to get another set of people, it will take you a lot of time and resources to train them. So, what we did was asked them to stay at home and pay them. What we just removed was transport and some other allowances. It was just strategy and doing the right thing and making sure that we reduced our cost. That is why we were able to overcome these challenges.”

He expressed hope that with the plan to retool the nation’s economy by the new President Bola Tinubu’s administration, there would be hope that cargo freighting from Nigeria would receive a boost.

“Cargo is more time bound and it continues to happen all over the world. As a matter of fact, when it comes to Africa or these areas, you will find out that we are more or less, in Nigeria compared to other places like South Africa and other countries like Ethiopia; our freight is so small. For example, in Nairobi, Kenya, every Boeing 737 plane leaves the city with flowers to Europe and other countries. At the end of the day, you just find out that the effect has not really gotten to Nigeria. However, I believe that with the new administration, they want to retool the economy and I believe that that will also aid air cargo. Because once there are activities and the economy is running well, everything will run smoothly.

“The new administration has also said that there is going to be a unified exchange rate. So, this has has a lot of impact on cargo importation whether it is sea freight or air freight. But, with these new economic policies, which we all know that by the grace of God, he will live up to, there is going to be increase in cargo movement,” NAHCO Chairman said.

Recounting the impediments to the company’s operation, Fadeni said multi taxation, high cost and scarcity of forex were factors that nearly stymied the company’s operations, just as they also affect other organizations in aviation and outside the sector.

“Sometimes, there are multiple taxes. One of the major issues is that 95 per cent of our equipment, if not 100 per cent are bought through foreign currency. So, we have not had good access to foreign currency. We can’t even try to take a loan because you won’t survive it. The interest rate is not good for any business in Nigeria. We are almost at 26 per cent per annum. What do you want to do to make that kind of money to pay back?

“Basically, those are the challenges. For example, what the Federal Airports Authority of Nigeria (FAAN) charges us is 5 per cent on our revenue. It shouldn’t be 5 per cent on our revenue, it should be 5 per cent on our profit. If you are charging me 5 per cent on revenue that means you are also charging on the money from which I pay my staff. You are taking 5 per cent on my staff and yet I am paying you. If I want to take land from FAAN, my landlord, I will have to pay for it and yet you are taking 5 per cent of my total revenue, not profit,” he further said.

On the good performance of NAHCO Plc last year and whether the company would sustain and possibly surpass the previous performance, the chairman expressed confidence that that success would be surpassed this year.

“I am very confident that we will do better than what we did in the past year in 2023, we are there already. We have our first quarter report, and I am sure we have it in the public. So, I don’t have any doubt that we will surpass what we did in the 2022 financial year. What we have also done is that we have tried to retool our system by cutting cost. We are trying as much as possible to make sure that there is no waste in the system. So, I am very confident that we will do better,” the NAHCO chairman assured.