NGC Declares N63.5m Profit
By Uche Obike
Nigerian-German Chemicals Plc (NGC) has declared N63.5 million profit after tax during the half year ended June 30, 2004, compared with N46.2 million recorded in 2003.
The company's unaudited financial results for the half year released to the market operators by the Nigerian Stock Exchange (NSE) also showed a turnover of N905.3 million, as against N893.4 million in the comparable period of 2003.
Also, the Chairman of the company, Mallam Abali Muhammadu disclosed recently that the company in 2003 recorded a turnover of Nl.6 billion, up from N1.4 billion or 11 per cent over the previous year, while profit before tax was N125 million, up from N95 million the previous year, a growth of 31 per cent.
He explained that the company's turnover growth was limited by production capacity challenges. "Despite this, our improved performance reflects our continued success in brand building and distribution systems for our pharmaceutical business," said Muhammadu.
It could be recalled that shareholders who commented on the performance of the company during the financial year ended December 31, 2003 recently overwhelmly supported the option for recapitalising NGC by raising fresh funds from the capital market.
In his comment, Overseer R. O. Oguntoye called for the recapitalisation of the company by raising fresh capital from the capital by way of rights issues or public offer.
"I am sure if we do this, the banks will no longer take the lion share of our value added. The company's value added is in a state of equilibrium because of bank borrowings. Last year our value added was 26 per cent of the turnover and this year it is also 26 per cent of the turnover," said Oguntoye.
He advised the board and management to be very careful about bank interest which has taken a large chunk of the firm's value added.
"In a situation where 30 per cent of the value added is taken by the banks, while 15 per cent is to the workers, even a token of 11 per cent is given to the providers of the funds is not satisfactory enough," he said.
Chief Timothy Adesinyo, another shareholder commended the company for effective 40 years performance in Nigeria. He added that the story of NGC is that of consistent growth as all performance indices have been positive. The shareholder was particularly happy over the capital appreciation of the comspany's shares at the stock market which last year stood at N1.44 but has grown to N2.20 per share as at December 31, 2003.
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