Shareholders urge govt, agencies to pay N34b owed Julius Berger
From Martins Oloja
(Abuja Bureau Chief)
DISTURBED by the huge debt which the Federal Government, its agencies and some state governments are owing Julius Berger Nig. Plc, the shareholders yesterday appealed to the debtors to pay up.
The Federal Government and other debtors are owing the construction giant a whopping N34 billion on contracts already executed.
One after the other, the shareholders expressed lamentation in Abuja yesterday at the yearly general meeting of the firm, saying that failure to pay the debts has affected their investment in the company.
Besides, they said it was an unfortunate paradox of business development that while Julius Berger regularly pays its tax and interests on loans to the federal, state governments and the banks respectively, debts to the firm has been mounting.
In 2002 financial year, the clients owed the company N21 billion.
According to the Chairman�s statement to the shareholders, the company recorded an impressive turnover of N30, 475, 785,000 (N30.5 billion) but the profit after taxation was a paltry N356, 987, 000 (N356.5 million) because of the prevailing economic situation.
In the previous year, the firm's turnover was N26,478,352,000 (N26 billion) while profit after taxation for the same period last year was N379, 360,000 (N379 million).
Despite the impressive performance, the proposed dividend for the year was an unimpressive N33,750,000 (N33 million). It is put at 15k per 50k ordinary share (2002-25k).
The tone for the reduction in the proposed dividend was set when the Chairman of the company, Brig.-Gen. Mobolaji Johnson (rtd) said: "I mentioned that 2002 was a difficult year for the Nigerian economy. 2003 turned out to be even a more difficult year especially for the construction industry".
According to Johnson, 2003 was challenging for the firm as the nation played host to two big events, 8th All Africa Games and 52nd Commonwealth Heads of State and Government meeting, which involved them.
The Chairman said: "It is, however, regretful that though the two high profile events increased our turnover, the gains were spoilt by insufficient budgetary allocations for most of our ongoing projects.
"Contrary to our expectations, the debt could not be reduced by sufficient payments by our clients as anticipated in our report last year," he added.
The former military governor of Lagos continued: "Our company's turnover increased by approximately N4 billion in 2003 or 15 per cent compared with the year 2002.
"Contract debtors actually increased by N12.5 billion. During the same financial year, our company's indebtedness to Bilfinger Berger AG increased by N6.3 billion from N10.74 billion in 2002 to N17.01 billion in 2003.
"Bilfinger Berger AG is the foreign partner that holds the majority share of 49.96 per cent in the company".
The chairman disclosed to the shareholders that the company was pursuing diversification seriously just as it is targeting business in the private sector where clients do not owe.
His words: "In order to diversify and to broaden our range of clients, your Company is now targeting contracts from the private sector and is as well strengthening and expanding its participation in the growing and interesting market of the oil and gas industry."
