CEMENT COMPANY OF NORTHERN NIGERIA: TURNOVER DROP BUT.....

Stakeholders of Cement Company of Northern Nigeria PLC can afford to still smile despite turnover drop.
According to the figures for nine months to September released last week, CCNN's turnover dropped by 6.3 % to N11501.8m from N12275.5m.
Happily, a 74.3% increase in income from other sources to N78.6m had reduced the drop rate to 6.01% but that was not the main sources of smiles for stakeholders.
That is a product fairly good management of cost pressure that led to higher 10.5% decrease in cost of producing the goods sold ( from N7812.5m to N6993.7m) and also higher drop in Overheads by 8.68% to N2044m.
However, there was a major dampener in 43.3% increase in financial charges to N119.8m from N83.6m.
More so when 126.5% rise in long term liabilities to N1450m ended up  being gobbled by 50.9% increase in trade receivables to N2155.1m, about 26.5% rise in inventories to N6426.5m and 59.1% jump in cash on hand to N1425.5m.
On its own the 40.5% decrease in current financial liabilities that also resulted was good since it was a case of reducing high interest credit with lower interest one but of course, better receivables management would have been less costly.
Not to worry, the savings in overheads and cost of sale were enough to allow CCNN close September with only 4.75% decrease in profit to N2422.9m  which comes to gain of N20.9 on each N100 income as against N20.6 previously.
HENCE:
* To broaden the smiles come year end 2015, less recourse to external funds could be necessary through new look at receivable and stock in trade.
* Of course, the good job on costs that are controllable must continue.

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