TOURIST COMPANY OF NIGERIA HOPE RAISING QUARTER

The quarter to September 30 2015 for Tourist Company of Nigeria (TCN) was remarkable mainly because it raised hopes that the loss league could be a thing of the past.
According to the figures for the period released recently a combination of fairly growing turnover and lower increase in expenses could not overcome pressure from cost of financing but it helped to reduced the loss recorded considerably.
TCN's revenue had increased by 18.6% to N789.1m from N665.2m reported by September 2014.
Equally heart warming was the fact that the total costs incurred to record this growth increased by only 4.52% to N807m from N772.1m.
As a result great promise emerged as operating loss reduced by 83.3% from N106.9m to N17.9m.
However, this was deemed a little later as finance cost for the quarter rose by 36.9% to N137.2m from N100.2m.
In view of this the final decrease in loss recorded came to 25.1%  dropping from September 2014's N207.1m loss before tax to N155.1m.
That means that TCN closed the quarter with N19.6 loss on each N100 income compared to N31.1 previously. Good but it could have been better.
SO:
* With the recent reduction in benchmark interest rate by the Central Bank of Nigeria, it should be easier for TCN to handle financing cost in subsequent periods.
* However, the improvement in liquidity position must be maintained to avoid tempting appetite for less costly money market hand outs.

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