2015 GRIEF FOR GREIF NIGERIA PLC BUT....

In spite of very good efforts, Greif Nigeria PLC had reason for some grief over how 2015 finally ended aside from loosing its longest serving board member, if not Nigeria's longest, to death.
The renown Gamaliel Onosode who died last year became a non executive director of Greif Nigeria in 1974 and he remained on the board till his death. That is for 41 years.
Yes the Management did try to end the year better. Core revenue had risen by only 2.26% to N805.4m from N787.6m and finance income had gone down by 7.69% to N4.92m from N5.33m thus closing overall income growth at 2.19% from N792.3m to N810.3m.
In spite of these, good cost control led to only 0.97% increase in cost of sale to N656m from N649.7m. More importantly, administration cost was driven down 29% to N56.2m from N79.2m leaving only selling and marketing alone to apply pressure on the company's bottom line. It increased by 27% to N4.75m from N3.74m.
However, in spite of all these Greif Nigeria ended 2015 with 30.9% drop in profit before tax to N40.1m from N58m.
How come? Well, the blow to the jugular came from N53.2m foreign exchange loss compared to only N2.23m such loss in 2014.
In sum then the company gained only N4.95 on each N100 income in 2015 compared to N7.31 in 2014 in spite of comparatively greater efficiency achieved.
Not to worry, 2016 is here and from the tone set by first quarter figures to January 2016, forex loss may be less the trouble it was in the year to October 2015. Already Greif Nigeria reports 7.29% profit margin compared to 4.59% at the same time in the previous year. Mainly because foreign exchange loss came to N1.45m compared to N12.3m by January 2015.
SO:
* The pressure on liquidity continues though and that could further depress finance income.
* It has to be noted too that cost of sale by January 2016 did not drop as fast the drop recorded in core revenue. Is the good grip over direct line cost in 2015 being lost?

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