HALF YEAR RESULTS: VITAFOAM: SCARY START BUT..

When Vitafoam Nigeria PLC ended the first quarter to March 2016 with a loss, it must have been scary but goodness, by half year the ship had stabilised.
According to unaudited results for the half year,compared to loss of N3.56 on each N100 income by March, gain of N0.46  was recorded by June 2016 with some relief
Of course, the profit margin was no where near 5.84% reported at the same time in 2015 neither is it comparable to March 2015's 6.28% but it must have been good to be back in black ink.
The fact was that must of the factors that applied pressure on the bottom line in the first quarter, were reversed during the second quarter leading to reduced adverse pressure.
For example by June the 23.4% decrease in core revenue had been reduced to 13.7% drop to N8047.6m.
Even 18.3% decrease in gross profit by March went down to 13.2% drop by June principally because aside from narrowed income decrease, cost of sale still dropped by 13.9%, that will is ahead of the core income drop.
Then distribution cost which declined by 3.27% by March went down faster at 12% to N393m.
Apparently, management was less able to hold down administration expenses but it, too, ended up increasing by only 6.42% by June compared to 10.2% in the first quarter.
To round up the chain of fortune change for Vitafoam, finance cost growth slowed down from 44.9% in March to 22.1% by June and income from other sources topped up by 29.1% to N60.8m in June as against only 14.2% earlier in the first quarter.
Thus Vitafoam recorded a modest N37.7m profit before tax by mid year. This was a 93.1% dive on June 2015's N547.5m but certainly a great leap out of the loss of N126.8m by March.
All things being equal, the last half of the financial should build on present gains provided they are sustained.

VITAFOAM NIGERIA (Nm)
                      Half year
                      2016.               2015
Total income 8108.4.        9369.0
Core revenue 8047.6         9321.9
Cost of sale.  5479.4.        6361.7
Gross profit    2568.2.       2960.2
Distribution      393.0.         446.4
Administration 1766.0.     1659.5
Other income       60.8.          47.1
Finance cost       432.3.       354.0
Profit before tax   37.7.        547.5
Profit margin %    0.46.          5.84
Working capital   526.4.       668.2

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