SUBSIDIARIES DRAGGING VITAFOAM NIGERIA INTO LOSS?

It will take a while before the audited figures for the year to September to be available but it looks like Vitafoam Nigeria PLC will settle for loss this financial year, courtesy of its subsidiaries.

This is because, the figures for the nine months to June, released only this week, reflect N49.1m loss for the group while the company recorded only 51% drop in profit before tax to N283.2m.

The main problem really is that the subsidiaries seem to be bearing big burden of finance cost with the group figure jumping by 31.4% to N728.5m compared to only 1.1% increase in that of the company to N467.3m from N462.2m.

For good reason. The group working capital eased to N653.9m from N678.2m while that of the company improved to N1831.7m from N1651.5m previously.

There is also issue of higher percentage drops in cost in response to revenue decreases for the company when compared to group ones.

Hence while the company's operating profit dropped by only 8.57% to N950.5m from N1039.6m, the group ended with N679.3m, down 36.9% on a year earlier.

That was before the cost of funds dragged the group into loss of N0.45 on each N100 income as against N3.75 profit previously while profit margin for the company only went down to 3.08% from 4.89%.

Direct cost or cost of sale stayed within fair control for all though, and as total income and core revenue eased across the board, it stayed more or less in step, for both the group and the company.

However, the group was better at growing income from non-core sources ending the nine months with 8.02% increase to N83.5m compared to the company's 4.23% rise to N69m from N66.2m.

VITAFOAM NIGERIA PLC: Nm.
                  Nine months
                             2016.        2015
Total income.    10985.4.   13919.5
Core revenue.    10901.9.   13842.2
Cost of sale.       7419.5.     9414.4
Distribution.         543.3.       718.2
Administration  2433.2.     2710.6
Other income        83.5.       77.3
Operating profit  679.3.     1076.3
Finance cost      728.5.       554.4
Profit before tax (49.1)       521.9
Margin %            (0.45).        3.75
Working capital 653.9.      678.2

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