Julius Berger Records 70.4% Drop in Profit to N2.440bn

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Iyobosa Uwugiaren in Abuja

Julius Berger Plc, has recorded a 70.4 per cent drop in profit after tax, posting a N2.440 billion profit for the year ended December 31, 2015, compared to N8.239 billion recorded in previous reporting year 2014.
The total revenue of the group also declined to N133.807 billion, compared to N196.808 billion recorded in 2014.

In the same reporting year, the company also announced the mass retrenchment of ‘’approximately 33, 000 workers’’ only on public projects, consequently leading to ‘’indirect retrenchment of approximately 130,000 people’’ in 2015.

These were contained in the company’s Annual Report 2015 and Financial Statement presented to the shareholders at its Annual General Meeting (AGM) held in Abuja yesterday. The Chairman of Julius Berger Plc, AVM Mohammed Nurudeen, was however attributed the low performance of the company to the persistent economic challenges that enveloped the nation in the reporting year: low crude oil prices, higher interest rates, devaluation of the naira and stringent fiscal policies.

“More specifically, in the public sector, lower crude oil prices had a detrimental effect on the ability of government, at all tiers, to meet its contractual obligations and fund capital expenditures,” Nurudeen stated.
“In the private sector, the macro-economic slowdown and foreign exchange scarcity also triggered a downward review of capital expenditures.’’

To alleviate the effect of the economic downturn and mitigate potential adverse consequences on the group, the chairman revealed that strategic reduction of overheads and adjustment of performance planning and resources were carried, which included what he described as “the very unfortunate and painful requirement’’ to retrench a significant number of its well-trained and capable staff.
He added: “Due to the lingering unfavourable economic climate thus far detailed, the entire construction industry remains in crisis mode until today.

“Moreover, the additional issue of foreign exchange scarcity and depreciation of the naira have further exaggerated difficulties. The sourcing of foreign currency at a bearable rate of exchange has become of paramount importance.’’
The chairman said that such tough realities negatively affected the group’s projected planning target in 2015, resulting in a ‘’considerable decline’’ compared with the previous reporting year.

Nevertheless, he said that the group remains well equipped and uniquely positioned to offer clients integrated and holistic solution, at an unmatched level, saying the position continues to attract both public and private clients across all sectors.

Nurudeen assured the shareholders that the company would continue to work steadily to ensure that it carry on value for its clients and shareholders.
Expectedly, faced with the poor outing, the company said it could not maintain the same dividends level as in 2014, proposing a dividend of N1.50 per ordinary share in the reporting year — resulting in a total gross dividend pay-out of N1.98 billion.