Iyobosa Uwugiaren in Abuja
For the first time in the history of its operation, Julius Berger Nigeria Plc recorded loss in the financial year ended December 31, 2016, posting a loss before tax of N1.239 billion, compared to a profit before tax of N6.500 billion in the 2015 financial year.
Even though it recorded an increase in turnover of N119.813 billion in 2016, compared to N119.243 billion in 2015, the chairman of the company, Mr. Mutui Summonu, said the achievement was not enough to “offset the tremendous and critical challenges” the group continued to face in the light of dwindling economic performance and greater uncertainty in the country.
Presenting the Annual Reports 2016 and Financial Statement of the company to the shareholders at its annual general meeting (AGM) in Abuja on Thursday, Summonu attributed the poor outing of the company to the persistent and increased severity of the economic hardships, specifically the large premium paid for the acquisition of foreign exchange at exorbitant rates, which resulted in the unbearable losses that absorbed the operating profit completely.
“This, coupled with the federal and state government’s continued inability to honour contractual obligations on the majority of their projects, had drastic negative effect on the company liquidity and profitability’’, the chairman of Julius Berger added.
“Consequently and regretfully with respect to the unbroken trend of dividend payment of your company, your director will not be recommending the payment of dividend for the financial year ended December 31, 2016.
“Your board and management is more focussed on ensuring the survival of Julius Berger in this harsh economic and operational environment.’’
The chairman added that the company would continue to implement its long-term strategy of diversification with regards to business segments and client mix, saying emphasis will continue to be placed on further increasing the share of private sector clients within its portfolio.
According to him, “The company will continue to strengthen its presence in the power sector by enhancing its position as an engineering, procurement and construction contractor of choice.
“Opportunities in other new business areas will continue to be identified and explored diligently, with negotiation already proceeding on a number of promising projects, and debt recovery measures, including extraordinary actions already initiated with the federal government, will continue to be pursued to find amicable solution.’’
He said although Nigeria currently faces tough economic times, it retains enormous potential and looks forward to expected development related to the federal government’s Economic Recovery and Growth Plan together with implementation of the 2017 budget, which are expected to serve as catalysts to pull the economy out of recession and place it on the path of sustainable growth.
Summonu said the company remains hopeful for the much anticipated positive momentum of economic recovery.