Vitafoam Nigeria Plc has posted an impressive first quarter (Q1) profit ended December 31, 2019, after recording similarly impressive full year results for the year ended September 30, 2019. Although the company posted a reduced revenue, cost saving strategies boosted its bottom-line.
Vitafoam recorded a revenue of N5.984 billion in 2019, down from N6.388 billion in the corresponding period of 2018.Cost of sales fell from N4.6 billion to N3.43 billion in 2019. Gross profit stood at N2.553 billion, up from N1.733 billion, while operating profit improved to N1.362 billion from N742 million in 2018.
Financing cost was reduced from N229 million to N183 million, making the company to end the Q1 with profit before tax (PBT)of N1.179 billion in 2019, up from N513 million in 2018 and profit after tax (PAT) of N819 million compared with N362 million in 2018.
Market operators said the Q1 performance has raised the hopes of Vitafoam shareholders for another bounteous harvest at the end of financial. The company recently recommended a dividend of N525 million for the year ended September 30, 2019.
The dividend, which translates to 42 kobo per share is 68 per cent above the 25 kobo paid the previous year. The foam making company recorded highly improved performance with PAT soaring by 296 per cent.
An analysis of the results showed that revenue rose from N19.534 billion to N22.283 billion. Operating profit grew from N2.092 billion to N4.444 billion. Net financing cost declined from N1.377 billion to N1.049 billion, while profit after tax stood at N2.386 billion compared with N602 million in 2018.
Based on the improved performance, the board recommended that a dividend 42 kobo per share that on March 5, 2020 after shareholders’ approval at the annual general meeting on March 4, 2020.