NASCON records N4.4bn profits in 2018 — Daily Times Nigeria Press "Enter" to skip to content

NASCON records N4.4bn profits in 2018

Temitope Adebayo

The Management of NASCON Allied Industries (formerly National Salt Company), a member of the Dangote Group, has announced revenue of N25.8 billion and a Profit After Tax (PAT) of N4.4 billion, as at the close financial year ended December 31, 2018.

To this end, the shareholders will be paid a dividend payout of 100 kobo per share for every 50 kobo share held.

Analysts have attributed the decline in revenue and profitability to the company’s idling vegetable oil and tomato plants for straight two years.

It has, however, been projected that the shareholders will gain a bumper harvest in the preceding year as latest reports say the company’s Kano-based tomato paste plant has resumed operations.

It would be recalled that Tomato paste has been idle for over two years owing to a supply disruption partly caused by a price dispute with farmers

The 1,200 metric tons per day factory, meant to meet domestic demand, reportedly restarted production last week processing about 100 tons a day.

Abdulkareem Kaita, managing director of Dangote Farms Ltd, said the major challenge was the scarcity of tomato, because “the local tomato growers could not meet our production demand, we also could not agree with the farmers on the price of tomato per basket.”

Under a new deal with the farmers, the factory will buy tomatoes at prices pegged to what local markets are selling.

Dangote is also developing its own farms with a special tomato strain that could yield 60 tons per hectare, compared with the yield of 10 tons per hectare being recorded by the local farmers, Kaita said. The company plans to distribute the seedlings to growers to boost their output.

A further breakdown showed that sale of salt remained its biggest business, contributing N20.761billion, down from N22.247billion in 2017, out of which N12.565billion was incurred in cost of sales, as against N11.62bn in the prior year, leaving segment profit of N8.195bn from N10.627 billion.

It was followed by freight income of N4.084bn, compared to the previous N3.858bn, incurring N4.442 billion costs in the process, resulting in a loss of N500.245 million, down from N583.36m a year earlier.

The seasoning segment was however better than freight business, contributing N924.167m income, N839.022 million cost that left segment profit at N85.145 million; which was a far cry from the profit of N125.732 million recorded in 2017 from a lower revenue of N765.295 million and N639.564 million sales cost.

The vegetable oil segment did not contribute to the top and bottom-line in 2018, unlike in 2017, when it contributed N192.904 million, but incurred N335.623 million as cost, resulting in an N142.719 million loss.

Tomato paste did not, however, report any revenue for the year, and yet there was N32.84 million in cost and segment loss.

The lion’s share of the cost of sales for the year was the N10.66 billion for raw materials consumed, up from N10.148 billion.