Nascon Allied Industries Slows Production Cost, Lifts Profit To N13.7bn At Full Year 

Nascon Allied Industries Plc slowed down production costs while sales grew impressively in 2023, which created room to lift profit a clear two and half times to N13.7 billion in the year.

The audited financial report of the salt manufacturing company for the full year ended December 2023 shows that the cost of production increased by 6.6 per cent to N36.5 billion – a big slash from a rise of 60.6 per cent in 2022.

The company’s sales revenue advanced close to six times as fast as production costs at 37.5 per cent to N80.8 billion in the year, slowing down however from a top record growth of 76.7 per cent to N58.8 billion in 2022. The company’s ability to grow sales that much and peg production costs that low is the critical combination that yielded the elevated bottom line to the cheer of shareholders in the year.

The good operating results also came with some luck in escaping the devastating foreign exchange losses that undermined equally good operating performances across sectors and industries in 2023. The low-cost advantage in 2023 is reflected in a cut down in the average cost of producing the naira of sales from 58 kobo in 2022 to 45 kobo. The cost saving powered a major increase of 80.6 per cent in gross profit, which amounted to over N44 billion at the end of the year.

Two other favourable developments on the side of earnings reinforced the high rise in gross profit. These include other operating gains of N267.5 million that took the place of other operating losses of N794.6 million in the preceding year. The other is other income that grew by over 56 per cent to over N194 million in the year.

Part of the cost saving and revenue gains was devoted to distribution costs that rose by close to 58 per cent to roughly N19 billion in the year. Pressure also mounted from administrative expenses that went up by 50 per cent to N4.7 billion. In all, the cost saving and revenue gains more than compensated for the cost increases, lifting operating profit by 143.4 per cent to over N21 billion.

Further strength came from finance income that grew by 135 per cent to N927 million – a more rapid growth than the increase of 106.5 per cent in finance expenses to N1.4 billion.

Nascon Allied’s borrowings and leases are slightly up from N8.5 billion at the end of 2022 to N9.4 billion at the end of 2023. Pre-tax profit grew by 146 per cent to close at N20.6 billion for the year while after-tax profit rose by 151 per cent to stand at N13.7 billion for the full year.

Net profit margin is quite improved from 9.3 per cent in 2022 to 17 per cent at the end of the 2023 operations. Improved sales and profit margin gains are the key facts behind the company’s good earnings story in 2023.

The strong earnings elevation has happened for Nascon Allied Industries for the second year after lifting the bottom line a clear 84 per cent to N5.5 billion in 2022. The company earned N5.18 in the full year of 2023, rising from N2.06 per share in the preceding financial year.