NAHCO cut personnel and administrative expenses by N1 billion in the first quarter to prevent a decline in profit, as revenue losses and rising service costs led to unexpected operational pressure.
The company’s financial report for the first quarter ended March 2026 shows a drop in turnover from over N17 billion in the same period in 2025 to N16.4 billion. The loss of revenue is led by earnings from the company’s main income line: aircraft handling services, which declined by N1 billion to N11 billion during the period.
Revenue losses for the quarter are attributed to the crisis in the Middle East, which impacted flight operations worldwide. This contrasts with the preceding financial year, when the company grew turnover by 23 per cent to N65.8 billion.
NAHCO’s management resorted to cost-saving, and the hammer fell on administrative expenses as well as finance charges to patch up the hollows of revenue disappointment and increase in cost of sales.
Adding to the revenue strain is an increase in service costs, which grew from less than N7.6 billion to roughly N8 billion over the period. The increase in cost for generating lower revenue volume caused a drop in gross profit, which decreased from about N9.5 billion to N8.5 billion year-on-year.
Costs had to decline at controllable levels to prevent revenue loss and a drop in gross profit from hitting the bottom line. The main cost-saving point is administrative expenses, which went down from N3.4 billion to N2.4 billion over the review period.
The drop in administrative costs is led by personnel expenses, which fell from over N1 billion to less than N840 million during the period.
Despite lost revenue and increased cost of sales, a reduction in administrative expenses led to overall savings. Against the drop in gross profit, operating profit edged up to N6.3 billion year-on-year at the close of the first quarter.
The company’s management further extracted cost savings from finance expenses, which dropped from about N557 million to N467 million over the period. Finance income surged from N169 million to N402 million, cutting net finance costs from N398 million to N65 million.
The two-level cost savings changed the company’s earnings story for the first quarter from a drop in gross profit to an improvement in pre-tax profit.
NAHCO closed the first quarter operations with a pre-tax profit of N6.2 billion, which is an improvement of 7 per cent from under N5.8 billion in the same quarter in 2025.
Part of the profit improvement was, however, claimed by an increase in income tax expenses from N1.4 billion to N1.6 billion, which permitted only a marginal improvement in the profit for the quarter to N4.5 billion.
The company had grown its net profit by 36 per cent to N17.50 billion in the 2025 full year.
Earnings outlook for the half year indicates that revenue losses look likely to sustain and even worsen for the company for the second quarter.
Whether management would be able to defend the bottom line this time or succumb to a profit drop will be the point to watch out for from the aviation handler at the end of the half-year trading.
