The effect of the Coronavirus pandemic has eaten deep into the fabric of the Nigerian aviation sector. Last week, Nairametrics reported that while some local airlines had told their staff not to expect April salary, some slashed salaries by 50% or more, and others told 90% of their workers to embark on unpaid leave.
In separate interviews, some of the victims admitted to Nairametrics that they envied their colleagues working with International airlines that operate in Nigeria. One of them, who preferred anonymity, said, “I envy a friend that joined Turkish Airlines recently. Barely, four months that he joined, he was promoted with a 20% salary increase. People working with local airlines would bear the brunt, as our counterparts still have job security.”
Little did he know that providence had other plans for the staff of Turkish Airlines. To their dismay, the management of the airline sent a mail to all staff (about 100) on April 23, 2020, to break the news that shook them all.
In the letter, the airline stated that from April 1, 2020, salaries of all senior staff (Manager and above) would be slashed by 55% and their junior colleagues should only expect 70% of their salaries. That is not all. A great number of the workers in Lagos and Port Harcourt, Rivers State were relieved of their duties, while some were forced to embark on unpaid leave. These directives will be effective until further notice.
One of the staff based in Lagos, who prefers anonymity, told Nairametrics that he was devastated when he read the mail. According to him, he knew the Nigerian market was not isolated from the global trend and he also knew that the lockdown would affect the airline to a certain degree, but not to the extent of losing his job when he had just gotten married recently.
He lamented, “I am confused and sad not just because of the effect of the lockdown, but the management had promised that none of us would be sacked and already prepared our minds ahead for the salary cut. I don’t really know where to turn or what the future holds for my family.”
Another staff, who also pleaded anonymity, alleged that it appeared that the management was confused, as he picked holes in the letter sent to the staff, which was seen by Nairametrics. According to him, on one hand, the company stated they should all embark on unpaid leave, while on the other, it added that some of the leave days would be paid for.
“When I spoke with my colleagues in Abuja, I found that they were not asked to go on unpaid leave but only their salaries were cut by 55% and 30%. What we do not understand is that the stated four conditions in the letter only affected staff in Lagos and Port Harcourt. We have reported the case to Abuja and Headquarters but no response,” he said.
What the mail says:
The mail, which was signed by one Saygılarımla, stated, “Following the reported cases of Coronavirus (COVID-19) Worldwide including Nigeria, Turkish Airlines Management has issued a directive and allow employees to work from home.
“Suspending flights to all Turkish Airlines international network until further notice has led to an overwhelming reduction of business income. After considering all possible options, the Company has concluded that there is considerable risk that it will be unable to meet its recurrent expenses and it is, therefore, necessary to consider immediate cost-cutting measures to address the reduced cash flow.
“The Company wishes to avoid taking any terminations or redundancies so far as possible and would like as much as possible to arrive at any cost-cutting measure having consulted with all employees to arrive at an amicable decision.
“Company is now asking you to accept voluntarily the all following immediate cost-cutting choices of Temporarily proceeding on unpaid leave; Temporarily agreeing to a 30% salary reduction beginning 1 April; Temporarily working on a part-time basis; Utilizing all accumulated and available leave days as necessary.
“The above measures are intended to be temporary as the situation surrounding the current ascertained and it is hoped that all payments and benefits shall be restored as soon as normal business operations resume.
“We note that the above measures may not seem ideal to all employees and some may seek to retain the current status quo by retaining full salaries, benefits and leave days. However, please note that these measures are being proposed in order to maintain the viability of the business operations of the Company and maintaining the status quo at the moment may not be possible.”
Turkish Airlines may not be the last among international airlines operating in Nigeria to take such measures. There are indications that South Africa Airways may soon dismiss its staff in Nigeria due to some liquidity issues, which were worsened by the COVID-19 pandemic.
A few weeks ago, the state-owned carrier, suffered the latest in a series of financial setbacks after the government rejected a request by practitioners administering a restructuring of the airline for an additional 10 billion rand ($526 million) in funding.
COVID-19, VAT, FX scarcity adversely impacted our operations in 2020 – Nigerian Breweries boss says
NB Plc’s operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase and FX devaluation.
The management of Nigeria’s leading brewer, Nigerian Breweries Plc has revealed that its operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase, FX devaluation and scarcity of foreign exchange.
This statement was made by the Managing Director of Nigerian Breweries, Mr Jordi Borrut Bel, at the company’s pre-AGM media briefing for the financial year-end 2020, which held in Lagos this week.
He noted that the increase in the brewer’s cost in 2020 was due to the COVID-19 pandemic which disrupted the company’s operations, as well as the increase in VAT, devaluation and FX scarcity which has put pressure on input cost.
The Nigerian Breweries boss explained further that the increase in cost could not be fully attributed to currency devaluation and foreign exchange scarcity.
He explained that the increase in costs of goods sold, as reported in its audited financial results, could also be linked to the increase in the volume of goods sold, as the company’s sales volume in 2020 increased by almost the same percentage as the cost of goods sold.
To deal with this challenge going forward, he revealed that the company is focused on the supply chain, and will continue to seek out ways to mitigate any of the price increases coming from FX scarcity.
The company’s profitability in question?
An analysis of the company’s result revealed that despite the 4.3% increase in net revenue from N323.00 billion recorded in 2019, to a total of N337.01 billion in 2020, the company’s profit declined significantly by 53.3% to N7.53 billion.
Speaking on this, Jordi Borrut in his statement at the press briefing noted that the brewer’s business performance in 2020 was quite impressive especially in the face of the COVID-19 pandemic and economic recession. Despite these challenges, the company maintained a strong and healthy balance sheet.
“There was a slight reduction in profitability but compared to the previous year, the business witnessed an improved growth in revenue. The significance of this is that the business became more stable and healthier,” he said.
What you should know
- Nigerian breweries, being the largest brewer in the country, maintained its stance in terms of generating profits year-on-year. The company emerged as the only brewer to record a profit of N7.37 billion from its operations in 2020, 54.3% lower than 2019 figures (N16.1 billion).
- From this, the leading brewer was able to pay shareholders a total dividend of N7.5 billion, translating to a dividend of 94 kobos per share – a dividend payout in which exceeds 100%.
- While Guinness and International Breweries made a loss of N12.6 billion and N24.9 billion respectively, this reality impacted their ability to pay their shareholders dividends in 2020.
Highest paid Nigerian bank MD/CEOs of 2020
Bank MD/CEOs in Nigeria earned a combined N1.5 billion in salaries in 2020.
The banking sector, especially commercial banks, is one of the most profitable sectors of the Nigerian Economy churning out profits of close to a trillion in 2020 alone. They are also one of the highest employers of labours in the country employing over 93,000 Nigerians.
Sitting at the helm of affairs is the Chief Executive/Managing Director, the highest-ranking executive in the organization saddled with the responsibility of making the best corporate decisions, oversight of the execution of the organisation’s corporate strategies and most importantly increasing the shareholders’ return. The buck basically stops on their table.
Thus, these enormous responsibilities also come with a considerable executive compensation for their service making them ostensibly the highest-ranking staff of the bank.
In typical Nairametrics fashion, we bring to you a list of the highest-ranking bank CEOs for 2020 based on their executive compensation (exec comps). The bank MD/CEOs under our review earned over N1.5 billion in salaries in 2020.
The data was sourced from the published audited accounts of the bank and verified by Nairametrics Research.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Tantalizers Plc reports a loss after tax of N422.05 million in FY 2020.
- NASD Plc announces admission of newly demutualized NGX shares.
- Lotus Halal Fixed Income announces dividend of N20 per unit for Q1 2021.
- Friesland Campina Wamco Nigeria Plc announces AGM, proposes dividend of N6.74 per share.
- ETI appoints Akin Dada as Group Executive, Corporate & Investment banking.