Chemical Allied Product Plc (CAP) in its 2020 unaudited financial statement has declared that the company made a profit after tax of N361.6 million in the fourth quarter of 2020.
This is according to the information and figures contained in Companys’s un-audited results, which was published on NSE’s website today after the close of the market.
The report revealed that the profit, which CAP Plc made in the last quarter of 2020, was 28.1% lower than the profit it made in the corresponding quarter of 2019, as the company’s profit after tax declined from N502.7 million to N361.6 million.
Revenue increased to N2.75 billion, up by 4.4% Y-o-Y.
Gross profit decreased to N1.06 billion, down by 13.2% Y-o-Y.
Gross Margin declined to 38.7% from 46.5%. Showing growing cost inefficiency.
Other Operating Income decreased to N22.77 million, down by 8.03% Y-o-Y.
Selling and Marketing expenses decreased to N173.9 million, down by 20.99% Y-o-Y.
Administrative expenses increased to N437.6 million, up by 12.4% Y-o-Y.
Operating Expenses increased marginally N612 million, up by 0.30% Y-o-Y.
Earnings Before Interest and Taxation (EBIT) decreased to N475 million, down by 25.8%
Net finance income decreased to N56.8 million, down by 42.6% Y-o-Y.
Profit for the period decreased to N361.6 million, down by 28.1% Y-o-Y.
What you should know
4.4% increase in revenue in the fourth quarter of 2020 was supported by a 30.4% strong volume growth across key product lines. However, CAP’s Gross profit during this period was pressured by higher input costs on account of supply chain disruptions resulting in a scarcity premium on raw materials which was in short supply.
Consequently, the high input costs pressured profitability in Q4 2020, and this was further compounded by the increase in Administrative expenses which CAP incurred during the quarter.
What they are saying
Managing Director of CAP Plc, David Wright, while commenting on the performance stated that:
“CAP recorded modest top-line growth last year despite the COVID-19 lockdown in the second quarter of 2020 and protests in the fourth quarter of 2020, effectively losing 7 weeks of sales. We are encouraged by the growth in revenue which has been solely driven by underlying volume growth in line with our strategy.
“Alongside the rest of the world, we experienced supply chain disruptions which impacted our raw material sourcing and resulted in input costs pressures. We have embarked on initiatives focused on mitigating these disruptions and expect to see positive results in 2021.
“We announced the proposed merger between CAP and Portland Paints and Products Nigeria Plc in the fourth quarter of 2020. We have received preliminary regulatory approvals and an order from the Federal High Court to hold a Court-Ordered Meeting. Merger completion is subject to shareholder approval and final regulatory approvals and we expect to conclude the merger in the first quarter of 2021.”