Article Summary
- Nigerian Aviation Handling Company (NAHCO) Plc’s revenue soared by 63% to N16.7 billion in 2022, thanks to innovative ideas and measures adopted by the management.
- The increase in aircraft handling rates and onboarding of new routes contributed to the revenue growth despite challenges in the sector.
- NAHCO expects better performance in 2023 and is focused on cutting costs and maximizing efficiency to deliver improved results.
The resilience of the management and board of the Nigerian Aviation Handling Company (NAHCO) Plc in 2022 resulted in the company’s revenue soaring by 63% to N16.7 billion.
This is according to the company’s Chairman, Dr Seinde Fadeni, who spoke to Nairametrics.
Fadeni explained that the company came up with innovative ideas in ensuring that NAHCO performed well in the 2022 financial year, assuring that the company would continue to ensure consistent growth in its operations with the acquisition of modern handling equipment, training of staff, while also giving dividends to shareholders.
Measures adopted by NAHCO towards growth
Fadeni also listed the last year’s increase in aircraft handling rates, and the onboarding of new routes by some of its clients (foreign and domestic airlines) as some of the reasons its revenue increased last year despite some challenges in the sector.
According to him, the company’s profit before tax was N3.8 billion, which also showed a 315 per cent increase from the previous year’s figure of N925 million. He said:
- “I am pleased to report that our company, just like the industry, remained resilient, performing admirably and achieving some significant milestones, thereby delivering value to our esteemed shareholders. Our group revenue for the year 2022 was N16.7 billion, a 63 per cent increase from the previous year’s figure of N10.2 billion.
- “This was due to a combination of factors, including the increase in aircraft handling rates, on-boarding of new routes by some loyal clients such as Qatar Airways expansion into Kano and Abuja routes; and Ethiopia Airlines’ addition of the Enugu route to its destinations.
- “Air Peace’s commencements of the Port Harcourt – Cameroon route; the expansion of our excellent services, improved efficiency in our operations and increased reliance of our clients on our ability to deliver, all contributed to the positive results. Our profit before tax is N3.8 billion, a 315 per cent increase from the previous year’s figure of N925 million.”
Impact of multiple taxation on the company’s financials
Despite the increase in revenue, Fadeni, however, lamented the effect of multiple taxes on the operations of the handling company.
He also decried the inability of the handling company to source forex for its operations, saying that this sorely affected its performance in the past year.
According to him, about 95% of its equipment is sourced from abroad, stressing that the non-availability of foreign exchange at the official rates was negatively affecting its business growth.
Besides, Fadeni bemoaned that private investors obtain loans at double digits interest rates in the country, while their counterparts continue to access such at single-digit interest rates. He said:
- “So, we have not had good access to foreign currency. We can’t even try to take a loan because we won’t survive it. The interest rate is not good for any business in Nigeria. We are almost at 26 per cent per annum. What do you want to do to make that kind of money to pay back?
- “Also, what the Federal Airports Authority of Nigeria (FAAN) charges us is 5 per cent of our revenue. It shouldn’t be 5 per cent on our revenue, it should be 5 per cent on our profit. Because if you are charging me 5 per cent on revenue that means you are also charging the money I paid to my staff. You are taking 5 per cent of my staff and yet I am paying you.
- “If I want to take land from FAAN, my landlord, I will have to pay for it, yet you are taking 5 per cent of my total revenue, not profit.”
Financial expectations for the rest of 2023
Despite the aforementioned challenges, Fadeni expressed confidence that the NAHCO group would perform better in the 2023 financial year, saying that all indices pointed in this direction.
According to him, its first-quarter report, which is already in the public domain showed that its performance in the current year would surpass the past year.
- “So, I don’t have any doubt that we will surpass what we did in the 2022 financial year. And what we have also done is that we have tried to retool our system by cutting costs.
- “We are trying as much as possible to make sure that there is no waste in the system. And for every kobo we earn, we want to see what it brings out from whatever we use it for. So, I am very confident that we will do better,” he said.