NAHCO loses N7bn to pandemic, declares N203 million dividend

Nigerian Aviation Handling Company Plc (NAHCO Plc), has declared a dividend of N203 million for the 2020 financial year despite losing an estimated N7 billion to pandemic disruption.

The marginal profit earns shareholders a gross dividend of 12.50 kobo per ordinary share of 50 kobo each. The Guardian earlier reported a general slump in air cargo movement in 2020. Air cargo data obtained from major players in local aviation showed about 16 per cent decline in cumulative imports in 2020, compared with 2019 figures. Export on the other hand also recorded a cumulative 10 per cent decline for 2020 following months of lockdown and flight restrictions due to the pandemic.

Chairman, Board of Directors, Dr. Seinde Fadeni, during the 40th Annual General Meeting (AGM), held in Lagos recently, said despite the tough year for the company, NAHCO Plc withstood the challenges and chose to reward its shareholders for their support.

The group, in a statement, noted that the revenue of the company reduced by 27 per cent to N7.330 billion, while gross profit was N2.285 billion in the financial year ended December 31, 2020.

The 2020 yearly report and accounts of the group indicated that the NAHCO Group earned N2.3 billion as gross profit in 2020, whereas it earned N3.3 billion in the 2019 operating year, indicating about 30 per cent drop in the year under review.

The group also earned N478 million as profit from operations in the 2020 financial year, but earned N1.46 billion in the 2019 operating year.

The group’s profit before tax also dropped from N1.34 billion in 2019 to N361 million in the year under review. However, profit for the year 2020 was N302 million, unlike the N717 million in 2019, indicating a 57.9 per cent reduction.

The Chairman of NAHCO Group explained that the company would continue to be the leading ground handling company in Africa in terms of market share, client base, revenue, and profitability.

Fadeni regretted that the outbreak of COVID-19 pandemic, which crippled activities, affected its performance and approval of higher dividends to the shareholders but expressed optimism that the company would return to the verge of high profit in the 2021 financial year.

“We lost half of the year to the pandemic. The airspace was shut and limited to emergency cargo and evacuation flights. Still, in 2020, the Nigerian economy shrunk by three per cent while inflation rose from 11.4 per cent in 2019 to 12.4 per cent, leading the country into a recession. Also, the uncertainties towards the build-up to the United States election in quarter four and the unabating COVID-19 pandemic propelled drops in the world economy with far-reaching implications on Nigeria’s oil exports.”

Group Managing Director, Olatokunbo Fagbemi, said within the year under review, the operating cost of NAHCO decreased by 23 per cent, while administrative expenses decreased by six per cent.

Fagbemi noted that within the past year, the management took some unpopular, but inevitable decisions because of the pandemic.

She explained that some categories of staff took between 10 to 50 per cent pay cut for some months, while promotion and recruitment was frozen, stressing that the reduction in the administrative costs helped in reducing the liability that would have been incurred.

She noted that the group earned an increase in cargo revenue in the last quarter of 2020, while it also on-boarded new airlines; Skywards Aviation and United Nigeria and handled most of the chartered flights.

She disclosed that NAHCO received the sum of N76 million as palliative from the Federal Government to cushion the effect of the COVID-19 pandemic.