Vitafoam posts N522.7 million PBT in 2016
Vitafoam Nigeria Plc has posted a Profit Before Tax (PBT) of N522.7 million in its 2016 operations, against N489.5 million achieved in corresponding period in 2015.
The company’s Profit After Tax (PAT) also grew from N196 million in 2015 to N412 million during the review period. However, total revenue declined from N15.15 billion to N12.19 billion in 2016.
The improved performance in profit, according to the chairman, Bamidele Makanjuola, was due to cost optimisation strategy, adopted to control the rising cost of operations. He added that the company also streamlined production processes across major plants to enhance efficiency.
Addressing shareholders during the company’s 55th yearly general meeting held in Lagos at the weekend, Makanjuola explained that the firm’s turnover was impacted largely by the Foreign Exchange (forex) upsurge and declining purchasing power which ultimately affected cost of operations adversely.
According to him, the forex rationing policy of the Central Bank of Nigeria (CBN) impaired the capacity of the service and most of the company’s letters of credit opened for the importation of critical raw materials.
“Consequently, all our plants operated at approximately 40 per cent of installed capacity, using mostly chemicals procured at prohibitive prices from local suppliers, coupled with the astronomical rise in banks’ lending rate.”
He however assured shareholders that the management has instituted a proactive procurement strategy to attenuate the effect of price instability in the raw materials caused by forex volatility.
Furthermore, he expressed optimism that with the firm’s commitment to long-term strategic plan, which is already yielding positive outcome would boost its growth profile in the current financial year as some of its subsidiaries has attained profitability status in 2016.
“Iam particularly gratified to inform you that the insulation business, Vitapur Nigeria Limited has successfully overcome initial start up challenges and posted its first profit during the financial year.
“This hi-tech business remains one of the flagships of our business with huge potentials for tremendous growth. We shall continue to leverage our first mover status to position the company as dominant brans in the insulation business within West Africa sub-region.
“The soft furnishing business Vitablom , navigated difficult hurdles in the operating environment to sustain its profitability trend. This subsidiary remained resilience and consistent in performance over the years.”
To strengthen the potentials of the business segment for value creation, he said the company has completed arrangements to install a fibre sheet processing plant for the production of fiber based materials in the current financial year, adding that the initiative would support the business top and bottom line growth.
The Managing Director of the company, while fielding questions from Journalists on Vitafoam’s integration with Vono, said: “VONO has been fully integrated and it is a full subsidiary of Vitafoam now, in fact the regulatory authorities have come to do the post merger audit and they have finalized all of the details.
“So, it is a full subsidiary of Vitafoam now and that is why it is presently called VONO Furniture product Limited. It is no longer VONO Plc, you can see that it’s been delisted so it is no longer on the SEC’s platform.”