Lagos -- Vitafoam Nigeria has posted a profit before tax (PBT) of NGN 522.7 m ($ 1.6 m) in 2016 up from NGN 489.5 m in 2015.
Details appeared in Nigerian newspaper, the Guardian.
The company’s profit after tax also grew from NGN 196 m in 2015 to NGN 412 m during the review period. However, total sales declined from NGN 15.15 bn to NGN 12.19 bn in 2016.
The improved performance in profit, according to chairman, Bamidele Makanjuola, was due to cost optimisation and streamlined production processes across major plants.
Addressing shareholders during the company’s 55th yearly general meeting held in Lagos at in early March, Makanjuola explained that the firm’s turnover was impacted largely by Foreign Exchange movements which reduced purchasing power in local currency which 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 under which his firm can import raw materials.
“Consequently, all our plants operated at approximately 40 % of installed capacity, using mostly chemicals procured at prohibitive prices from local suppliers, coupled with the astronomical rise in banks’ lending rate,” he said.
His firm has instituted a procurement strategy to reduce the effect of raw material price instability.
“I am 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,” Makanjuola said.
He continued: “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.”
Vitafoam Nigeria has also purchased local furniture maker Vono and it is “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 finalised all of the details,” Makanjuola said.
“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.” Makanjuola added.