By Naomi Uzor
Trans-Nationwide Express Plc (TRANEX) said it recorded N481 million in turnover for the 2008 financial year compared to its previous turnover of N383.3 million, indicating a 25 per cent growth over year 2007.
Speaking at the 16th Annual General Meeting (AGM) of TRANEX, the Chairman, Chief Eric Nwobi, said the audited account shows a turnover of N481 million, while profit after tax was N47.4 million, an increase of four percent over the 2007 figure. The low percentage increase, he explained, was attributable to the spiralling cost of operations.
â€œThe year 2008, ended up posing more complex challenges in the operating environment than envisaged. The financial crisis which started in the United States spread across global economies and precipitated a global economic turndown.
â€œNigeria was not immune to this crisis. The financial market that was very buoyant in the beginning of the year, began a sharp downward slide by the second half of the year, and fell to a depressing level by the end of the year. The decline in the international price of oil by the third quarter of the year coincided with this downturn and further worsened an already bad situation,â€ he stated.
According to him, in Nigeria, the upheavals in the Niger Delta as well as the declining revenue from oil put pressure on the countryâ€™s foreign reserves so that by the end of the year the naira depreciated drastically against the dollar. The energy sector further deteriorated in the year due to huge drop in power generation. As a result, cost of operations in most sectors skyrocketed and the company was not spared, but it remained afloat.
â€œThe industry has continued to attract new entrants due to the perceived profitability of the business. A note-worthy development was the setting up of courier companies by banks to handle their courier and logistics business presumably in a bid to reduce their operating costs. The irony of it was that suddenly, some of our key clients became our competitors, the major industry players, on their own resorted to price wars in order to at least retain their share of the market. Product differentiation and diversification to related business areas were part of the survival strategy,â€ he said.
Furthermore, on the issue of funding, he said in their bid to raise the much needed funds for further development of their business through additional equity by way public and rights issue during the year did not materialize due to crash of the capital market from the middle of the year, a solution which still persists.