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First Aluminium boosts profitability amidst tight operating environment

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First Aluminium Nigeria Plc has reported a gross profit growth of 63.8 per cent in half year 2012, amidst a challenging operating environment.

The company recorded a gross profit of N226 million in first half 2012, compared to N138 million posted in the same quarter previous year. Its turnover rose by 20.7 per cent, recording N4.61 billion compared to N3.82 billion in previous year. However, its fixed assets dropped slightly to N6.1 billion from N6.2 billion in same period last year.

Ban Elfrink, Managing Director of the company presenting this at facts behind the figures at the Nigeria stock Exchange, NSE, said that the company’s market share is going up not minding the operating challenges, adding that the company has the great opportunity to grow owing to the fact that the industry is vibrant in the country.

“Manufacturing of aluminium product in Nigeria is estimated at 48,000 tonnes per annum. Imports are 132,000 tonnes, which is an annual capital outflow of N65 billion. Manufacturers are operating below 35 per cent capacity and extra volume will give efficiency gains and will generate jobs.”

He said that according to Business World “Nigeria’s 100 largest companies in 2011,” the company was ranked 19th in the manufacturing sector, 60th by assets and 46th by number of employees.

“This award is very special to us. Not only because it recognizes the efforts that all employees at First Alumimium have made the last years to become the most customer friendly supplier in Nigeria, but even more, it is an award for all Nigerians who begin to realise that patronising made in Nigeria products is better than buying imported products that are most of the time substandard. The Standard Organisation of Nigeria has revealed that presently, 85 per cent of all imported goods are substandard,” he said.

Taking a cursory look at the challenging operating environment, he said high cost of energy in Nigeria is increasing the company’s cost of production, just as high interest rate and foreign exchange exposure, coupled with poor government infrastructure are making the operating environment tougher for investors.

In his remark, Oscar Onyema, NSE CEO challenged the company and all the companies quoted in the Building Materials Sub-sector of the Exchange to elevate their efforts in dealing with current housing deficit confronting the country.
Onyema said that according to official statistics, Nigeria’s housing deficit currently stands at about 16 million housing units.

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