By Peter Egwuatu

Cement Company of Northern Nigeria (CCNN) Plc has lamented the difficulty in securing Foreign Exchange, (Forex) and high operating cost as major factors affecting the manufacturing industry in the country, even as it recorded a turnover of N13.04 billion in 2015.

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Commenting on its 2015 financial result released on the Nigerian Stock Exchange, NSE, Managing Director, CCNN Plc, Malam Ibrahim Aminu, said the company’s performance in 2015 showed steadiness and resilience, when viewed against the background of macroeconomic challenges especially in the areas of energy supply and foreign exchange.

Aminu noted that as in all cement plants, CCNN has also been adversely affected by the recent challenge of rising cost of spares and difficulty in importation of equipment due to restrictions regarding foreign exchange.

He said the company is making efforts to convert to solid fuels in order to reduce energy cost since the company does not have access to gas at the moment, due to location disadvantage.

According to him “Without access to gas because of its location in Sokoto State, CCNN depends on Low Pour Fuel Oil (LPFO), which it sources from Nigeria National Petroleum Corporation (NNPC), Kaduna Refinery. CCNN is therefore exposed to twin risks of the high cost of LPFO and the fluctuation in supply. LPFO price accounts for 65 per cent of the company’s cost of production. When the supplies become erratic or entirely unavailable, more expensive imported LPFO is used by CCNN at a higher cost.

“A cost-effect analysis shows that, 10 per cent annual increase in the price of LPFO wiped away N619.05 million and N592.37 million from pre-tax profit in 2014 and 2015 respectively. CCNN had recorded profit after tax of N1.92 billion on turnover of N15.12 billion in 2014.”

Major highlights of the audited report and accounts of CCNN for the year ended December 31, 2015 showed that the company recorded pre and post tax profits of N1.55 billion and N1.20 billion on a turnover of N13.04 billion during the year. Gross profit stood at N3.96 billion.

The company improved its intrinsic value during the year with net assets per share rising by seven per cent from N7.52 in 2014 to N8.07 in 2015. Total assets also rose by nine per cent from N15.78 billion to N17.15 billion.

Non-current assets had grown by 21 per cent from N8.37 billion to N10.12 billion. Shareholders’ funds also improved by seven per cent from N9.45 billion in 2014 to N10.14 billion in 2015.

The Board of Directors has recommended distribution of a total of N125.7 million to shareholders as cash dividends for the 2015 business year, representing a dividend per share of 10 kobo.

The dividend recommendation implies that the Board of Directors took a long-term and prudent view of dividend payout by retaining higher net earnings to support the company.