Daar Communications Remains in the Woods, Records N692m Loss

Daar Communications Plc has reported a loss of N691.975 million for the first quarter ended March 31, 2017, indicating that the company would end the current financial year in another loss.

The company, which owns African Independent Television (AIT), Ray Power FM and Faji FM, had last year posted a loss of N2.139 billion, compared with a loss of N1.515 billion in 2015.

While shareholders and other market stakeholders expected an improvement in its performance, the company has reported a loss of N691.975 million in 2017, compared with a loss of N691.168 million for the corresponding period of 2016.

An analysis of the unaudited results showed that Daar Communications posted a revenue of N904 million, up from N794 million in 2016. Cost of sale increased to N1.172 billion, from N1.052 billion, making the company to end the period with a gross profit of N267 million in 2017, as against N258 million in 2016. Distribution cost increased from N15.2 million to N21.7 million, while administrative expenses was reduced to N374.899 million from N386.446 million. Similarly, finance cost fell from N28.369 million to N19.774 million. However, taxation rose N3.259 million to N10.125 million.

Consequently, Daar Communications ended the Q1of 2017 with a loss of N691.975 million.

Chairman of the company, Chief Raymond Dokpesi (Jnr.) had recently attributed the poor performance of the company to the economic recession, which he said pushed the company’s operating loss from N1.515 billion in 2015 to N 2.139 billion in 2016.

He stated this while addressing shareholders in Abuja at a combined 2015/2016 annual general meeting (AGM) that the economic recession in the country.

“The adverse business environment together with the biting economic recession caused the 2016 turnover of the company to plummet to an all time low of N 3.733 billion representing 47 per cent decline over 2015 earnings. The loss after taxation in 2016 was N2.139 while in 2015, loss after taxation was N1.515 billion. As encapsulated earlier, the losses were as a result of the astronomical increase in cost of operations occasioned by the economic recession and the severe devaluation of the naira which could not be matched with corresponding growth in earnings as the advert budget in the industry declined in the ensuing period,” he said

He, however, assured shareholders that there was a hope of the company returning to profitability in the nearest future following a conscious business restructuring and operations digitalisation and expansion project already at its final implementation stage.