Vitafoam Shareholders to Receive 15kobo Dividend Despite Loss

In spite of posting a loss for the year ended September 30, 2017, Vitafoam Nigeria Plc has recommended a dividend of N156.36 million for the shareholders.

The company, apparently affected by the inclement operating environment, announced a loss in its operations. But despite the loss, the directors have recommended the dividend, which translates to 15 kobo per share.

Details of the audited results of the company showed that revenue stood at N17.696 billion, up by N4.125 billion or 30 per cent the N13.569 billion recorded in 2016. Cost of sales rose by N3.698 billion, that is 41.51 per cent from N8.907 billion to N12.606 billion. Consequently, the company ended with a gross profit at N5.089 billion, indicating a growth from N4.661 billion in 2016.

Although other gains stood at N283.565 million compared with N284.856 million in 2016, administrative expenses dropped slightly from N3.426 billion to N3.313 billion.

However, distribution costs rose from N632 million to N726.182 million, just as operating profit rose from N888 million to N1.333 billion. While finance income dropped from N68.257 million to N61.152 million, finance cost jumped by about 54 per cent from M895.059 million to N1.376 billion due to high interest on loans and overdraft.

This reduced profit before tax to N18.133 million from N61.198 million in 2016. An increase in the tax expense further compounded the problem of the company. Tax expense increased from N93.23 million to N127.69 million, compared with N145.823 million, making the company to close the year with a loss of N127.69 million compared with N32.032 million.

The Group Managing Director and Chief Executive Officer of Vitafoam, Mr. Taiwo Adeniyi had last said the company’s shareholders are their pride.

“Our shareholders are our pride. We have an obligation to work very hard to ensure that they are rewarded. We have always sustained our culture of shareholder value and we shall continue to appreciate our shareholders’ advice on how to move the company forward. It has been difficult to plan under recession,” Adeniyi said.

Speaking on the manufacturing sector, Vitafoam boss noted that companies that import most of their raw materials had challenges with the exchange and availability of Dollars due to improper alignment of fiscal and monetary policies.

According to him, the federal government’s policy of preferential allocation of Dollars to genuine manufacturers did not achieve desired result because it is cashed backed. He explained that the manufactures could not take advantage of the special window for forex because many of them could not back their high demand with cash while the banks who are supposed to lend money had liquidity problem.