WorldStage Newsonline– NASCON Allied Industries Plc (NASCON) has released its unaudited second quarter 2024 (Q2-24) financials as profit after tax declined by 13.0% y/y to N3.61 billion from N4.15 billion in (Q2 2023.
The result showed that profit before tax declined by 12.5% y/y to N5.39 billion from N6.16 billion in Q2-23.
The earning per share (EPS) during the quarter dropped toN1.36 from N1.57 in Q2-23, resulting in H1-24 EPS of NGN1.83 (H1-23: NGN2.20). The company attributed the decline in EPS to the increase in cost of sales (+72.3% y/y) recorded in the reporting period.
Revenue for the period grew by 48.0% y/y (H1-23: 51.9% y/y), driven by price increases instituted on NASCON’s salt products amid higher volumes.
Across its business regions, revenue from the North (72.0% of revenue) continued to be the largest contributor to total sales outturn, growing by 26.3% y/y. In the same vein, revenue from the Western (+15.5% y/y | 20.0% of revenue) and Eastern (+59.9% y/y | 8.0% of revenue) regions maintained the momentum witnessed in Q1-24.
Quarterly analysis of the numbers highlights the strong performance achieved in Q2-24, as revenue grew by 23.2%, following a broad-based increase across all regions – North (+11.0% q/q), West (+10.7% q/q) and East (+56.0% q/q).
Gross margin fell by 15.96 ppts y/y to 40.5%, driven by a substantial increase in the cost of sales (72.3% y/y) due to inflationary pressures on raw material costs.
A breakdown of the cost lines revealed that the larger share was from expenses incurred on raw materials (+71.7% y/y | 86.7% of COGS) and manufacturing (+125.1% y/y | 9.0% of COGS), due to the sticky inflationary pressures. On an HY basis, gross margin (-601bps y/y) declined to 43.7%.
Consequently, EBITDA (-982bps y/y) and EBIT (-906bps y/y) margins contracted to 22.1% and 20.2%, respectively, amid a 12.8% y/y growth in operating expenses.
Moreover, net finance costs declined by 53.0% y/y, underpinned by the faster growth in finance income (+43.1% y/y) relative to finance costs (+17.8% y/y).
The higher finance income resulted from increased interest income on short-term fixed deposits (+43.0% y/y).
