CWG records N128 million profit in 2016
CWG Plc has declared profit after tax of N128 million in its 2016 operations, despite the microeconomic headwinds suffered in its Nigeria and Ghana businesses. This came after the company eliminated past losses of N1.8 billion incurred in 2015.
Giving details of the challenges faced by CWG throughout its business transactions in 2016, the Group Chief Executive Officer, James Agada, was quoted in a statement as saying: “The company started the 2016 business with microeconomic headwinds that started in Nigeria in 2015, as a result of low price in oil, uncertainty in the foreign exchange market and the recession. We also had presidential elections in Ghana, one of our operating countries, and these headwinds severely affected our technology business in 2016.
“But despite the challenges, the company was able to generate a profit of N127,675,000.00, compared to the loss of N1,795,846,000.00 in 2015. As we promised at the end of 2015, we continued in the repositioning of our company to exit from businesses that we were unable to generate and protect profit and margins.
“We hence refocused more on service contracts with better margins. We also walked away from businesses where we could not cover the foreign exchange risks. By streaming our businesses, we were able to reduce our administrative costs from N4.41 billion in 2015 to N2.61 billion in 2016, a 41 per cent reduction, which allowed us to make a profit, even though our revenue dropped by 47 per cent, compared to last year.
“Our business mix has also tilted in favour of subscription service contracts, which have better margins and predictability, hence raising our gross margins to 24 per cent from the 16 per cent in 2015,” Agada said.
The statement also quoted the Chairman, Abiodun Fawunmi, as describing the operating environment and the financial performance, as one of the most eventful for the company, and the Information Technology (IT) industry, in the face of many economic uncertainties.
He however noted that despite the odds, CWG recovered from its loss position of N1.8 billion in 2015, to achieve a profit after tax status of N128 million in 2016.
“Your company therefore exudes an impressive and promising outlook for current and potential investors, considering that some quoted companies recorded a bearish trend, following the economic headwinds in the country last year,” Fawunmi said.
The Vice Chairman, CWG, Austin Okere, promised shareholders that the company would continue to diversify its business activities in Nigeria, Ghana and Cameroon, in order to declare dividend in next financial year.
He said that the current collaboration between CWG and state governments in Nigeria, in the area of internally generated revenue (IGR) for the states, using modern technology, would further boost the revenue stream of CWG.