‘How Beta Glass sustained profitability in recession’

Beta Glass Plc, one of Nigeria’s glass makers, has stated that price adjustments, exposure to the export market among other strategies aided its revenue profile and profitability during the 2016 financial year.

Specifically the firm’s revenue rose by 20 per cent to N19.09 billion while profit after tax (PAT) surged 91 per cent to N3.79 billion.According to Beta Glass’ financial statement, the company made N1.913 billion foreign exchange gain in 2016 owing principally to its consistent export sales to Cameroon, Cape Verde, Gambia, Ghana, Guinea, Liberia and Sierra Leone.

Speaking at the firm’s yearly general meeting held in Lagos, recently, the Chairman of Beta Glass Plc, Abimbola Ogunbanjo, said the company was the top performing stock on the Nigerian Stock Exchange (NSE), having gained 39.12 per cent year-to-date, outperforming all others, including the NSE All Share Index.

“I should perhaps point out that your company was the top performing stock on the NSE having gained 39.12 per cent year-to-date outperforming all others, including the NSE All Share Index,” Ogunbanjo, who is also the Managing Partner of the famed law firm, Chris Ogunbanjo LP, told shareholders.

The Chairman said the rise in the company’s turnover from N15.953 billion in 2015 to N19.091 billion in 2016 was mainly driven by price increases in response to inflationary trends and partly by volume increases in order to offset the rising input costs during the year.

He explained that the rise in cost of sales from 76 percent of Net Trade Sales (NTS) in 2015 to 79 per cent of NTS in 2016 reflected the increase in raw material prices, the impact of which was somewhat offset by price adjustments.

Nigerian manufacturers were hard hit by dollar shortages in 2016 as many firms struggled to find foreign currency with which to import raw materials, spare parts, machinery and equipment.

About 54 manufacturing firms shut down during the year, according to the Manufacturers Association of Nigeria (MAN), but Beta Glass Plc was not only able to navigate through recession but also out-performed across fundamental economic parameters.

“Despite the high input costs and pressure on the availability of foreign exchange, your company was able to effectively manage the finance income/ costs with overall lower average borrowings compared to the previous year,” the company’s chairman said.

“The Directors have decided to recommend to the shareholders a gross dividend of .98 kobo per share subject to 10% withholding tax, after considering the current and future cash requirements for investments to achieve sustainable and profitable growth which incidentally is the highest dividend payout in the company’s history,” Ogunbanjo said.

Beta Glass is a subsidiary of Frigoglass Industries Limited, exporting glass packaging materials to 13 countries. The company has manufacturing plants in Ughelli, Delta State, and Agbara, Ogun State, with three furnaces that exceed 600 tons of produced glass containers per day.

Breweries account for 43 per cent of its total glass unit sales while soft drinks constitute 29 per cent. Wine and spirits make up 12 per cent just as pharmaceuticals and cosmetics’ patronage is estimated at 16 per cent.

The company has scheduled a furnace cold repair at its Ughelli plant to extend its life-span and raise production capacity.“Despite all the external environmental factors during the year, I am pleased to report that our company focused on creating value for our esteemed shareholders and was able to achieve the level of success which is now recorded,” Ogunbanjo said.