Julius Berger groans under N90b contract debt

JuliusBergerWITH a debt burden of over N124 billion from unpaid executed construction contracts and loans from commercial banks, construction giant, Julius Berger Nigeria Plc may have come under a serious strain as its turnover for the 2014 financial year dropped by seven per cent.

Specifically, the debt profile of the company is attributable to N90 billion debt owed the company by both private and public organization and over N34 billion the firm borrowed from commercial banks.

According to the firm, the debt burden has forced it to downsize about five per cent of its workforce as well as resort to commercial bank loans to sustain its business in the country.

Unfolding these realities in Abuja, on Monday, at the company’s 45th yearly meeting, its Chairman, Air Vice Marshall Mohammed Nurudeen Imam ( rtd.) noted that the present condition has led to the company posting a slight reduction in its turnover from N212.7 billion in 2013 to N196.808 billion in the 2014 financial year, representing a decline of seven per cent.

Imam said: “While I can report that sites performed satisfactorily, operations faced many difficulties in general. The foremost challenges were direct fallout of economic trends in Nigeria. The economy was hit by various factors simultaneously; the unfortunate but well managed EBOLA Virus, the failing crude oil price at the international markets and the adjustment of the Naira are but a few.

“Such serious issues adversely influenced the business climate as well as financial budgets and subsequent funding nationwide and resulted in overall downward trend which picked up momentum by the third quarter of the year. The situation led to on-going delay in payments by major clients especially in the public sector and therefore negative cash flow issues, causing the higher financial cost.”

The Chairman then explained that to ensure financial viability, the management made tremendous efforts to reduce outstanding payments and to strengthen cash flow.

He announced however that despite the tight operating condition, Julius Berger Plc’s turnover remained stable with only a slight reduction from the previous reporting year.

His words: “ Consequently the Board of Directors is able to maintain dividends at the same level as the prior reporting year at N2.70 per ordinary share. Approved bonus shares of one new ordinary shares for every ten existing ordinary shares already held were actualized in the 2014 financial year, resulting in an increased total gross dividend pay out of N3.56 billion.”
Meanwhile, shareholders of Julius Berger Nigeria Plc have commended the board and management of the construction giant firm for the N3.56 billion dividend paid for the 2014 financial year.

The shareholders also congratulated the board and management for other strategic initiatives being undertaken to keep the company on the path of sustainable growth in the years ahead.

However, the shareholders charged the management of the company to go all out for an aggressive recovery of about N90 billion debt owed the company by both private and public organizations in a view to pay-off the over N34 billion it borrowed from the commercial banks.

The N3.56 billion declared by the company translates into a total dividend of N2.70kobo dividend per share.

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