Computer Warehouse Group posts N12b revenue in nine months
Computer Warehouse Group Plc has posted a revenue of N12.32 billion for the nine months ended September 30, 2015, showing an increase of nine per cent compared to N11.2 billion achieved in the corresponding period of 2014.
However, the various economic challenges including unstable foreign exchange market, increasing inflation and interest rate made the company to end the period with a loss after tax of N516 million as against a profit of N153 million in 2014.
According to the company, given the its dependence on foreign inputs, the volatility in the foreign exchange market impacted negatively on its bottom line.
“The growth in exchange differences coupled with the squeeze in dollar liquidity exacerbated as the value of the naira continued to fluctuate, leading to an increase in operational expenses by 11 per cent to close at N2.15 billion compared to N1.9 billion in 2014.”
The company further explained that an income reversal of N103 million due to the cancellation of a transaction duly recognised in Q4 2014 also impacted negatively on the bottom line.
CWG explained that a combination of negative Central Bank of Nigeria (CBN) policies around foreign trade increased the company’s borrowing cost, which led to growth in interest and finance charges by 77 per cent to N123 million, up from N69 million recorded in 2014.
“ Asides from the high interest rate charges during the period, other factors such as transaction volumes, use of financial instruments for hedging foreign exchange risks in Q1 2015 and borrowings in Q1 to confirm Letters of Credit contributed to the growth in charges. The above factors affected the YTD Q3 2015 profitability, resulting in a loss of N516 million compared to a profit of N153 million for the same period in 2014,” the company said.
However, the company disclosed that with the ongoing changes in the global ICT space, it is taking proactive measures to improve its growth indices through its cloud and subscription based business in addition to its traditional reseller business.
“The company has begun to roll out the new initiatives under the subscription business and subscribers are gradually growing on these platforms which are designed to empower and improve businesses across Africa,” the company said.
The company explained that it made significant in-road with the Electricity Theft Detection & Prevention Systems as purchase of about 3,000 units of its anti-theft solutions has been received from a leading electricity distribution company (Disco).
“We expect significant uptake in the next year as the solution will boost the revenues of the Disco and reduce losses in the electricity network. Given the challenges in boosting internally generated revenue (IGR) for all tiers of government, CWG introduced an IGR solution to help state and local governments more efficiently manage various streams of activities that enable them define, issue, collect payment, validate and enforce various permits.