Nigeria: Despite Covid-19 Challenges, NAHCO Pays Dividend to Shareholders

2 August 2021

The Nigerian Aviation Handling Company Plc (nahco aviance) has paid gross dividend of 12.50 kobo per ordinary share of 50 kobo each, amounting to N203 million despite the devastating effect of covid-19 in the aviation industry.

Chairman of the board of directors, Dr. Seinde Oladapo Fadeni announced the payment during the company's 40th Annual General Meeting (AGM) held in Lagos.

The company said notwithstanding the estimated loss of about N7 billion to the Covid-19 pandemic in 2020 by ground handling companies operating in Nigeria, which limited their performances, NAHCO Plc was still able to reward its shareholders for their support.

The company said its group revenue has however reduced by 27 per cent to N7.330 billion, while gross profit was N2.285 billion in the financial year ended December 31, 2020.

The AGM, which was held by proxy had a few people in attendance, while the proceeding was streamed live in conformity to the Covid-19 protocols. The Board assured its shareholders of enhanced returns on their investments in the years ahead.

The 2020 annual report and accounts of the group had indicated that it earned N2.302 billion as gross profit in 2020, whereas it earned N3.305 billion in 2019 operating year, indicating about 30 per cent drop in the year under review.

The group also earned N478. 09 million as profit from operations in 2020 as against N1.467 billion in 2019.

The group's profit before tax also dropped from N1.340 billion in 2019 to N361.27 million in the year under review.

However, profit for the year 2020 was N302.13 million, unlike the N717.19 million in the 2019-operating year, indicating a 57.9 per cent reduction, as the company attributed the drop in revenue of the group to the Covid-19 pandemic.

He stated that the company closely monitored the global effects of the Covid-19 pandemic and its impact on the aviation industry, stressing that before the pandemic hit in 2020, aviation contributed an estimated $1.7 billion (about N646 billion) to Nigeria's Gross Domestic Product (GDP) and supported 241,000 jobs.

Fadeni decried that the ground handlers in Nigeria lost about N7 billion to the pandemic in 2020, which resulted in the below performance of handling companies in the country.

"We lost half of the year to the pandemic, as during the initial lockdown, the airspace was shut and limited to emergency cargo and evacuation flights.

"Still in 2020, the Nigerian economy shrunk by 3 per cent while inflation rose from 11.4 per cent in 2019 to 12.4 per cent, leading the country into a recession. Also, the uncertainties towards the build-up to the United States election in quarter four and the unabating Covid-19 pandemic propelled drops in the world economy with far-reaching implications on Nigeria's oil exports," he said.

Also, the Group Managing Director, Mrs. Olatokunbo Fagbemi, said within the year under review, the operating cost of NAHCO decreased by 23 per cent, while administrative expenses decreased by 6 per cent.

Fagbemi noted that within the past year, the management took some unpopular, but inevitable decisions because of the pandemic.

She explained that some categories of staff took between 10 to 50 per cent pay cut for some months, while promotion and recruitment were frozen, stressing that the reduction in the administrative costs helped in reducing the liability that would have been incurred.

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