NASCON Allied Industries Proposes New Dividend as Profit Rises by 151% to N13.73BN

NASCON Allied Industries announced that it gained more market share even as its profit after tax (PAT) rose by 151% to N13.73 billion for the financial year ended December 31, 2023.

NASCON also reported a remarkable 151.0% year-on-year earnings per share, EPS, growth to N5.18 from N2.06 in 2022.

The review of the company's 2023 annual results and accounts revealed that profit after tax (PAT) increased by N8.26 billion compared to the N5.47 billion recorded in 2022.

The firm earned revenue of N80.83 billion, which represents 38%, or N22.04 billion, more than N58.79 billion in the preceding year. The company's profit before tax (PBT) increased by 146%, or N12.22 billion, to N20.59 billion compared to N8.37 billion in 2022.

In a recent statement filed with the regulator, NASCON's board proposed a bonus issue of two (2) new ordinary shares of 50 kobo for every hundred (100) existing ordinary shares as of the close of business on May 06, 2024. This is ahead of the merger plan with Dangote Sugar and Dangote Rice.

The firm states that only shareholders whose names appear in the Register of Members as of the close of business on May 03, 2024, will receive the bonus.

Details from the company's financial scorecard showed that the company's topline grew markedly by 37.5% in 2023. The sale was majorly supported by higher income from the Salt business, which contributed about 94% to the topline revenue, which grew by +41.3%.

Revenue from the Seasoning, however, declined by 1.1%slowed. Sales in the Northern region grew by 44.8% and remained its core market with the highest growth, with the Eastern (+35.3%) and Western (+16.8%) regions also recording growth.

The company's gross margin increased by 13.10 percentage points to 54.8% in 2023, underpinned by the strong revenue growth versus a moderate sales cost increase. On the profitability side, the company's margins grew stronger in 2023 despite a tough business environment. Meanwhile, operating expenses surged by 56.1% following delivery and employee costs increased.

Due to higher leverage activities, Nascon's net finance costs increased by 69.1%, due to a steep increase in interest expenses, which surged by +106.6%. Details showed that NASCON's interest on borrowings printed higher at N5.49 billion.

The company's finance income increased by 135.1% due to higher interest on short-term fixed deposits. At the end of 2023, its profit before tax grew by 145.9% to N20.59 billion in 2023 from N8.37 billion. Following a tax expense of N6.86 billion, profit after tax grew by 151.0% to N13.73 billion from N5.47 billion. 

In the 2023 Annual General Meeting, the shareholders approved a dividend of 100 kobo per ordinary share, which amounts to N2.649 billion, to be paid to them for the year ended December 31, 2022.

The company management proposed two new ordinary shares of 50 kobo for every 100 existing ordinary shares, subject to the appropriate approvals.

The company's Managing Director, Mr. Thabo Mabe, at its last annual general meeting for 2022, said NASCON will not rest on its achievements but will move from street to street, market to market, shop to shop, and shelf by shelf, introducing its array of products to consumers. 

In his remarks on the 2023 company results, Mabe said, in a statement, "I am delighted to present robust results for the full year ended 2023, despite high inflation in a challenging macroeconomic landscape. Our robust value proposition bolstered these positive outcomes, enhanced operational efficiency, and continuous efforts to manage costs."