Despite Difficult Operating Year, Julius Berger Shows Resilience In Revenue, Positive Result

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For the business year ended December 31, 2020, the leading construction company in Nigeria, Julius Berger Nigeria PLC grew its Total Assets by 4.9% to N329 billion from N317 billion recorded in the previous year. Despite the impacts from the covid-19 pandemic on its business operations, the company recorded a stable turnover of N 242 billion and a Profit before Tax of N3.9 billion. With an operational cash flow of +N6 billion, Company continued implementing strategic investments, amounting to N10 billion within the period.

The figures released by the Security and Exchange Commission, SEC, indicating that the company was able to overcome temporary shutdowns of its construction sites in the second quarter of 2020 by utilizing its strong base of personnel and capital resources.

Given the industry-wide disruptive effects of the global covid-19 pandemic and its attendant operational quarantine and slowdown on businesses and supply chains as well as other interplaying scenarios all through the 2020 operating year, it is commendable that Julius Berger still resiliently sustained its well-rooted technical and administrative resourcefulness as well as its financial stability and well being.

Julius Berger continues to maintain its historical and robust resilience to top the class and retained the driving seat of the engineering construction sector.

Looking at the result from Julius Berger holistically, industry experts and analysts submit that the fact that the company worked in such a focused way to successfully improve on its turnover to maintain its leading edge in the construction sector despite the operational threats occasioned by the global pandemic, is a clear plus for the country’s engineering construction leader.

Comparatively, financial institutions and network providers in the telecommunication sub-sector for example during the lockdown still very much enjoyed huge patronage via electronic operations and from providing remote essential services even at reduced overhead expenses. In the case of the construction sector in general, only the fittest such as the operationally strong and healthy Julius Berger brand sustained investor confidence and continued to thrive. The lockdown period heavily impacted the construction sector’s operations amidst restrictions as only small windows of operations opened.

It is therefore even more noteworthy that the company, according to industry insiders, opted to take seriously its sector leadership responsibilities, and did not sack any staff while the lockdown lasted. The strong commitment to its workforce came in addition to the company’s commitment to communities and Nigeria at large. The figures show the company implemented a dedicated CSR budget and spent N 0.5 billion to alleviate impacts from the covid-19 pandemic on Nigeria and its citizens.

Also, from the figures released, Julius Berger, having clearly beaten the odds against the pandemic and other evaluative indices, is set to compensate its investors with a dividend of 40 kobo per share plus a bonus.

Speaking to the trajectory of the share value of the company, market experts generally opine that, looking at the increasing operational scope or work portfolio of the company, its widely experienced Board as well as its hardworking, determined and forward-looking executive management team, and based on resilient business history, the business outlook or trajectory for Julius Berger reasonably assures all stakeholders of better days ahead for the company. The company’s investors understandably remain upbeat on the performance of Julius Berger on the floor of the Nigerian Stock Exchange.

Instructively, and as a further impetus to planned future growth, Julius Berger gave notice in September last year of its diversification into the agro-processing sector. This means venturing into a sub-sector purely different from its core construction business. However, as is definitive of Julius Berger’s business endeavours, the diversification move proposes to boost the company’s earnings going forward.

According to leading Lagos-based financial and economic consultants, Stockswatch: “the company advised the market that Julius Berger will be looking into diversification opportunities based on the emerging developments, including economic and structural reforms in Nigeria and the resultant paradigm shifts by the Government”.

Meanwhile, as an indication of its continuing encouraging trajectory of performance, Julius Berger has published its First Quarter report for the period ended, 31 March 2021. The company released an impressive result with growth in its top-line and bottom-line figures, compared to figures reported in Q1 2020.

Julius Berger reported a turnover of N71.2 billion, up by 27.34% from N55.9 billion reported in Q1 2020. Profit before tax grew by 228% to N3.4 billion from the profit before tax of N1.1 Billion achieved in the first quarter of 2020.

Earnings per share (EPS) of Julius Berger for the period under review increased to N1.52 from the EPS of 72 kobo, which translates to 111% growth year on year.

Stockwatch, on the figures and facts, analytically opines that: “…we have always talked about investing in a fundamentally sound stock. Julius Berger is undisputedly one of such stocks. If this prevailing situation will by any chance bring its price to any level, investors in the market may do well not to miss the opportunity to position their portfolios for the impending upward swing. For existing investors, the lower the price might possibly come, it can only intelligently represent an opportunity to buy more of a good, productive, performing and investor-friendly stock.”

Julius Berger has been listed on the Nigerian Stock Exchange since 1991 and the engineering construction business is at the heart of the Julius Berger Group’s enterprise.

 

 

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