ABC Transport released its 2024 second quarter results, showing a profit of N57.3 million.
This represents a 32.20% year-over-year decline from N84.6 million reported in the same period in 2023.
Although revenue rose by 71.05% year-over-year from N1.4 billion recorded in 2023, the increase in direct costs by 73.44% stifled profits.
The released financial statement for Q2 of 2024 also reported a 69.36% year-over-year decline in net income due to a rise in direct costs.
Increased year-over-year direct costs accrued by the company in Q2 of 2024 are largely due to the hike in the price of petroleum products.
Key highlights:
Revenue: N2.4 billion, 71.05% YoY
Direct cost: N1.9 billion, 73.44% YoY
Gross profit: N481.6 million, 61.90% YoY
Administrative expenses N355.2 million, 30.36% YoY
Finance cost: N224 million, 27.32% YoY
Pre-tax profit: N57.36 million, -32.20% YoY
Net Income: N15.5 million, -69.36% YoY
Earnings per share: N0.006, -69.34% YoY
Commentary:
According to the Q2 financial statement released for the period ending June 30, 2024, the company generated high revenue from transport services offered to the public.
However, a concurrent spike in direct costs accrued by the company in Q2 of 2024, which was largely induced by the hike in the price of petroleum products, has dampened profits emanating from revenue.
According to the National Bureau of Statistics, the average cost of purchasing petrol stood at N769.62 per litre in May 2024, depicting a 223.21% YoY price hike when compared to N238.11 recorded in 2023.
Although gross profit increased by 61.90% year-over-year at N481.6 million, the pressure exerted by administrative expenses at N355.2 million impacted negatively on net income.
ABC’s net income declined by 69.36% YoY, from N50.6 million recorded the previous year to N15.5 million in Q2 of 2024.
The earnings per share also fell by 69.34% YoY, slashing the profit generated by the company per outstanding share of common stock.
ABC Transport is currently trading at N0.80 per share in the Nigerian stock markets.