Shareholders of the Cement Company of Northern Nigeria Plc on Thursday approved the payment of a total dividend of N439.8m for the 2014 financial year.
The amount, which was approved at the company’s 36th Annual General Meeting in Abuja, translates into a dividend payout of 35 kobo per share.
When compared with the 70 kobo dividend paid in the 2013 financial period, the amount translates into a 50 per cent decline.
At the event, the Chairman of the company, Mr. Abdulsamad Rabiu, described the operating environment as challenging owing to the problem of poor power supply.
For instance, he said the electricity supply from the national grid was insufficient, adding that the situation was hampering the production process of the company.
He said the development led to a high expenditure on energy. The cost of energy, he said, stood at N6.08bn as of the end of last year.
Rabiu explained that despite the challenges, the board had continued to strive for better financial results for shareholders of the company.
For instance, he noted that during the year under review, the company recorded a turnover of N15.1bn compared to N15.3bn recorded in 2013, adding that profit after tax grew from N1.56bn in 2013 to N1.91bn in 2014.
He said the increased profitability was achieved as a result of strict cost control measures put in place by the management of the company.
He said, “The company is using Biomass as supplementary kiln fuel. The use of this energy source is now at the practical capacity limit and it contributes considerably to a better control of the energy costs.
“The project for increasing the production and converting the existing production line to solid fuels like coal is ongoing and is expected to reach completion by early 2017.
“Although there was a good and improved performance, the board has resolved to recommend the payment of a gross dividend of 35 kobo per share compared to last year’s 70 kobo per share because of the cash flow situation.”
Rabiu said the prospect of the cement industry was bright despite the challenges in the operating environment and the deficit in infrastructure in Nigeria.
“Our resolve to expand the capacity and operations of the company is aimed at ensuring that our company remains a key player in the cement market,” he added.
Some of the shareholders who spoke at the event commended the management for the financial performance. Others, however, called for improved dividend payment in the next financial period.
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Source : Punch