Hike in Cost of Sales Plunges UPDC Loss to N1.04bn

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UPDC Plc continued to sink in losses following its hike in cost of sales and credit loss expenses that eroded profits in its unaudited result and accounts for nine months ended September 30, 2021.

The company’s unaudited result and accounts on the Nigerian Exchange Limited (NGX) Tuesday showed a loss before tax of N1.04billion for nine months ended September, 30, 2021 from N3.2 billion loss before tax reported in nine months of 2020.

The institutional property company reported loss of N1.18billion in nine months of 2021 from N3.38billion loss reported in nine months of 2020.

Despite reporting increase in revenue, the company’s significant increase in cost of sales and N342.7million credit loss expenses dragged its performance in the period to losses and it might affect return on investment and appreciation in stock price.

As revenue rose by 34.2per cent to N614.74million in nine months of 2021 from N458.26million reported in nine months unaudited result and accounts, Cost of sales rose significantly by 111.3 per cent to N529.4million in nine months of 2021 from N250.5million reported in nine months of 2020.

The company’s management in October reaffirmed its commitment to putting smiles on the faces of its shareholders by giving them value for their investment.

Chief Financial Officer (CFO) of UPDC, Mrs Folakemi Fadahunsi, had said the firm intends to start paying dividends to shareholders, though after improving the cash flow.

She explained that: “UPDC’s half-year performance reflects the anticipated impact of the company’s internal restructuring on performance.

“We were able to record a significant reduction in its finance cost for the first half of the year and the full effect of our management’s refinancing initiatives is expected to be fully reflected in the full-year result following the success of our bond repayment in April 2021.

“We will try to improve cash flow and ultimately start paying dividends to shareholders.”

From balance sheet position, total assets dropped by 5.1 per cent to N21.15billion as at Spetember30, 2021 from N22.29billion reported in full year ended December 31, 2020 result and accounts.

The stock price of the company depreciated by 2.11 per cent or N0.04 to close at N1.86 from N1.90 it opened for trading yesterday.

SOURCE: THISDAY

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