Listed Date June 25, 2014 02:05 AM Viewed:4945

Nigeria Tourist Company Q1 profits hit by cost

 

Website URL http://businessdayonline.com/2014/06/nigeria-tourist-company-q1-profits-hit-by-cost-pressures/#.U6rIU0DZ7sU
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Viewed: 4945
Listed Date: June 25, 2014 02:05 AM
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Contact Name  BALA AUGIE 
Description  
 

The company was incorporated April 10, 1964, with its share capital wholly-owned by the Federal Government of Nigeria, to acquire the Federal Palace Hotel. In 1992, Ikeja Hotel plc in association with other investors (collectively the “Ikeja Hotel Group”), acquired all the shares of the company from the Federal Government. Between 2009 and 2010, Sun International Limited of South Africa acquired substantial shares in the company, thereby becoming an equal shareholder with the Ikeja Hotel Group. The principal activities of the company are the operation of hotel and casino businesses, and the provision of catering services.

It has shares outstanding of 2.24 billion with shareholders fund of N1.37 billion as of March 31, 2014.

Financial performance for Q1 2014

The company, in the first three months of the year, couldn’t bolster top-line performance as revenues were down slightly by N865.74 million from N870.27 million in the same period of the prior year (Q1 2014). The bottom-line level also showed slow growth as it posted a loss before tax of N123.61 million caused by increasing cost pressures.

The company incurred huge operating cost as operating expense ratio were as high as 102.34 percent in Q1 2014, compared with 94.01 percent in Q1 2013.

This means Nigeria Tourist has spent more than a naira to generate every unit of sales in the first quarter of the year.

Total assets in the review period were down 3.58 percent to N10.69 billion as against N11.088 million as at Q1 2013.

Current ratio, which measures the ability of a company to meet its short-term obligation as at when due, was 0.95x, lower than the industry average of 2.1x.

The country provides copious and enormous opportunities for Nigeria Tourist Company to tap into its economy of $510 billion.

One of the innumerable opportunities are in the areas of tourist attraction such as extended roomy and ocean beaches, ideal for swimming and other water sports, unique wildlife, vast tracts of unspoiled nature ranging from tropical forest, magnificent waterfalls, some new rapidly growing cities and climatic conditions in some parts, particularly conducive for holidaying.

However, many of this attractions are still largely untapped as lack of required modern infrastructural facilities, and in some parts of the country, acute conditions of underdevelopment and poverty are impediments.

Despite the challenges faced by the sector, tourism is a hub of investment that can generate foreign exchange, create employment and also attract foreign investment into the country.

The company’s share price closed at N3.88 on the floor of the Nigerian Stock Exchange, while market capitalisation was N8.71 billion.

Source: http://businessdayonline.com/2014/06/nigeria-tourist-company-q1-profits-hit-by-cost-pressures/#.U6rIU0DZ7sU

 
 
 

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Nigeria Tourist Company Q1 profits hit by cost3out of 5based on 1 ratings.5 user reviews.