Lagos, Nigeria: For the first three months through December 2015, Tiger Branded Consumer posted a loss after tax of N900.75 million, dragged down by consumer inflation and control on the local currency, the Naira, which is currently trading at Bureau the Change at N306 to the dollar.
The loss is however 69.20 percent lower than the N2.92 billion loss after tax posted the previous year. But the recurring losses have raised questions from shareholders on restructuring that could mean job losses.
The company say the reduction in losses was a result of exchange rate gain of N962.40 million, which represents a 174.69 percent drop from an exchange rate loss of N1.29 billion recorded last year.
Sales in the year were flat at N10.67 billion influenced greatly by the weakening economy and consumer spending power.
Nigeria’s consumer inflation was at 9.6 percent year-on-year in December, above the central bank’s target upper limit, data from the national bureau of statistics show.
Growth in Nigeria has dropped to the slowest pace this decade following plunges in crude oil prices.
The company’s dwindling fortunes resulted in huge impairments on assets and the consequent, sale of its stake by the parent company, Tiger Brands, last year to Dangote industries Ltd.
The deal required that Dangote provide Tiger Branded Consumer with immediate cash injection of N10 billion ($50 million), with Tiger transferring its 65.7 percent stake for a nominal $1 to the Johannesburg-based.
Further analysis of the financial statement of Tiger Branded Consumer showed cost of sales ratio was 88 percent, which means the for every N100 the company generates in sales, it spends N88 naira on production costs. It had a negative working capital of N29.60 billion, which suggests injection of funds.
