Julius Berger’s nine-month profit up by 37% as revenue hits N405 billion

Julius Berger witnessed a 36.8 per cent leap in post-tax profit for the nine months to September, according to its latest financial report.

The company also attained the highest revenue level ever for the first three quarters of the year.

Turnover increased by 21.5 per cent to N400 billion, compared to the same period of last year, but much of what was achieved in terms of revenue growth was dampened by cost pressures.

Cost of sales jumped to 85.8 per cent of revenue up from 81.7 per cent, leaving gross profit weaker than a year ago.

Julius Berger’s share price has gained 295 per cent since the beginning of the year, making it the fifth-best-performing stock out of the 152 equities listed on the Nigerian Exchange.

The construction powerhouse has long been famed for civil engineering works, building development and infrastructure maintenance, the cornerstone on which his reputation as the builder of major roads and motorways in Nigeria rests.

The necessity to seek out new opportunities to scale and diversify its income base prompted the company to branch into cashew processing as announced by the board the year after the pandemic struck.

Julius Berger stated when the factory launched two years ago that the semi-automated plant is capable of producing sixty tons per day.

Operating costs, notably administrative costs, expanded moderately during the period under review as inflationary pressures kept the cost of doing business high in Nigeria.

The company earned N12.8 billion from the disposal of undisclosed property, plant and equipment, proceeds of which helped soften the blow of rocketing costs on operating profit.

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Strengthening profit, the company’s investment income increased by 271 per cent to N14.3 billion.

Profit before tax surged 74 per cent to N26.2 billion. After-tax profit rose to N12.3 billion from N9 billion.

The company, which established ties with the Nigerian Government in 1965 towards the construction of the Eko Bridge in Lagos, started operation in the country as the local subsidiary of Germany’s Julius Berger Tiefbau AG and has come of age.

Corporate strategy is now centred on remodelling the organisation into a conglomerate, with agribusiness as a major plank of its diversification game plan.

“We have now strategically diversified Julius Berger from being only an engineering construction entity into agricultural produce processing for which we all know Nigerians have a historical antecedent and understandable nostalgia,” Chairman Mutiu Sunmonu said in 2022.

“As we continue to work on our plans, you will see us transform into a conglomerate,” he added.