Livestock Plc. Sees Sky-High Earnings Jump in H1-2021
Livestock Feed Plc. sees a sky-high earnings jump in the first half of the financial year 2021, the company’s financial statement released on the Nigerian Exchange shows.
While the company’s earnings from investment placement slowdown, the figures were well placed, driving a 258.21% increase in the bottom line in the period.
The company which engages in the manufacturing and marketing of animal feeds and concentrates sees profit jumped from ₦94.337 billion in the first half of 2020 to N337.921 billion exactly a year after.
A breakdown of its numbers shows that both revenue and profit after tax increased significantly amidst heightened insecurity and inflation rate.
But inflation worries across the nation helped the company to make an upward adjustment to prices of feeds – this happened in a less competitive business space.
Thus, margin improved significantly as increased production costs were easily transferred to customers who are basically finding it difficult to produce their own animal feeds.
The company grew in revenue by 42.32% to ₦7.00 billion in H1’21, from ₦4.92 billion, driven by a 68.86% increase in sales of animal feeds to the southern part of the country, Atlass Portfolios said in a report.
Read Also: FMN’s Share Price Target Upgraded after Earnings Beat
Meanwhile, sales in the Northern part of the country declined by 32.29% due to an increase in the rate of insecurities in the region.
On the expense side, the company decline in Selling & Distribution Expenses by 33.44% from ₦137.35 million in H1’20 to ₦91.42 million in H1’21.
While, the Administrative Expenses rose by 27.81% to ₦224.92 million from ₦175.98 million in H1’20, which was mainly impacted by high staff benefit and Internet/e-mail charges.
Analysts said as a result of high revenue generation and low distribution cost, the company’s profit-before-tax and profit-after-tax grew by 163.21% and 258.21% to ₦365.16 million and ₦337.92 million respectively in H1’21.
Consequently, the investors’ earnings increased to ₦0.11, representing 258.6% growth, as against ₦0.03 in the corresponding period of 2020.
The company’s return-on-asset and return-on-equity both increased significantly to 5.80% and 14.02% respectively in H1’21, compared to 2.55% and 5.67% in H1’20.
Going forward, Atlass Portfolios analyst expects the company to sustain its impressive performance in H2’21; favoured by an increase in economic activities, increase in the sales cost of animal feeds which the investment firm believes will positively affect the company’s revenue.
“We review our 12-month target price for the stock to ₦2.56, representing 18.5% upside potential compared to the close price of ₦2.16”, Atlass Portfolios said.
Livestock Plc. Sees Sky-High Earnings Jump in H1-2021
