Japaul Gold: What Should Shareholders Expect in 2021?

Japaul Gold: What Should Shareholders Expect in 2021?

Japaul Gold and Ventures Plc: Investors currently value the company at N2.88 billion on the Nigerian Exchange over 6.26 billion shares outstanding, as market price trends below the nominal value of 50 kobo.

The company’s equity position printed at N2.556 billion due to huge sustained losses which recently widened by weak performance driven by its offshore and quarry activities. Earnings per share slide to negative and analysts think it is unlikely to see dividend payment in 2021.

Japaul Gold and Venture Plc, a company with a free float percentage of 84.28% as of 30 June 2021 hit a loss after tax of more than N257 million when turnover was about N314 million in the first half of the year.

This sky-high loss position was driven by over N408 million expended as administrative cost in the period which happened to be a reduced amount expended at the time when compared with more than N459 million used up in the first half of 2020.

In the last 12-month to be precise, Japaul reduced administrative costs by more than 11% amidst a steep inflation rate in the country. Unsurprisingly, the company’s profit meltdown as costs outpaced income.

Japaul Gold and Venture’ operating profit was about N39 billion in the first half of 2020, driven primarily by other income sources different from core operations.

But in the first half of 2021, other income lines in the company’s financial statement declined to N59.799 million from N344.366 million reported in the comparable period in 2020.

Within 12-months space, Japaul Gold and Venture profit slide to negative, from N38.293 million in the first half of 2020 to N257.54 million.

Japaul spent heavily on administrative costs but earn quite low in relation to the size of its overall expenses. In the first half of 2020, the company delivered a turnover of N327 million.

Both the company’s costs of sales and administrative expense was more than N632 million. A similar scenario played out in the first half of 2021. The company sales dropped to N313.622 million. However, both direct and administrative costs of sales trend around N630 million.

Japaul’s turnover declined as key business activities slowdown. Specifically, its quarry and offshore witnessed a strong decline from the comparative period last year. Revenue from quarry activities dropped to N43.93 million from N71.379 million in the first half of 2020. Similarly, its offshore activities related revenue bumps to N114.328 million from N212.39 peaked in the comparable period in 2020.

However, revenue from dredging received a strong boost, from N43.238 million to N155.363 million; but not sufficient enough to wipe off negative impacts imprints from other two revenue-making segments – Quarry and Offshore.

Meanwhile, the company’s assets are fast depreciating with net book value standing at N6.67 billion from the total asset cost of N14.429 billion.

Trade and other receivables decline, which analysts consider a good thing as the company unlocked its previously tied down cash. Its impairment allowance on receivables has been relatively stable.

The shareholders of this company would rather stay long to benefit from its operating activities as it is more unlikely for Japaul Gold to pay an annual dividend in the financial year 2021.

In the first half of the year, Japaul Gold has N2.556 billion in total equity, a reduction from N2.825 billion a year ago as sustained losses widened to N16.343 billion from N16.085 billion last year.

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Did Japaul Gold has Cash?

The company’s cash and cash equivalent printed at N176 million at the end of the first half of 2021. This was on the back of N302.30 million generated from core operations supported by the ability to convert debtors’ books to cash.

Japaul Gold: What Should Shareholders Expect in 2021?