Julius Berger Plc has exceeded its full year 2020 profit by 379.93 percent in just 9 months of 2021, as the company benefited from the reopening of the economy that significantly spurred construction activities.
The largest construction firm by market capitalisation in Africa’s most populous nation posted net income of N5.93 billion as at September 2021, which leapfrogged 2020 full year profit of N1.23 billion.
It had recorded a loss of N1.98 billion in the corresponding period of September 2020, when construction sites were shuttered due to lockdowns imposed by the government to curb the spread of the coronavirus pandemic.
Revenue was up 50.76 percent to N253.91 billion as at September 2021, and it also exceeds the 2020 full-year figure of N241.77 billion.
Strong earnings growth means the company has the financial strength to pay dividends to shareholders and retain some to finance future expansion plans.
The construction giant is making profit from core operations as operating income surged by 265.75 percent to N15.16 billion as at September 2021 from N4.10 billion the previous year.
Operating profit margin increased to 2.43 percent in the period under review from 5.97 percent the previous year.
Analysts say Federal Government proposed capital expenditure spending as stated in the budget will add impetus to construction activities, hence strengthening Julius Berger’s earnings.
The Nigerian government is planning to spend a total of N5.35 trillion on capital projects in the N16.39 trillion 2022 Budget Appropriation bill.
Julius Berger ramped up on capital expenditure spending to meet up with the pace in business activities as a rebound in crude oil price and successful roll out of vaccines underpinned gradual economic recovery.
It spent N18.18 billion on the acquisition of property plant and equipment (PPE) in the nine months to September 2020, which is 132.05 percent higher than 2020’s N8.05 billion.