Ellah Lakes just released its 9 months consolidated results for the period ending April 2020, showing that the firm which could be defined as a zombie company, made zero revenues even as expenses surged.
At MoneyCentral, we define zombie companies as corporations whose cash flow is not sufficient to even cover their interest on loans, let alone other expenses.
The agricultural services firm had loans outstanding of N596 million for the period.
Ellah Lakes recorded zero revenues for the 9 months’ period, while administrative expenses came in at N12.23 million and personnel expenses N91.75 million.
This led to an operating loss of N100.5 million at the firm.
Ellah Lakes recently purchased 100 percent holding in Telluria Limited, a company that engages in agricultural production at its 2,400 hectares of land in Edo State.
“Efforts are being made to diversify the operations of the company in the shortest possible time,” the firm said in its financial statement.
Investors in the firm which is listed on the Nigerian Stock Exchange (NSE), will be looking forward to such diversification as the balance sheet looks stretched for now.
Ellah Lakes had payables of N331 million outstanding as at the 9 months’ period, including salary payable of N112 million and other liabilities of N196.2 million, despite reporting zero revenues.
Related party transactions, which MoneyCentral wrote an extensive article on this week, include N305 million liable to CBO Capital Partners Limited.