CWG Plc has declared profit after tax of N128 million in its 2016 operations. Despite microeconomic headwinds suffered by businesses in 2016 in Nigeria and Ghana, where CWG operates, asides Cameroon, the company, in its 2016 annual report, which was made public at its 2017 annual general meeting held in Lagos, weekend, disclosed that it was able to reduce the N1.8 billion loss it incurred in 2015, to make a profit of N127,675,000.00 in 2016.
The company however declared zero dividend for its shareholders as a result of the marginal profit recorded in 2016. But in spite of the zero dividend that was declared by the CWG, its shareholders were satisfied with the company’s performance, citing transparency and commitment to business on the part of CWG Board of Directors.
“We are satisfied with the performance of the Board of Directors for its transparency and commitment to doing focused business, especially for its ability to reduce the company’s loss in 2015 and still made profit in 2016,” the shareholders unanimously said after the presentation of the annual report at the AGM.
Giving details of the challenges faced by CWG throughout its business transactions in 2016, Group Chief Executive Officer, Mr. James Agada, said: “The company started the 2016 business with microeconomic instabilities that started in Nigeria in 2015, as a result of low price in oil, uncertainty in the foreign exchange market and the recession. We also had presidential elections in Ghana, one of our operating countries, and these headwinds severely affected our technology business in 2016.
“But despite the challenges, the company was able to generate a profit of N127,675,000.00, compared to the loss of N1,795,846,000.00 in 2015. As we promised at the end of 2015, we continued in the repositioning of our company to exit from businesses that we were unable to generate and protect profit and margins.
“We hence refocused more on service contracts with better margins. We also walked away from businesses where we could not cover the foreign exchange risks. By streaming our businesses, we were able to reduce our administrative costs from N4.41 billion in 2015 to N2.61 billion, which is a 41 per cent reduction, which allowed us to make a profit, even though our revenue dropped by 47 per cent, compared to last year.
“Our business mix has also tilted in favour of subscription service contracts, which have better margins and predictability, hence raising our gross margins to 24 per cent from the 16 per cent in 2015,” Agada said.
Speaking on the operational environment and the financial performance, Chairman, CWG, Mr. Abiodun Fawunmi, said the financial year was one of the most eventful for the company and the Information Technology (IT) industry, in the face of several economic uncertainties. He however said that despite the odds, CWG recovered from loss position of N1.8 billion in 2015, to achieve N128 million profit after tax in 2016.
Your company therefore exudes an impressive and promising outlook for current and potential investors, considering that some quoted companies recorded a bearish trend, following the economic headwinds in the country last year,” Fawunmi told shareholders present at the AGM.
The Vice Chairman, CWG, Mr. Austin Okere, promised shareholders that the company would continue to diversify its business activities in the current three country locations it is operating (Nigeria, Ghana and Cameroon), in order to declare dividend in subsequent AGM. He said that the current collaboration between CWG and state governments in Nigeria, in the area of internally generated revenue (IGR) for the states, using modern technology, would further boost the revenue stream of CWG.
The highlight of the AGM, was the election of Mrs. Adedoyin Odunfa and Dr. Olusegun Oso, into the Board of Directors of CWG. Prior to the election, Odunfa was appointed as non- executive director on June 20, 2016, while Oso was appointed as non-executive director on October 14, 2016. Also, three representatives from among the shareholders, were elected to serve in the audit committee of the board up till the next AGM.