ABC Transport returns to profitability, amid challenges
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ABC Transport Plc, one of the foremost land transport companies in the country, has returned to profitability after recording profit before tax of N105.31 million in 2017, as against a loss before tax of N258.11 million in 2016.
In like manner, its profit after tax was N15.78 million in 2017, against a loss after tax of N359.64 million in 2016.
This is despite the microeconomic and socio-political variables that affected its operations, which reflected on the firm’s operational efficiency and the result for the year ended December 31, 2017.
Olumide Obayomi, chairman, ABC Transport Plc, announced the result at its 2018 (25th) Annual General Meeting (AGM) held at Mayfair Suites and Conference Centre, Egbu Road, Owerri, Imo State.
He explained that the firm’s turnover grew by a mere 1.6 percent from N5.63 billion in 2016 to N5.72 billion in 2017, stating that the firm has succeeded in turning around the loss of the previous year.
He hinted that the firm’s return to profit was helped by the investment in income of N163.35 million received from its subsidiary Transit Supports Services Limited.
Obayomi, however decried the operating environment, which according to him, remained challenging with a myriad of economic, social and political problems, beleaguering its business activities.
He also observed that the manacles of the economic recession, which beset the nation in 2016, are still very much with the country, stressing that the key sectors, such as manufacturing, trade and services, from which the transport sector mainly derives her demand are yet to fully recover from the recession.
“Also the lack of local oil refining capacity has led to volatilities in the local price of automotive gas oil (AGO).
“The rise in the cost of this key input alongside the rise in the cost of imported spares and consumables, occasioned, by the devaluation of the naira, has placed our operating experience at considerably high levels.
“Our road infrastructure has remained in a parlous state, leading to persistent impairment to our buses and trucks, extended journey times and increasing levels of avoidable road mishaps.
“The cankerworm of multiple taxation by agents of the 3 tiers of government, still persisted in the year under review, as the country’s transport industry remains largely fragmented and unstructured with no clear defining rules,” he stated.
He further observed that unscrupulous operators were encouraged to cut corners to the disadvantage of good corporate citizens, noting that successive governments have failed to see the imperative of intervening in an industry, as critical as road transport and logistics, which has the potential of catalyzing economic productivity to unimaginable heights.
The Chairman of the Board of ABC Transport plc, also noted that imbalance in the value sharing and extraction in the transport sector is punitive and crippling.
According to him, “A situation where we pay more taxes to government as corporate taxes than what the shareholders receive over the same period can only serve as disincentive to new investments and hamper growth in the critical land transport sector in which we operate”.
He revealed that the company has paid a total of N1.52 billion in corporate taxes (including education and other similar taxes) for a period up to December 31, 2017, whereas only N783 million was paid to shareholders over the same period.
He recommended the rebalancing of the value sharing and extraction equation between the government and shareholders, as key capital providers, otherwise sector operators would continue to suffer inadequate investment, lower level of contributions and GDP relevance with attendant negative impact on the economy.
To reward its shareholders for their abiding faith and patience and in keeping with the promise the company made at the last annual general meeting, the board of directors of the company recommended the sum of N49.73 million as dividend, at 3 kobo per share, for distribution to shareholders.
GODFREY OFURUM, Owerri