A.G Leventis optimistic about future amid challenges

A.G. Leventis (Nig) Plc, one of the leading conglomerates  in Nigeria, has expressed optimism towards its future business operations despite recent challenges.

The 81-year-old company disclosed this at its 59th annual general meeting, saying that  recent recession that hit Nigeria impacted its revenue.

Ahmed Mantey, group chairman of A.G Leventis, said, “The effect of recession in our economy continued to impact adversely on our operations as there was a reduction in credit opportunities which in turn affected our income. This harsh environment along with the continued lag in infrastructure especially power and road network added to our cost of doing business. Nevertheless, we strove to ensure that we continued to develop our business as much as possible.”

The group and company recorded a loss after tax of N3.5 billion and N2.6 billion respectively for the year ended 31 December 2017 compared with the figures of N2.6 billion and 3.8 billion respectively reported the previous year.

“We remain optimistic for the future of our business. Our product lines remain a huge value driver for us, enhanced by our renewed focus on capacity building, operational efficiency, financial discipline and aggressive trade and marketing across our active categories. This will hopefully position our group now more than ever to access and achieve sustainable growth in the future,” Mantey explained.

Sunday  Asade,  group  chief operating officer, said the company is working on remodelling its  business and that should help it become more  competitive and  improve in identifying its challenges

“Apart from modelling, we have strategic part which we are drawing to be able to cope with challenges. We are looking at some adjacent categories to our current business which will help us to be able to carry out backward integration,” Asade told BusinessDay.

The firm’s total assets exceeded its liabilities for the group and company by N2.8 billion and 4.6 billion respectively as against N6.3 billion and N7.3 billion respectively reported in the same period of the previous year.

The Leventis Motors division recorded a 7 percent decline in revenue from N8.3 billion in 2016 to N7.7 billion in 2017. The firm linked this performance to Nigeria’s economic recession which affected sales of trucks.

Another subsidiary Chrisstahl Nigeria Limited’s revenue dropped by 59 percent, from N281.91 million in 2016 to N116.23 million in the year under review.

 This was the same for Druckfarben Nigeria Limited, a subsidiary of A.G Leventis group, as its revenue was down 22 percent from N1.02 billion in 2016 to N801.1 million in 2017. Although there was 203 percent increase in the gross profit.

Leventis Foods Limited also experienced challenges in 2017 as there was 17 percent reduction in revenue from N2.80 billion in 2016 to N2.31 billion in 2017.

 “I will like to reassure our esteemed shareholders and stakeholders that our group’s prospects are promising and bright. Having been able to achieve a stable investment climate in the country, we shall leverage on that and strive to attract investment in our Fast Moving Consumer Goods (FMCG), automotive, real estate and logistics businesses and in line with our strategic business thrust, focusing on delivering excellent customer service and efficiency,” Mantey said.

Meanwhile, in the real estate arm of the company, there was 5 percent increase in the division’s revenue when compared with the same period in 2016. This, the company said, was largely as a result of higher occupancy rate achieved in prime locations and remarkable level of occupancy in outstations.

The stocks of A.G Leventis as at the close of market Friday, 14 September 2018, traded N0. 40 and has a market capitalisation of N1.1 trillion as compiled from Bloomberg terminals.

Mantey  said, “We will continue to focus on innovation and develop new products for the market in order to increase our market share and explore growth opportunities with new commercial vehicles and construction equipment’s manufacturers and other forms of business combinations in order to broaden our earning base, create synergies and build a profitable and sustainable future.”

 Endurance Okafor