DAAR Communications Plc at the weekend disclosed that it generated N4.637 billion as revenue in its 2018 financial year, The Sun reports.
The figure shows a growth of N925 million (25%) when compared to N3.712 billion it netted in 2017.
Speaking at the company’s 10th annual general meeting in Abuja, the Chairman of the Group, Mr Raymond Dokpesi Jnr. informed shareholders that the increase in revenue of 25 per cent did not result in profitability yet as the company still suffered a profit after-tax loss of N2.169 billion, which is an increase from 2017 loss position of N482 million.
He blamed the loss on the company’s adoption of the International Financial Reporting Standard [IFRS] Accounting policy which is totally different from the previous accounting model in use by most companies in Nigeria.
He explained: “In the midst of operating challenges, your company recorded gross earnings of N3.712 billion in 2017 as against the 2016 earnings of N3.733 billion, representing a marginal decline of 0.56 per cent revenue.
“Conversely, the earnings of 2018 increased to N4.637 billion, representing a 25 per cent increase over 2017 earnings.’’
“However, the loss after taxation in 2018 was N2.169 billion while 2017 loss after taxation was N0.482 billion, representing an increase of 350 per cent.
“The astronomical increase in operating losses in 2018 was mainly as a result of of the adoption of of the IFRS – 15 on Revenue Recognition on contracts from customers.’’
Dokpesi Jnr, while further enlightening the shareholders noted that the board reviewed all its revenue contracts and consequently made appropriate provisions for all delinquent accounts in order to conform to the rules of the IFRS -15.
He further revealed that N1.3 billion was provided for in the 2018 financials for possible doubtful debts for which they represent.
He assured them that every necessary action including legal options would be explored to recover all outstanding debt.
He also attributed the loss to very high operational cost, especially in the area of independent power provision; as the company is highly dependent on diesel for its generators.
He also said the company spends heavily on getting foreign exchange for broadcast equipment which are procured overseas using foreign exchange sourced from the parallel market at exorbitant rates.
In spite of the challenges, Dokpesi jnr assured the shareholders that the board remained undeterred but optimistic that in the near future, shareholders will smile, especially as major restructuring was on-going to return the Group to profitability.
“As part of the repositioning programme of the Company, we have acquired the latest modern studios and other broadcast infrastructure that the industry can boast of. We are also integrating our operations with the most robust software in order to fully automate our operations to cope with modern broadcasting anywhere in the globe. The company has also signed on various content production agreements with reputable producers for the production of high-end content necessary to increase its audiences and market potential. “These investments will no doubt position the company for cost effective management, increased viewership/listenership and adequate rating for increased revenue generation,’’ he added.
However, shareholders were divided on the outcome of the financial statements. While some expressed mixed feelings, others like Alhaji Muktar Muhtar applauded the initiatives of the board and urged others to give the management more time to plant the company on growth path.