NCR Nigeria Plc experienced a significant financial downturn in 2024, reporting a substantial loss of N2.2 billion compared to a N738.9 million loss in the previous year. This marked a dramatic escalation in the company’s financial woes, painting a bleak picture of its operational performance. The decline was primarily attributed to a combination of dwindling revenues and escalating operational expenses. This unfortunate confluence of factors eroded the company’s profitability and raised concerns about its future prospects. The financial statement, released on the Nigeria Exchange Limited, detailed a 27% plunge in total revenue, from N2.93 billion in 2023 to N2.15 billion in 2024. Despite a 23% decrease in the cost of sales, from N2.03 billion to N1.56 billion, the revenue decline proved too steep to overcome, resulting in a 35% drop in gross profit, shrinking from N907.1 million to N593.5 million.
The worsening financial performance reflected deeper underlying issues within NCR Nigeria’s operations. Beyond the top-line revenue contraction, the company grappled with escalating operational costs that further compressed its profit margins. This suggests potential inefficiencies within the organization or external pressures such as rising inflation or unfavorable market conditions. The company’s inability to effectively manage its cost structure, coupled with the revenue decline, resulted in the substantial increase in its net loss. The combination of these factors points towards a need for significant restructuring and strategic adjustments to restore the company’s financial health.
The financial strain on NCR Nigeria was further evidenced by a 19% decline in total assets, from N5.46 billion in 2023 to N4.42 billion in 2024. This contraction was primarily driven by a significant 58% drop in cash and cash equivalents, plummeting from N1.24 billion to N522.6 million. This alarming decrease in liquid assets raises concerns about the company’s ability to meet its short-term obligations and finance its ongoing operations. The dwindling cash reserves could further restrict NCR Nigeria’s strategic options and limit its capacity to invest in growth initiatives or weather future economic downturns.
The company’s retained loss, a cumulative measure of its historical losses, soared to N4.75 billion in 2024, a sharp increase from N2.55 billion in the preceding year. This escalating retained loss underscored the persistent operational challenges plaguing the company and the severity of the financial losses incurred during the year. The growing retained loss not only reflects the current financial difficulties but also casts a long shadow over the company’s future, potentially hindering its ability to attract investors or secure financing. Addressing this mounting retained loss will be a critical step towards restoring investor confidence and ensuring the long-term sustainability of the business.
Further exacerbating the financial picture, trade and other payables surged by 25%, rising from N5.18 billion in 2023 to N6.49 billion in 2024. This substantial increase in outstanding obligations suggests potential liquidity challenges and raises the possibility that NCR Nigeria is struggling to meet its financial commitments to suppliers and other creditors. This growing debt burden further constrains the company’s financial flexibility and could lead to strained relationships with key business partners. The inability to manage payables effectively can create a vicious cycle, further impacting the company’s operational efficiency and overall financial health.
The deterioration in NCR Nigeria’s financial performance culminated in a dramatic decline in earnings per share (EPS), plunging from a negative N7.04 in 2023 to a negative N20.35 in 2024. This significant drop in EPS highlights the diminished capacity of the company to generate profits for its shareholders. The negative EPS underscores the severity of the financial losses and signals a concerning trend for investors. This sharp decline in profitability will likely further erode investor confidence and put pressure on the company’s management to implement effective turnaround strategies. The 2024 financial results paint a stark picture of a company grappling with significant operational and financial challenges, necessitating a comprehensive review of its business model and strategic direction to navigate the current difficulties and ensure its long-term viability.
