By Peter Egwuatu
The COVID-19 pandemic has affected the performance of Chemical and Allied Products Plc (CAP), in the first quarter of 2021, Q1’21, though its operating expenses, OPEX, improved by 258 bases points, bps or 23.3 per cent from 25.8 per cent in the corresponding period of 2020, Q1’20.
A review of the Company’s unaudited results released to the Nigerian Exchange Group, NXG, for the first quarter ended March 31, 2021 showed that the revenue of N2.1 billion was lower than Q1’20 by 9.5 per cent while the gross profit was N703 million, a decline by 39.9 per cent against N1.167 billion in Q1’20 with gross margin of 33.5 per cent.
Other performance indicators showed that the company recorded Profit Before Tax, PBT of N299 million, down from N672 million in Q1’20, with PBT margin of 14.3 per cent.
Commenting on the performance the Managing Director, David Wright, stated: “In the first quarter of 2021, we saw the biggest impact of the COVID-19 pandemic on our business. Increased global demand for chemicals driven by the economic rebound in Asia and feedstock challenges, with several suppliers declaring Force Majeures, resulted in a global shortage of raw materials. This significantly impacted product availability in the first quarter of the year. In addition, there was a scarcity premium placed on all available raw materials which eroded gross margin across various product lines.
“We have taken steps to secure alternative raw material sources and are increasing inventory levels to mitigate against further disruptions. As such, we expect a strong recovery in the remaining quarters of the year.
Our focus remains on creating shareholder value and we will continue to pursue attractive growth opportunities to achieve this.”