The board and management of Nigerian Aviation Handling Company (NAHCO) Plc at the weekend assured shareholders that ongoing implementation of a strategic five-year growth plan will lead to a more agile and profitable company.
At the Annual General Meeting (AGM) in Kano, directors of NAHCO laid out strategic growth objectives, key implementation drives, challenges and transformational initiatives being taken to sustain the company as the leading ground handling company with sustainable returns to shareholders.
The assurance came as shareholders approved the distribution of N406 million as cash dividend for the 2018 business year, representing a dividend per share of 25 kobo.
Nigerian Aviation Handling Company (NAHCO) Plc Chairman, Dr Seinde Fadeni, said the new board and management have reset the company’s group structure and operations and have started implementing key initiatives to address cost structure, realign products and interface with customers and other stakeholders with a view to ensuring optimal performance in the years ahead.
He said the company has started modernisation of its warehouses in order to position itself for global changes in cargo handling and management noting that NAHCO is currently investing in warehouse refurbishment, facility and equipment upgrade to ensure leadership in all areas of air cargo within the West and Central African region.
He pointed out that while increased costs of operations and administrative expenses impacted the company’s performance in 2018, the new management has been addressing these cost centres to ensure improved efficiency and competitive returns.
“It is my belief that our company will grow more rapidly in the coming years in light of the measures and innovations being implemented,” Fadeni said.
He explained that the company’s strategy for growth entails maximising parent company and subsidiary companies’ opportunities and capacity utilisation while taking advantage of market trends and the group’s dominant market position.
“We are restructuring our strategic business units (SBU) and subsidiary companies in such a way that from now on, every member of the NAHCO Group contributes more to the overall profitability of the group. We have set a revenue target that is ambitious but achievable. We expect to grow our revenues by a factor of four times 2018 figure and achieve this over the next five years. We have resolved to maximise the revenue opportunities inherent in the synergies of our group,” Fadeni said.
He pointed out that the company is developing sustainable business plans for two of its subsidiaries-NAHCO Free Zone (NFZ) and Mainland Cargo Options (MCO) while exploring best strategy to ensure long –term viability of NAHCO Energy Power and Infrastructure (EPI).
“The company’s outlook for 2019 is positive, with the unwavering commitment of the board, management and staff, we are fully committed to perform better and deliver more value to you, our esteemed shareholders. We will continue to implement the strategic direction we have set for the transformation of NAHCO,” Fadeni said.
Fadeni noted that one of the critical elements of the company’s growth strategy is the asset renewal strategy and policy for all its plant machinery and equipment including ground support equipment (GSE) and cargo management equipment, which will help to improve service delivery and efficiency while reducing maintenance costs.
He said the company has commenced purchase of necessary machinery and equipment from international OEMS and reputable vendors with some of the equipment already received and commissioned into service.
According to him, the company has also commenced the upgrade of its infrastructure, facilities and equipment starting from the Lagos Warehouse Complex. Early 2019, it added a cold room facility to its Kano warehouse. It has also committed material investment and upgrades to its strategic business units in Abuja and Lagos.
“We have started on a good note in 2019, as we move into our 40th year of commercial operations with the acquisition of new and modern equipment and a new business strategy for growth. We are on a clear path of positive transformation. This is our new NAHCO, more profitable, more agile; the new board is committed to this transformation which will reposition the company for growth, carry out the necessary people transformation and culture change, achieve operational excellence and increased profitability,” Fadeni said.
Nigerian Aviation Handling Company (NAHCO) Plc Group Managing Director, Mrs Olatokunbo Fagbemi, said the new management has continued to make steady progress in driving the company’s new vision “to be the leading service provider, continuously innovating and reshaping our chosen markets”. Fagbemi assumed office in December 2018.
She explained that the “New NAHCO” is being built on core values of safety, integrity, innovation, reliability, respect and empathy noting that the “New NAHCO” is to ensure there is regular communication, transparency in decision making and sincerity in governance.
“We are building a culture of safety, security, innovation, integrity and ownership. Our “New NAHCO” is building a cohesive management team and an efficient workforce. Our “New NAHCO” is harnessing the strengths and opportunities of the group structure to drive growth and profit. Our “New NAHCO” is focused on retaining existing customers and on-boarding new customers. Our “New NAHCO” is focused on strong balance sheet, profit and loss and enhanced free cashflow. Our “New NAHCO” is focused on consistently delivering value to all stakeholders,” Fagbemi said.
She noted that NAHCO has continued to maintain internationally acceptable and recognised standards of its operations as the company earlier this year accomplished the feat of acquiring IATA Safety Audit for Ground Operations (ISAGO) certification in three major airports of Lagos, Abuja and Kano, making NAHCO the only ground handler in Nigeria to achieve this.
She added that the company also has achieved the Third Country EU Regulated Agent (RA3) revalidation of its operations in the major airports of Lagos, Abuja, Port Harcourt and Kano by the European Union.
“NAHCO has come out successful in all the airlines audits we have done this year. We have also received commendation for the new measures we have put in place to ensure stricter security and compliance to international standards at our facilities. In addition, our staff have received commendations from several airlines,” Fagbemi said.
She assured that in the coming months, the company will increasingly become an efficient organisation that is fit and able to deliver services at optimum prices to the delight of its stakeholders.
According to her, NAHCO is working with full understanding of the market place to create a win-win strategy with its suppliers and service providers to ensure that the costing and pricing is optimal and sustainable.
As the International Air Transport Association (IATA) pushes for more modern processes in anticipation of projected double in the size of the air cargo industry over the next two decades, Fagbemi said NAHCO is positioning for the global implementation of the e-Air Waybill (e-AWB) with a view to be able to provide ecargo service to all its customers and partners within the next 24 months.
She assured that the company is proactive and resilient enough to thrive despite domestic and global challenges, urging shareholders to support the company as it implements its growth plan and transformation agenda.
“We have a team that is seasoned and has a clear view of the strategic direction and what the competitive landscape is now vis a vis what it would be in the next few years. We have committed, dedicated and trained people focused on the customer,” Fagbemi assured.
Audited report and accounts of NAHCO for the year ended December 31, 2018 showed that turnover grew by 24 per cent to N9.83 billion. Gross profit margin increased from 29 per cent in 2017 to 32 per cent last year. With 19 per cent increase in operating costs and 27 per cent increase in administrative expenses, profit before tax dipped by 16 per cent to N503.2 million while profit after tax dropped to N196.8 million last year.
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