Chemical and Allied Products Grows Profit After Tax by 9% to ₦509M in Q2

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Chemical and Allied Products Plc (CAP), one of Nigeria’s leading paints and decorative companies, announced its unaudited results for the period ended 30th June 2021.

Highlights

  • Chemical and Allied Products Plc (CAP)’s revenue of N5.6 billion, higher than prior 2020 by 62% supported by strong volume growth across all segments.
  • Gross profit of N1.7billion million, with a gross margin of 31%.
  • Operating Profit (EBIT) of N588 million, with EBIT margin of 10%. Revenue growth and higher other income (+ 399% YoY), due to profit from the sale of a non-core asset, offset higher operating expenses (+ 46% YoY).
  • Profit Before Tax of N697 million, with a PBT margin of 12%.
  • Profit After Tax of N509 million, with PAT margin of 9%.
  • Inventory of N2.3 billion, up 139% compared to N967 million in Dec 2020 driven by deliberate efforts to build stock levels to ensure we are able to meet demand.
  • Trade and other receivables of N668million, increase 45% compared to N461 million at Dec 2020 following increased sales.

Chemical and Allied Products posts 24% drop in profit after tax

Commenting on the performance, Managing Director, Chemical and Allied Products Plc (CAP), David Wright stated:

“In the first half of 2021, we grew top line by 62% year on year. However, the impact of the COVID19 pandemic on our business, which resulted in a global shortage of raw materials and a significant increase in input costs, continues to affect profitability margins.

Our focus remains to create shareholder value thus strategic actions taken to secure alternative raw material sources, cost management efforts, as well as improvements in operational efficiency, are expected to improve profitability in the second half of the year.

The merger between CAP and Portland Paints and Products Nigeria Plc (Portland Paints) became effective on the 1st of July 2021 with CAP being the surviving entity. We expect that the merger will help CAP achieve operational, governance and administrative efficiencies and access to new markets which will increase shareholder value in the short and long term”.

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