Pioneer private broadcasting company in Nigeria- DAAR Communications Plc has grown its revenue from N3.712 billion in 2017 to a new height of N4.637 billion in the 2018 financial year.
However, Chairman of the Group, Chief Raymond Dokpesi Jnr. told shareholders that the increase in revenue of 25 per cent did not result in profitability as the company still suffered a loss of N2.169 billion after its tax obligations to the Nigerian Government, up from the 2017 loss position of N482 million.
Dokpesi Jnr. made the revelation at the weekend in Abuja at the broadcast Company’s 10th and Eleventh Annual General Meeting (AGM).
He blamed the loss on the Company’s adoption of the International Financial Reporting Standard [IFRS] Accounting policy which differs sharply from the previous accounting model in use by most companies in Nigeria before now.
According to the Daar Communications Plc Chairman: “I the midst of operating challenges, your company recorded gross earnings of N3.712 billion in 2017as 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 25 per cent increase over 2017 earnings.’’
He continued: “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. then informed the shareholders that in order to comply with the dictates of the IFRS -15 models the Board resolved to review all her revenue contracts and consequently made appropriate provisions for all delinquent accounts in line with the new accounting standard.
He told them that the sum of N1.3 billion was provided for in the 2018 financials for possible doubtful debt for which they represent. He assured them though that every necessary action including legal option was on the card for the recovery of any of its their debtors.
Another challenge that contributed to the loss, according to the Chairman was the ever escalating cost, particularly as it relates to energy cost which is heavily dependent on diesel and foreign exchange for broadcast equipment which are sourced from overseas which is sourced from the parallel market at a very high cost.
In spite of the foregoing challenges, he assured the shareholders that the Board remained undeterred with much optimism that in a matter of time, following an on-going restructure in the Group, shareholders will surely smile as all indications points to a return to profitability very soon.
“As part of the repositioning programme of the Company, we have acquired the latest modern studios and other 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 potentials. these investments will no doubt position the company for cost effective management, increased viewership / listenership and adequate rating for increased revenue generation,’’ Dokpesi Jnr. also informed them.
At the well – attended AGM, shareholders were divided on the outcome of the financial statements. While some expressed mix-feelings, others like Alhaji Muktar Muhtar applauded the initiatives of the Board and urged others to give the management and Board more time for the maturity of the fruits already sighted .