Firm suspends production over growing losses

The board of directors of Greif Nigeria Plc has suspended its operations as the packaging company continues to wriggle in losses.At the board meeting at the Apapa, Lagos office of the company, directors of Greif Nigeria resolved that the company should stop receiving new orders from customers and also stop production for an indefinite period.The board stated that it took the decision because the company recorded a loss of more than N260 million in 2018 and the loss had also continued in the first quarter of the 2019 business year.According to the board, efforts made to win back key customers and also get price increase from the customers were yet to yield positive result.It had, therefore, been resolved that the company stop receiving new orders from customers and also stop production for an indefinite period, the company stated in a regulatory filing signed by its Managing Director, Mr David Onabajo.Greif Nigeria had suffered a major contraction in its business in 2018 as the packaging company struggled with significant decline in sales.Key extracts of the audited report and accounts of Greif Nigeria for the year ended October 31, 2018 showed that sales dropped by 62 per cent from N1.405 billion in 2017 to N534.611 million in 2018. As against modest profit of N77.55 million in 2017, the company posted pre-tax loss of N245.23 million in 2018. After taxes, net loss rose to N262.59 million in 2018 as against net profit of N49.42 million recorded in 2017. Earnings per share consequently declined from N1.16 in 2017 to a loss per share of N6.16 in 2018.Greif Nigeria had forewarned investors that the immediate past business year was a very challenging year for the company.The company had stated that economic and competitive environment in the steel drum and packaging sector gave rise to a very tough situation for its business, which resulted in the closure of two of its branches during the 2018 financial year.Greif Nigeria could not meet the timeline for the filing of its 2018 audited financial statements for the year ended October 31, 2018 on the due date of January 29, 2019 because it had to carefully scrutinise the operations during the year.The company stated that the delay of its financial statements was due to the fact that the external auditors had to exercise due diligence on the financial statements during the audit exercise to ensure all tax related issues were resolved, and make certain that the results reflect the actual position of business operations for the year, as well as conform with all relevant statutory requirements.
Click here to read full news..