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Travel Restrictions: SAHCO suffers 92% decline in Q2 profit

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SAHCO NAHCO Q2 result

Skyway Aviation Handling Company Plc (SAHCO), reported revenues of N3.1 billion in the second quarter of 2020 compared with N3.5 billion in the same period in 2019.

This represents an 11.9 per cent decrease relative to the same period last year.

SAHCO Plc, formerly known as Skypower Aviation Handling Company Plc, prior to its privatization, is 100 per cent owned by the Sifax Group, and incorporated as an Aviation Ground Handling Service Provider under the Nigerian Company & Allied Matters Act of 1990.

SAHCO Plc’s  duties involve all the actions that take place from the time an aircraft touches down on the tarmac, to the time it is airborne.

The company also ensures that the right assignment is carried out in an efficient, speedy, and safe manner, deploying the right tools.

A careful analysis of the latest results of the company indicates that revenues dipped as a result of COVID-19 travel restrictions.

Travel restrictions affected SAHCO Plc’s operations, but an increase in revenues from domestic and foreign cargo handling gave the company a lifeline amidst business uncertainties.

SAHCO Plc has 10 revenue-generating segments: foreign handling, domestic handling, cargo handling – export, DCS/PAX handling, cargo handling – domestic, equipment rental, investment property, pilgrimage, haulage/crew bus services, and airport security services.

Revenues from eight of these segments declined in Q2 2020, compared with the same period last year; however, revenues from cargo handling increased

Revenues from cargo handling – income increased by 16.04 per cent to N2.2 billion in the current period, compared with  N1.9 billion in the same period last year.

Revenues from cargo handling – export increased by 8.26 per cent to N146.7 million in the period under review, relative to N135.5 million in the same period last year.

It is expected that performance would improve, following the lifting of foreign travel restrictions on the 5th of September 2020. However, things may not transform sooner, as there are one or two challenges facing the sector.

For example, although travel restrictions have been lifted, the conditions passengers have to meet before travel, may be overwhelming for some people to go through; thus, the number of travelers is not expected to peak yet.

The Earnings Per Share (EPS) of the company declined by 92.11 per cent in Q2 2020, from 12.67 kobo to 1 kobo, compared with the same period last year. The decline in distributable profit by 93.34 per cent to N11.42 million in Q2 2020, relative to N171.50 million in Q2 2019, contributed to this decline

SAHCO Plc’s shares were listed on the floor of the NSE on April 26th, 2019. The shares currently trade at N2.93 per unit.

The highest price for a unit of share in 52 weeks was N4.19 and the lowest N1.42. A total of 20,391 units were sold in the last seven days trades.

Shares outstanding is 1,353,580,000 units and its market capitalisation is N3,965,989,400 billion.

Nigerian Aviation Handling Company Plc (NAHCO), operates in the same sub-sector as SAHCO Plc – transport-related Services. NAHCO Plc’s share price is N2.

The highest price for a unit of share in 52 weeks was N3.01 and the lowest is N1.90. A total of 8,162,828 units was sold in the last seven days trades.

Shares outstanding is 1,624,218,750 units, and its market capitalisation is N3,248,437,500 billion.

With the surge in cargo revenues, SAHCO Plc recently received delivery of new Ground Support Equipment (GSE).

This is expected to improve its ground power operations, in terms of cargo and passenger loading operations, as well as aircraft mobility.

The newly acquired fleet of equipment consisted of 50 Cargo pallet dollies, 45 container dollies, 3 passengers step loaders, and 50 baggage tag machines.

The company also recently introduced a branded Ankara uniform for its frontline operating staff.

The MD of the company, Mr. Basil Agboarumi, noted that the reasoning behind the branded uniform is to showcase the Nigerian culture to the world

 

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