This dip in profitability occurred despite a robust 62.80% year-on-year increase in revenue, which climbed to N180.5 billion in Q1 2025 from the previous year's figure. The primary factors offsetting this revenue growth were a substantial cost of sales, amounting to N153.1 billion, and significant foreign exchange losses.
A breakdown of the revenue streams indicates that civil works remained the dominant contributor, generating N125.1 billion during the quarter. Building works followed as the next largest segment, accounting for N30.2 billion in revenue.
Despite the surge in the cost of sales, Julius Berger managed to achieve a commendable gross profit of N27.4 billion, marking a 30.69% increase from the N20.9 billion reported in the first quarter of 2024. This suggests improved efficiency in direct project costs, although it was ultimately overshadowed by other financial headwinds.
On the less favorable side, the company experienced a notable surge in administrative expenses, which escalated to N22.6 billion, representing a 46.42% increase compared to the previous year. Additionally, 'other gains' witnessed a dramatic decline, plummeting from N9.6 billion in Q1 2024 to a mere N75.2 million in the current reporting period.
A key driver behind the profit decline was a significant net foreign exchange loss of N1.8 billion. This stands in stark contrast to the substantial N9.4 billion gain recorded from foreign exchange transactions in the first quarter of 2024, highlighting the impact of currency fluctuations on the company's financial performance. Consequently, operating profits took a substantial hit, falling from N13.2 billion in Q1 2024 to N3.1 billion in Q1 2025, a sharp 76.53% decrease.
Furthermore, investment income also experienced a downturn, decreasing by 17.52% from N4.5 billion in Q1 2024 to N3.7 billion in the current quarter.
Despite the challenges impacting profitability, Julius Berger's balance sheet demonstrated resilience. The company's total assets saw a solid 37.31% increase, reaching N1.05 trillion. Moreover, retained earnings also showed positive growth, increasing by 6.21% to reach N62.6 billion.
Key Financial Highlights for Q1 2025:
- Revenue: N180.5 billion (+62.80% YoY)
- Cost of Sales: N153.1 billion (+70.29% YoY)
- Gross Profit: N27.4 billion (+30.69% YoY)
- Administrative Expenses: N22.6 billion (+46.42% YoY)
- Other Gains: N75.2 million (-99.22% YoY)
- Operating Profit: N3.1 billion (-76.53% YoY)
- Pre-tax Profit: N5.9 billion (-64.68% YoY)
- Retained Earnings: N62.6 billion (+6.21% YoY)
As of the trading day ended April 30th, 2025, Julius Berger's stock price stood at N137.00, reflecting a year-to-date (YtD) loss of 11.76%, potentially influenced by the reported earnings. The financial results paint a picture of strong revenue generation offset by significant increases in the cost of sales and adverse foreign exchange movements, ultimately impacting the company's profitability in the first quarter of 2025.