ABC Transport Plc has achieved a significant financial recovery in 2024, reporting a pre-tax profit of N918.4 million. This marks a substantial rebound from the N368.6 million loss recorded in 2023, driven by a surge in revenue across all its business segments and strategic internal adjustments.
The company's gross profit saw a robust increase of 72.5%, climbing to N2.87 billion from N1.6 billion in the prior year. This impressive growth was fueled by a 70.7% surge in total revenue, which reached N12.5 billion. This substantial revenue growth was sufficient to offset a 70.2% rise in operational costs, ultimately bolstering the gross profit and setting the stage for overall profitability.
Segmental Performance: A Deep Dive into Revenue Drivers
A closer examination of ABC Transport's diverse business segments reveals the key drivers behind its strong financial performance.
The cargo division emerged as the leading contributor to both revenue and profit. It generated N4.09 billion in revenue, a considerable increase from N2.4 billion in the previous year. Even with expenses reaching N3.9 billion, the segment successfully delivered a pre-tax profit of N349.9 million.
The haulage division followed, with its revenue doubling to N2.94 billion from N1.2 billion in the preceding year. Despite expenses of N2.71 billion, it managed to secure a pre-tax profit of N234.5 million.
However, not all segments performed at the same level. The Shuttle and City Transit Intercity (CTI) services recorded much smaller revenues, at N356.3 million and N355.1 million, respectively. While CTI managed to post a modest profit of N68.2 million, the Shuttle service faced challenges with an operating expense of N518.1 million, resulting in a loss of N87.6 million.
From a broader perspective of revenue sources, load and waybill activities were the top generators, bringing in N4.1 billion. Haulage operations were next, experiencing a remarkable 142.9% year-on-year revenue growth to N2.9 billion. Transport earnings contributed N2.6 billion, while vehicle and spare parts sales added N2.4 billion. Hospitality services also made a contribution of N355.1 million.
Strategic Adjustments in Other Operating Income
Beyond core business operations, a critical internal adjustment in ABC Transport's "other operating income" played a pivotal role in solidifying its bottom-line profitability. In 2024, the company recorded a significant income of N462.5 million from this category, a dramatic reversal from a N57.16 million loss in the previous year.
A major contributor to this rebound was franchise income, which contributed the largest portion at N261.2 million, representing a robust growth of 201.3%. Insurance indemnity also saw a sharp increase, rising to N91.4 million from just N7.4 million in 2023. Income from training activities made a meaningful contribution, totaling N68.7 million. Other diverse income streams included rent at N17.2 million, sales of scrap at N15.1 million, and exchange gains of N4.4 million. These combined income streams provided crucial support, helping to absorb the impact of rising administrative expenses.
Navigating Rising Costs: Strong Operating Profit Amidst Expenses
Despite the impressive revenue growth, ABC Transport continued to grapple with escalating administrative expenses in 2024, which reached N2.2 billion. This represents a 26.4% increase from the N1.7 billion reported in 2023.
A detailed breakdown of these expenses reveals that exchange losses constituted the largest portion at 26%, amounting to N586.2 million. Personnel expenses followed at N351.6 million, with transport expenses close behind at N177.1 million. General expenses and electricity costs also contributed significantly, coming in at N134.7 million and N103.4 million, respectively.
Crucially, the substantial "other operating income" of N462.5 million played a vital role in mitigating the impact of these growing costs. As a result, ABC Transport achieved a healthy operating profit of N1.3 billion, a significant improvement over the N40.2 million reported in 2023. Even with finance costs rising by 13.98% to N465.9 million, the company's strong operating performance ensured a pre-tax profit of N918.4 million, signaling a robust and successful turnaround.
This remarkable financial recovery by ABC Transport Plc highlights the effectiveness of its revenue growth strategies across diverse segments and the positive impact of strategic adjustments to other income streams.