…As firm’s market capitalisation on NGX touches N15.7bn
Ben Eguzozie
Julius Berger Group, the Nigerian subsidiary of German construction firm, at an investors’ forum, announced to its shareholders and stakeholders that it was transiting into a conglomerate. The construction company, whose presence in Nigeria dates back to 1965 when the firm won a tender to construct a second mainland bridge in Lagos at the cost of N31.2 million, says it is satisfied with its growth trajectory as a leading engineering construction company.
Lars Richter, the managing director,while delivering an update on Julius Berger’s business performance, strategy and operations as of 2023, including the outlook for the business of the company, said: “Our company is transiting to a conglomerate by continually driving growth across our core businesses and our subsidiaries, through which we deliver value-added services along the entire value-chain of the construction industry.”
Richter said “our core business, which is our first pillar, continues to achieve stable growth and upholds our standards as Nigeria’s leading and most innovative construction company. We continue to drive economic growth and expansion in the country through our infrastructure projects, as well as development of industries through our building arm.”
Julius Berger is quoted on the Nigerian Exchange Group (NGX), as Julius Nigeria Plc. It is currently the 40th most valuable stock on the NGX, with a market capitalization of NGN 57.6 billion, which is about 0.157% of the NGE equity market.
The managing director who spoke during an investors’ forum via zoom on transnational expansion of the company’s business operations, saying, “we are expanding our value delivery to other regions of the continent; and we will continue to maintain our performance standards and drive innovation in the construction industry. The projects in our core business significantly contribute to economic growth and expansion, creating more efficient routes that drive trade and commerce and foster industry development.”
According to Richter, Julius Berger has a history of consistent performance and value delivery. He said the company’s measured expansion into a conglomerate has progressed with diversification efforts through the launch of a cashew product, which is export market-driven, coupled with growth in its subsidiaries.
He said he was confident of greater performance, adding that the company’s top and bottom lines grew in the first half of the year (H1 2023), building on a strong 2022 performance with achieved record growth in turnover. He said the firm has sustained shareholder value delivery through the payments of dividends, having sound and robust governance as a key pillar of their business. “We have achieved broad-based progress, notwithstanding the challenging environment, which speaks very highly of our resilience as a company,” he added.
Richter said Julius Berger’s over 50 years operation in Nigeria has consolidated with it a reputation for renowned quality delivery in the country and beyond, creating value for its stakeholders, as the company’s strategy has been resilient, expanding its portfolio over the decades.
He informed that the management was determined to ensure positive transition of the company into a conglomerate. “At the heart of our conglomerate transition is our diversification pillar, which we successfully kick-started in 2020 through the cashew processing business. We expect to reap significant benefits from our diversification efforts in the medium to long-term. We have achieved notable success so far, including exporting processed cashews to the international market. We are also looking at other sectors like healthcare, where we can create added value,” he said.
Richter reeled out Julius Berger’s recent construction feats in the N120.6 billion Bodo-Bonny Road project in Rivers State, and the Second River Niger Bridge (at about N400 billion), which he described as a key national infrastructure with immense socioeconomic benefits for the contiguous states; the Abuja Kano Road; and Abuja to Kaduna with section yet to be completed. Others are: the iconic architectural worship centre in Uyo, Akwa Ibom State.
On the company’s financials within the period, Christian Hausmann, the director of finance said due to the management’s rigorous cost management, gross profit, operating profit, and pre-tax margins improved in 2023 compared to 2022, despite the local and global inflation environment. He said the company’s assets and equity recorded positive trends in H1 2023.
Hausmann said Julius Berger invested in property, plant, and equipment to support its growth and diversification strategy, with continued upward trend in return on equity at an annualised rate of 15.8 per cent as of June 2023. This, he said, demonstrated JBN’s ability to create value for its shareholders.
