Unmask NG understands that beverage companies in Nigeria are recording losses, an unexpected development that has crippled their operations.

Speaking on the development, the acting Director-General of the Manufacturers Association of Nigeria (MAN), Ambrose Oruche, said beverage companies’ warehouses are loaded with goods they cannot sell, which he said has been contributing to their revenue and profit losses.

“Breweries are really going through a hard time because most of their warehouses are loaded with goods they cannot sell. Why will they produce when they cannot sell? Most of their customers come from bars, restaurants, hotels and hospitality companies.

“Now, hospitality businesses are shut down and the bars have not been allowed to reopen. They have a workforce they will pay and they also integrate backward to the agricultural sector where they are sponsoring farmers in sorghum production,” Punch quoted Oruche as saying.

Every beverage company is affected

Mike Olanrewaju, the Deputy General Secretary for National Union of Food, Beverage, and Tobacco Employees, admitted that there’s no beverage company that has not been affected by the novel infectious disease in the country.

While contract workers who are not under any union have been sacked, Olanrewaju stated that workers under labour union are still in the beverage companies workforce due to discussion on terms and conditions with the labour union.

His words; “Some of the companies are contemplating total shut down while others are planning to reduce their workers by half.

“Some of them are considering redundancy and the situation is highly devastating on food and beverages companies. No company is exempted. Every company is affected badly.

“Alcoholic and soft drinks producers are affected because there is no massive celebration in the country. People can only do take away at restaurants and many are forced to stay at home. To sell them has become very difficult.

“The irony is that most of these products have short expiry dates because they are consumables. Some can’t last more than six months.”

Here’s what we know

Quite a number of factors have contributed to the financial losses beverage companies have recorded so far. Some of these factors include –Low patronage from consumers. It is however pertinent to note that despite the ease of coronavirus lockdown in the country, beverage companies don’t have clients to sell to. In fact, hospitality businesses, bars, and clubs remain shut to customers.

With their warehouses filled with unsold drinks, Unmask NG was reliably informed that a high volume of beverage companies have expired drinks in store.

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Amongst the many sectors affected in this torrid period is the aviation industry. This is because of the lingering lockdown triggered by the infectious disease.

While other sectors have partially commenced operations, the aviation sector is still grounded, a situation causing panic among airline operators across the country.

How COVID-19 crippled Nigeria’s aviation industry

Between March and April 2020, Nigeria’s aviation industry recorded a loss of no less than N180 billion. This is according to the former President of National Associations of Nigerian Travel Agencies (NANTA), Bankole Bernard.

Due to the pandemic impact, while some employees in the aviation sector have ceased payments for those who still have jobs until business situations improve, already, about 24,000 people have been rendered jobless.

A bailout call

As airports remain shut to business due to the continued lockdown in the country, the Asset Management Corporation of Nigeria (AMCON), has pleaded with the Federal Government to offer them financial relief or bailout, to help airline companies to retain jobs in the aviation sector.

According to the Executive Director of AMCON’s aviation portfolio operations, Aminu Ismail, the bailout will create jobs and prevent mass sacking in the aviation sector.

While explaining that the government’s intervention won’t be to acquire assets belonging to airline companies, Ismail noted that it will aid the growth of the industry, and at the same time, help airline operators expand their fleet. 

Here’s what we think

The aviation sector in Nigeria is characterized by a long history of financial problems and volatility. Thus, it has overtime been inherently unstable.

While the lingering COVID-19 is aggressively ravaging the economy, airlines are now left with the option of either to sustain with a fair damage until the sector starts to slowly pick up, or go bankrupt.

It is however a known fact that the aviation industry has never been strong, even before the pandemic. Therefore, Unmask NG subscribed to the bailout request, and we hope it will help airlines continue their operations once the infectious disease is under control.

The post COVID-19: Panic As Mass Sacking Looms In Nigeria’s Aviation Sector appeared first on Business News in Nigeria.

As COVID-19 continues to ravage different sectors of the economy, including the hospitality sector, Transcorp’s group revenue for the period under review, dropped to N4.17 billion, compared to the N4.18 billion recorded in Q1 2019.

Similarly, its gross profit fell to N3 billion in 2020 Q1, from the N3.10 billion garnered in the corresponding period of last year.

Transcorp’s defense of financial performance and affected projection

According to Transcorp, its 2020 Q1 result was impacted by the lingering coronavirus pandemic.

A statement from the company read partly; “Transcorp Hotel plc started the year 2020 optimistic with detailed plans and budget to surpass the N20bn revenue performance achieved in 2019.

“With the Global Coronavirus Pandemic, the hospitality industry has been negatively impacted.”

“Nigeria has witnessed an increase in confirmed cases which led to the closure of airports and flights and an official lockdown of the FCT issued by the Federal Government to ensure the effective combat of the virus. All of these have negatively impacted the hotel and its business activities in this period.

“The Company anticipates that its future results of operations, including the results for 2020, will be materially impacted by the coronavirus outbreak. However, given the speed and frequency of continuously evolving developments with respect to this pandemic, the Company cannot reasonably estimate the magnitude of the impact on its results and its operations, and, if the outbreak continues on its current trajectory, such impact could grow and become material to its liquidity or financial position.”

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