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CWG alerts on decline in performance

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CWG alerts on decline in performance

As the investing public awaits its results, CWG Plc has alerted that it has recorded significant decline in its performance.

The board of directors of the computer and information technology company alerted that performance and earnings will be significantly lower than the previous reports.

In a profit-warning released at the Nigerian Stock Exchange (NSE), CWG indicated that preliminary review of its accounts for the year ended December 31, 2017 had shown that estimated earnings and year-end financial projections “will be materially lower in comparison to prior year financials”.

“The reduction in earnings is predominantly a result of losses incurred due to the financial cost implications of non-actualised projects which have adversely affected the company’s estimated earnings and year end projections,” the company stated.

The reversal may come as a rude shock to the investing public who had been assured of sustained growth after the company pulled away from a losing streak in 2016.

CWG Plc, formerly Computer Warehouse Group, had reversed a pre-tax loss of N1.75 billion in 2015 to profit of N142 million in 2016.

Read also: Itakpe-Warri, Lagos-Ibadan rail projects to be completed this year- Amaechi

Chief Executive Officer, CWG Plc, Mr. James Agada, had said the 2016 results reflected the continuing focus of the company on sustainable income streams, cost management and extraction of best value for the shareholders.

He assured shareholders that the directors of the company would continue to chart the course of steady and sustainable growth with a view to ensuring good returns to Shareholders.

He expressed optimism that while the operating environment remains challenging, the company would build on its 2016 performance in 2017 as many initiatives are expected to be activated this year to support the steady growth of the Company.

According to him, in the face of the tough operating environment, the Group made a strategic decision to focus on profitable IT Solutions with less exposure to foreign exchange fluctuations and with predictable recurrent revenues.

He noted that the decline in costs was as a result of several initiatives taken by the management including many measures taken to mitigate foreign exchange losses, reduce borrowings and improve receivable collections. Foreign exchange loss had stood at N600 million in 2015 while the company had also suffered inventory write-offs of N431 million and income reversals of N250 million in 2015.

 

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