Daar Communications Plc, the parent company of AIT, disclosed a significant financial downturn in its latest annual report, posting a loss of N1.6 billion for the year ended December 31, 2023.
This represents a substantial increase from the previous year’s loss of N768 million, reflecting a series of strategic and operational challenges faced by the media giant.
The company has seen its accumulated losses rise to over N16 billion as it struggled to achieve profitability in recent years.
Revenue Decline: The company’s revenue fell by 6% year-over-year to N4.51 billion from N4.79 billion, signaling a downturn in its core operations.
Strategic Acquisition and Cash Flow: In a bid to expand its digital footprint, Daar Communications invested N400.9 million in acquiring AIT News 24, which impacted its cash reserves significantly. This investment was part of the company’s strategic shift towards digital and online media platforms. However, the total cash flow from operating activities stood at N585 million, only slightly lower than the previous year’s N629 million, showing some resilience in operational cash management .
Negative Retained Earnings and Revaluation Impact: The financial statement revealed a deepening pool of negative retained earnings, amounting to N16.8 billion. This dire financial position was somewhat mitigated by a revaluation of fixed assets, which added N17.2 billion to the company’s books. This revaluation was crucial in avoiding negative shareholder funds and bolstering the company’s financial position against its substantial liabilities .
Fixed Asset Revaluation: A significant revaluation of property, plant, and equipment, conducted by external valuers, led to an increase in asset values which provided a temporary relief on the balance sheet. This revaluation generated a surplus of N17.2 billion, crucial for maintaining a positive equity position despite the operational losses .
Daar Communications has faced numerous challenges over the past year, including competitive pressures and shifting viewer preferences toward digital content.
The acquisition of AIT News 24 is part of a broader strategy to revitalize the company’s offerings and capture a younger, more digitally savvy audience.
As part of its recovery strategy, the company is also looking to leverage its revalued assets to secure better financing terms and pursue new revenue streams. The focus will likely be on enhancing digital content delivery and monetizing its online presence more effectively.
The company’s share price closed at 69 kobo per share and is trading at about 49% of its book value. It also has a payable of about N11 billion out of which N4.1 billion is owed to its staff and another N2.8 billion to its suppliers.
The company recently appointed Emeka Mba, Obi Asika, Chukwudumije E. Igwe, and Hon. Onyibe, Magnus Chukwuma as non-executive directors on its board.
Based on its latest audited accounts, DAAR Investment & Holdings Co Ltd. still holds 61.13% of the company.
