Union Dicon Salt posts profit despite zero revenue, Danjuma forgoes N949m

Union Dicon Salt Plc has reported a profit of N683.87 million for the financial year 2020, compared with a loss of N117.52 million in the previous year.

The company, whose board is chaired by General Theophilus Yakubu Danjuma (retd.), posted a profit before tax of N685.96 million last year, compared with a loss before tax of N117.18 million in 2019.

As at Dec. 31, 2020, its current liabilities exceeded its current assets by N1.39 billion, with a negative shareholders’ equity of N1.49 billion.

The company is currently experiencing difficulty in maintaining a positive working capital position and has not been generating income from its core business since 2005, according to its audited financial statements.

“The profit before tax of N686 million recorded during the year represents waiver of liability by Tak Continental Limited,” it said.

The salt-producing company said there was an immediate need to address the impact of the negative working capital and net liabilities.

It said, “As part of the measures to sustain the going concern, the management has entered into a joint venture arrangement with Joatalim Logistic Limited for the use of the company’s yard in Apapa.

“This arrangement is expected to fetch the company a rental income in the sum of N180 million annually to sustain the administrative and other overhead costs. The company is also in discussion with other potential investors on the use of the Port-Harcourt factory/jetty for the production of salt and flour.”

The board, according to the annual report, is of the view that the discussions with these investors would be successful and this would lead the company back to the production of salt in the immediate future.

It said, “In addition, General TY Danjuma, the chairman of the board and a key shareholder, has agreed to provide the necessary financial support to maintain the company in continous operating state and would not demand for the payment of the sum of N949.03 million due to him from the company in the subsequent 18 months from Dec. 31, 2020.

“He also confirmed in his capacity as a director and shareholder of the company to provide the necessary financial support to maintain the company in continuous operating state and in agreement with the other directors and/or shareholders to inject additional funds into the company.”