Computer Warehouse Group, CWG [CWG:NL] just released its Q1 2016 result and it is not good nor bad per say. Here is why:
The company made a net profit of NGN 11 million compared to a huge net loss of 230 million it reported in Q1 2015. The company’s major challenge is its cost of sales and operating expenses. Its gross revenue fell by -28.9% to NGN 2.7 billion compared to NGN 3.8 billion it reported in the same quarter last year.
CWG’s has managed to lower its cost cost of sales that dented its balance sheet to NGN 2 billion compared to NGN 3.2 billion. This is a 33% reduction. However, the company’s operating profit went up by 1% to NGN 624 million compared to NGN 617 million declared in 2014.
Does this mean the company has no magic wand to reduce its overhead?
CWG is a major provider of banking software, servers, co-location, IT and networking infrastructure to major commercial banks and blue chips in Nigeria.
The negative financial outlook confronting Nigerian biggest banks might have a deeper implication on CWG’s profitability.