Lagos – Computer Warehouse Group Plc (CWG) on Tuesday notified the Nigerian Stock Exchange (NSE) that the company would declare a loss for the financial year ended Dec. 31, 2015.
The News Agency of Nigeria (NAN) reports that this is contained in a profit warning statement by the company to the exchange.
The company, in the warning, said that it would “incur a number of significant one-off charges that will contribute to an overall loss for the financial year ended Dec. 31, 2015.’’
It said that the report followed the preliminary review of the group’s management accounts.
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The company said that foreign exchange losses principally driven by significant exchange rate volatility affected its activities.
It said “exchange rate which had been largely stable within a narrow band suddenly plummeted and remained uncertain from the first quarter of 2015, following the significant drop in oil prices.’’
It stated that inventory write-offs due to technology and business model changes, which made some previous investments such as investments in VSAT and Multiprotocol Label Switching (MPLS) network obsolete, contributed to the loss.
The statement added that the group would report an operational loss due to reduction in margins in its traditional re-seller business and inability to transfer increased cost of doing business to customers due to already existing contracts.
The company, however, assured that the board had taken steps to reposition the group for an improved performance in the current year.
It stated that recent investments in cloud and subscription-based business, increased efforts in making its traditional re-seller business more efficient and a restructuring of operation with focus on profitability would turnaround the company. (NAN)