ABC Transport Plc has staged a remarkable financial comeback in 2024, reporting a pre-tax profit of ₦918.4 million, an impressive reversal from the ₦368.6 million loss recorded in 2023. This major turnaround comes on the back of a 70.7% surge in total revenue, which reached ₦12.5 billion, powering growth across all its core business segments and offsetting the impact of rising operating costs.

The company’s gross profit climbed by a solid 72.5%, hitting ₦2.87 billion compared to ₦1.6 billion in the prior year, despite a simultaneous 70.2% spike in expenses. This sharp rebound highlights effective revenue mobilization and the benefit of internal restructuring efforts that took shape during the year.

Let’s explore the key factors and segments that underpinned ABC Transport’s resurgence in profitability.

Segmental Performance: Cargo and Haulage Lead Growth

A deep dive into ABC Transport’s performance by business segment reveals that the cargo division stood out as the primary revenue and profit driver. It posted ₦4.09 billion in revenue, soaring from ₦2.4 billion in 2023. Even after absorbing ₦3.9 billion in operating expenses, the segment delivered a healthy ₦349.9 million in pre-tax profit.

The haulage segment followed closely with revenue of ₦2.94 billion—more than double its ₦1.2 billion contribution in the previous year. Although expenses reached ₦2.71 billion, haulage operations still generated a pre-tax profit of ₦234.5 million.

Not all divisions achieved the same momentum. The Shuttle and City Transit Intercity (CTI) services posted modest revenues of ₦356.3 million and ₦355.1 million respectively. CTI reported a profit of ₦68.2 million, but the Shuttle service faltered, ending the year with a ₦87.6 million loss due to operating expenses ballooning to ₦518.1 million.

Revenue Streams: Load and Waybill Dominate

ABC Transport’s performance also benefited from diversified and high-performing revenue sources:

• Load and Waybill activities topped the list, bringing in ₦4.1 billion.

• Haulage operations followed, growing by an impressive 142.9% year-on-year to contribute ₦2.9 billion.

• Transport revenue added ₦2.6 billion.

• Vehicle and spare parts sales chipped in ₦2.4 billion.

• Hospitality services, although smaller in scale, still generated ₦355.1 million.

This widespread revenue growth served as the base for profitability. However, beyond top-line growth, a critical shift in how ABC Transport handled non-core income streams played a defining role in its bottom-line recovery.

Other Operating Income: Franchise and Indemnities Turn the Tide

One of the most significant changes in 2024 was the substantial improvement in other operating income. The company generated ₦462.5 million in this category, overturning a loss of ₦57.16 million recorded in 2023.

Key components of this rebound included:

• Franchise revenue, which surged 201.3% to ₦261.2 million.

• Insurance indemnity, climbing sharply to ₦91.4 million from ₦7.4 million the previous year.

• Training income, contributing ₦68.7 million.

• Other gains included rental income of ₦17.2 million, scrap sales of ₦15.1 million, and ₦4.4 million in exchange gains.

This buffer proved crucial in offsetting a notable increase in administrative expenses and helped anchor the company’s pre-tax profit.

Cost Pressures Persist, but Efficiency Gains Provide Cushion

While revenue and other income figures improved, ABC Transport wasn’t immune to cost increases. Administrative expenses grew by 26.4%, reaching ₦2.2 billion in 2024, up from ₦1.7 billion in the prior year, which itself had seen a 44.52% rise.

A breakdown of major expense drivers includes:

• Exchange losses, which comprised the largest share at ₦586.2 million (26% of admin expenses).

• Personnel costs, which totaled ₦351.6 million.

• Transport expenses, contributing ₦177.1 million.

• General expenses and electricity, which added ₦134.7 million and ₦103.4 million respectively.

Despite these challenges, the ₦462.5 million boost in other operating income helped cushion the impact. This translated into a robust operating profit of ₦1.3 billion, a dramatic leap from just ₦40.2 million in 2023.

Finance Costs and Final Profit Position

Even as the company recorded a higher finance cost of ₦465.9 million—a 13.98% increase from the previous year—its financial footing remained strong enough to deliver a pre-tax profit of ₦918.4 million.

This significant turnaround underscores management’s success in strategically navigating market challenges, controlling costs where possible, and leveraging growth opportunities across various revenue streams.

Conclusion: A Strong Year and a Solid Foundation for Future Growth

ABC Transport’s 2024 performance marks a pivotal shift from the difficulties of the prior year. With all major revenue lines growing, robust contributions from key business segments like cargo and haulage, and a sharp uptick in non-core income, the company has demonstrated resilience and strategic depth.

Although rising costs—especially in administration and finance—remain an area of concern, the company’s ability to grow earnings and achieve operating leverage is commendable.

Going forward, maintaining this trajectory will depend on continued cost discipline, innovation in underperforming segments like Shuttle services, and maximizing income streams such as franchise and training. With a renewed focus on operational efficiency and a more diversified income base, ABC Transport looks poised to consolidate its gains and build on the momentum for sustained profitability in the years ahead.