ABC Transport Plc, an inroad into the road transport sector, did not only innovate the sector but deepened local road transportation and made it an alternative mode of transport for all classes of people in Nigeria.
It is also on record that ABC Transport introduced formal road transportation within the West Coast, with the introduction of West Coast coaches that transport passengers from Lagos to Accra Ghana, daily.
This is inspite of so many challenges faced, by the sector in the country. These challenges include bad road network, insecurity, high cost of diesel and vehicle spare parts.
Frank Nneji, founder and managing director of the firm, attributed the success story of ABC Transport Plc, to focus on value creation.
“Creating value for our customers, having a sense of innovation, while focusing on what is important and works for the industry.
“And what is important in the industry is comfort and safety and this is where we pride ourselves. We also focus on a staff culture that is really very strong, investing in human resources, because the rolling stuck-the busses are driven by people”.
It is heartwarming that ABC transport Plc in 2004, opened the West Coast corridor for road transportation, prior to that time, there wasn’t any formal road travel, except by air.
That corridor is strong, according to Nneji, noting that his firm focuses on the tourist segment, revealing also that there are a lot of trade going on between Nigeria and Ghana.
Although that segment has attracted so many other players, but ABC has its position, as the foremost and preferred operator on the West Coast corridor with quality service to commuters.
According to the ABC Managing Director, our inroad into West Coast, has opened up the corridor to more operators. “I remember, when we started we were doing one bus per day, but now we run several busses and more than six other companies are on that route.
He, however, decried infrastructural deficits, insecurity and high cost of procuring new stuck-vehicles and spare parts as major challenges faced by the sector.
In his words, “The road is like our own raw material when the raw material is bad, you won’t have a perfect product and of course, safety and security.
“When we started, a huge percentage of our travel was done in the night, but right now you can’t see much of that, because of insecurity. Manpower is an issue, as well as the schools, are not producing very wonderful hands to run the business.
“Also we consume a lot of diesel and of course the price fluctuation is killing, right now a litre of diesel is N220 per litre and we consume tons and tons of diesel, to run the buses and trucks, so it’s quite a big challenge. And these are challenges that couldn’t have been there if we had refineries”, he observed.
“Despite these challenges, Nneji stated that prospects in the road transport sector are high because people will continue to travel. “You cannot change personal touch with communication. You cannot shake hands by phone.
“People still need to travel for business and social interaction and so; the sector will continue to expand and of course it is dependent on a strong economy. As the economy expands, the sector expands also”.
However, ABC Transport Plc, has returned to profitability after recording profit before tax of N105.31 million in 2017, as against a loss before tax of N258.11 million in 2016.
In like manner, its profit after tax was N15.78 million in 2017, against a loss after tax of N359.64 million in 2016.
This is despite the microeconomic and socio-political variables that affected its operations, which reflected on the firm’s operational efficiency and the result for the year ended December 31, 2017.
Olumide Obayomi, chairman, ABC Transport Plc, announced the result at its 2018 (25th) Annual General Meeting (AGM) held at Mayfair Suites and Conference Centre, Egbu Road, Owerri, Imo State.
He explained that the firm’s turnover grew by a mere 1.6 percent from N5.63 billion in 2016 to N5.72 billion in 2017, stating that the firm has succeeded in turning around the loss of the previous year.
He hinted that the firm’s return to profit was helped by the investment in income of N163.35 million received from its subsidiary Transit Supports Services Limited.
Obayomi, however decried the operating environment, which according to him, remained challenging with a myriad of economic, social and political problems, beleaguering its business activities.
He also observed that the manacles of the economic recession, which beset the nation in 2016, are still very much with the country, stressing that the key sectors, such as manufacturing, trade and services, from which the transport sector mainly derives her demand are yet to fully recover from the recession.
“Also the lack of local oil refining capacity has led to volatilities in the local price of automotive gas oil (AGO).
“The rise in the cost of this key input alongside the rise in the cost of imported spares and consumables, occasioned, by the devaluation of the naira, has placed our operating experience at considerably high levels.
“Our road infrastructure has remained in a parlous state, leading to persistent impairment to our buses and trucks, extended journey times and increasing levels of avoidable road mishaps.
“The cankerworm of multiple taxations by agents of the 3 tiers of government, still persisted in the year under review, as the country’s transport industry remains largely fragmented and unstructured with no clear defining rules,” he stated.
He further observed that unscrupulous operators were encouraged to cut corners to the disadvantage of good corporate citizens, noting that successive governments have failed to see the imperative of intervening in an industry, as critical as road transport and logistics, which has the potential of catalyzing economic productivity to unimaginable heights.
The Chairman of the Board of ABC Transport plc, also noted that imbalance in the value sharing and extraction in the transport sector is punitive and crippling.
According to him, “A situation where we pay more taxes to government as corporate taxes than what the shareholders receive over the same period can only serve as disincentive to new investments and hamper growth in the critical land transport sector in which we operate”.
He revealed that the company has paid a total of N1.52 billion in corporate taxes (including education and other similar taxes) for a period up to December 31, 2017, whereas only N783 million was paid to shareholders over the same period.
He recommended the rebalancing of the value sharing and extraction equation between the government and shareholders, as key capital providers, otherwise sector operators would continue to suffer inadequate investment, lower level of contributions and GDP relevance with attendant negative impact on the economy.
To reward its shareholders for their abiding faith and patience and in keeping with the promise the company made at the last annual general meeting, the board of directors of the company recommended the sum of N49.73 million as dividend, at 3 kobo per share, for distribution to shareholders.