Ju lius Berger’s br idge to prosperity

Theopeningofthelong-awaitedSecondNigerBridge marksoutabrightfuturefortheNigerianconstruction firm,aswellasforthecountry’sSouthEast

By TEMITAYOLAWAL inLagos

Cause for celebration:the Nigerian constructionconglomerateJulius Bergerhasfinally delivered onan age-old promise by the country’s leaders to builda secondbridge across the NigerRiver.

PresidentOlusegun Obasanjo made the promiseonhisarrival as civilian presidentin 1999… but only flagged off construction a few days before he leftoffice, in 2007.

Fitsandstartsand years later, thebridge finally opened totraffic on15December. LinkingOnitsha inAnambra State with Asaba,the capital of Delta State, it is hoped it will help restart economic activity inthe regionafterthe end oftheoil boom and Covid-19.

Theconstructionsector’s contributiontoNigeria’s GDP fellfrom

4.35%in2015 to -5.95%in2016, accordingtothe National Bureau ofStatistics(NBS).Mirroringthat, Julius Berger recorded itsbiggest lossin years, hit by thedisappearance of itsmajorcapital sources – governmentspendingand foreign direct investment – andhighadministrative costs.

Civil works constitutethe company’s biggestearneroutof itsthree core segments, which alsoinclude building works and services. In its 2016financialstatements, it posted more than N3.8bn

N9.5bn

JuliusBerger’sprofitaftertaxfor2021, showingaturnaroundinfortunesfor theconstructioncompany

(nearly$8.3m) loss aftertax, a sharp declinefromits N2.4bn profit aftertax a year earlier.

Signs of recoverycame in2021 when JuliusBerger paid its highest dividendinfive yearsatN2,500 pershare, upfrom N400inthe previous year Its recently released 2022unaudited results also show thatthecompany is returningtothe profitabilitypath.

Compared to2021’s results, the company grew its revenue by 23% toN440bn;grossprofit by 3%to N68.5bn;profit before tax by 8.5% toN15.4bn; andprofitafter tax by 11.7% toN9.45bn,accordingto Nairametrics analysis. This, along with Julius Berger’s stringof big projects, brightenits2023outlook.

A salveand a symbol

TheSecondNigerBridgehas nationalandpoliticalimportance inNigeria forseveral reasons.It connectsthesoutheasternpartof Nigeria,wherethereare regular calls forsuccession,tothree other regions:South West,North Central andSouth-South.Italsocomplementstheoldandonlybridgeused forthispurposeuntilnow. Built in1965,theRiverNigerBridgeis perenniallycongested.

Stanley Anyadufu,director generaloftheOnitshaChamber of Commerceand Industry, says thebridge willsignificantly reduce traffic congestionand ease doing businessin the SouthEast, which is a keymanufacturing region.

A recent report by theNational Inland WaterwaysAuthority revealed that65%ofimported containers are destined for the region.

“With the bridge, and the reductionintraffic congestion that it will facilitate, there willbe man-hourgains and faster logistics movement ofinputs for [the]manufacturingthat the regionisknown for,” Anyadufusays

Consideringthatthisimportant bridge has been a political campaignmattersincethe1979elections, it wasa major achievement for Julius Berger to be selected tobuild it by PresidentMuhammadu Buhari,after the project was renegotiated andits funding retooled Thecompany finallytook over theconstructionofthe bridge in 2015, but there was stillpublic scepticismthat it was ever goingto becompleted.

Theopeningto vehiculartraffic of the 1.6kmlongbridge duringtheChristmas and New Year celebrationsis a majorstep, but otherpartsofthe infrastructure projectare still to be completed. They include the constructionof a 10.3km highway, anOwerriinterchange, and a toll station atObosicity.

As the construction company that eventually surmounted thedauntingtask, Julius Berger saw its stock go up Itisfurther positioned asthe construction company of choice for otherprojects ofsuchnationalsignificance.

Insidetrackwithgovernment

“Wieser, congratulationson an excellentjob done onthisproject byyou and your workers

You have justified our investmentin this project,” theminister offinance, budget and national planning, ZainabAhmed,told Julius Berger’s projectdirector Friedrich Wieser during her visit tothesite inApril 2022.She alsocommended the company for the numberof womenitemployed onthe constructionsite.

Other keyprojectsthatthecompany iscurrently buildinginclude the Abuja-Kano Road,which is a DualCarriageway of375.9km fromthe Federal Capital TerritoryAbuja,throughcities in Kaduna andthen to Kano(part of the Lagos-Algiers Trans-AfricanHighway); key industrialcities innorthernNigeria;andthe38km(including17 bridges) Bodo -Bonny Road,whichwillconnect Bonny Island,partof Nigeria’s key oil and gas base, tothe restofRiversState andNigeria.

Nigeria is by far thebiggest market for the Abuja-headquartered company, which floated on theNigerianStock Exchange in1991 In2020, Julius Berger generated N237bnin revenuefrom Nigeriaand the remainingN5bn fromits operationsinEuropeand Asia.

In2017, thecompany ventured intothe oiland gassector by acquiring a 20% stake in Petralon Energy Limited, in afirstmajordiversification move. InSeptember last year, italso diversified into agro-processing by buildingand commissioningits Lagos-based cashew processing plant, Mighty Kashoo.