sitemaps.org/schemas/sitemap/0.9/sitemap.xsd BrandArena: Red Star Express Plans to Commission Multi-billion Naira Cargo and Truck Facilities

Wednesday, 26 January 2022

Red Star Express Plans to Commission Multi-billion Naira Cargo and Truck Facilities


Red Star Express Plc, Nigeria's leading courier and package delivery company, has reaffirmed its commitment to complete and commission its multi-billion Naira cargo warehouse and trucking facilities before the end of 2022.

The Group Managing Director of Red Star Express Plc, Dr Sola Peter Obabori, while speaking with BrandArena and other the media outlets at the company’s head office in Lagos, said that the facilities located along the Lagos Airport and Lagos-Ibadan Expressway, respectively, are to create better storage for its customers' cargos and goods, purchase more trucks to improve logistics, and put in place ICT resources, among other things.

“We are hopeful that by the end of the financial year [March 30th, 2022], the cargo facility at the airport will have been completed. Two other facilities are coming up on Lagos-Ibadan Expressway from where the company will respond to customer requests. The facilities are also targeted for commissioning this year. So we’re grateful the company has grown in our fixed assets, in our current assets and the cash-flow has grown and the staff strength has also grown”, he said.

According to Obabori, since the advent of COVID-19 in 2020, the Company’s boardroom has not been put to use more than three times.

“We haven’t had any board meetings, physically, since 2020. All board meetings and management meetings have been held virtually, except for one of two that required us to display some facts and figures. That is what technology has done for us and we are trying to see how it could further help us improve our business environment; how we cut costs and interact among ourselves including the customers.

“We are focused on the Small and Medium Enterprises (SMEs) space for this year. We have a programme called SME1000 which is a platform that enables us to impact the SME sub-sector in Nigeria by giving them access to our services at a reduced cost. Essentially, it presents a golden opportunity for these SMEs to grow.

Impact of AfCFTA on the Industry  
“On the African Continental Free Trade Area (AfCFTA) is also coming with many good needs. For example, the Pan-African Payments and Settlement System (PAPSS) has been launched for cross-border payments that will entrench cost reduction; reduction in duration and time variability; decreasing liquidity requirements of central banks for settlement as well as its own payments; and strengthening Central Banks’ oversight of cross border payment systems. These are major challenges we faced in the recent past and PAPSS will help us resolve the problem. Therefore, all the assets we have invested in them in the past will now help us to reap the benefits in AfCFTA”, he said.

The Postal Industry Reform bill was passed by the Nigerian National Assembly in 2021, but industry players, particularly independent operators under the auspices of the Nigeria International Air Courier Association (NIACA) and the Association of Nigerian Courier Operators (ANCO), are unhappy with some of the bill's provisions.

Commenting on the bill, the Red Star Express boss said: “We are always prepared. We have been in the mix for a long time. We are not only preparing to survive but to thrive under the new regulatory regime if the status quo (of the Bill) is maintained as passed by the NASS.

“Meanwhile, I haven’t seen the final bill as sent to the President, but based on deliberations during the process of the Bill’s passage, we (operators) submitted memoranda showing a collective discontent with some provisions, and suggested how they can be redrafted. For instance, certain roles and powers are given to the Nigeria Postal Service (NIPOST) which may not augur well for the industry. We believe that the NASS could not have thrown our observations out of the window.

“So, if it is assented to today by the President, I believe we will be fine. I haven’t heard any contrary voice from the NIACA team. We have also spoken to Prof. Isa Pantami, the minister in-charge of Communications and Digital Economy on the same matter and I am confident that we shall have the course to breathe a sigh of relief very soon.

Red Star Express Performance in 2020 - 2021
The Red Star Express recorded N89.09 million and N76.2 million in short-term leasing charges for the Group and the firm, respectively, in the 2021 financial year, compared to N136.5 million and N107.87 million in the previous year.

In 2021, inventories carried at net realisable value were expensed N719.45 million and N250.7 million, respectively, compared to N729.6 million and N237.9 million in 2020.

The company also invested N95.8 million in property in 2021, compared to N98.1 million in 2020. In 2021, it will invest N3.44 million in shares, up from N2.99 million in 2020. In 2021, the FGN Bond will be worth N585.45 million, up from N547.4 million in 2020.

On liabilities position, Red Star Express recorded a 12 per cent increase in total liabilities to N3.31billion in 2021 from N2.95billion in 2020.

The breakdown of total liabilities showed that Total current liabilities gained three per cent to N2.72billion in 2021 from N2.64 billion in 2020 while non-current liabilities closed 2021 at N586 Million from N308.8million in 2020. However, total equity dropped by 3.3 per cent to N4.23billion in 2021 from N4.38billion in 2020.

The major factor Red Star Express recorded a decline in total equity was the group’s six per cent decline in retained earnings to N2.33billion in 2021 from N2.48billion recorded in 2020.

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