Chellarams Plc, the diversified conglomerate with significant interest in the dairy sector as well as in industrial chemicals and machinery reported a net loss of ₦2.8bn for the full year ending on 31st March 2019.

The maker of Oldenburger, Regal and Real milk brands said that rising costs of sales hurt margins leading to a net loss. Despite a 28% rise in sales to ₦11.2bn, cost of sales skyrocketed by 55% to ₦10.7bn from ₦6.9bn in the previous year leading to a Gross Profit decline of 71% to ₦527m.

However, the dairy maker reported strong sales growth in its FMCG business line which includes its joint-venture dairy business, Chellarams-DMK Limited. The segment was the strongest in all of its business lines with 123% sales growth to ₦2.95bn. The industrial Chemicals business line also performed strongly with 70% sales growth to ₦4.1bn.

However, the growth was not enough to offset significant rise in costs as the company declared a pre-tax loss of ₦985m in its FMCG segment due to higher cost of sales of ₦3.1bn on revenue of ₦2.9bn.

Chellarams did not report any activity in its bulk milk ingredients and Cycles segments respectively.

The company noted in its financial statement that it has discontinued its US dollar denominated term loans and entered new term loan agreements denominated in Nigerian Naira.