Category: Capital Market

The management of FBN Holdings Plc has ruled out any plan to raise new capital in the meantime as the holding group prefers to continue leveraging its balance sheet to drive growth in the immediate to short-term period.

Speaking during a special interactive session with analysts and investors, the management of FBN Holdings said going to raising capital in the market is not an option.

According to the holding group for First Bank of Nigeria and its former subsidiaries, although there is flexibility to go to the market to raise capital, but that is not an option now. First Bank prefers to leverage its existing tier 1 scope, capitalise earnings and deliver effectively.

The group noted that the full implementation of Basel III will not affect First Bank as Basel III is more of a liquidity and leverage ratio, which is not a problem for the bank.

FBN Holdings said it was expecting the Central Bank of Nigeria, which introduced the Basel III guidelines to determine the timeline for full implementation, as group continues to ensure it meets all regulatory guidelines.

The group pointed out that the recent increase in Monetary Policy Rate (MPR) will benefit the bank as its current balance sheet structure puts the group in a fantastic position to benefit from rate increases, as it will also allow First Bank to reprice its loan portfolio.

Audited report and accounts of FBN Holdings for the year ended December 31, 2021 indicated double-digit growths in the top-line and the bottom-line. Gross earnings rose from N590.66 billion in 2020 to N757.30 billion in 2021. Profit before tax doubled by 99.1 per cent to N166.66 billion in 2021 as against N83.70 billion in 2020. Profit after tax grew by 68.4 per cent from N89.73 billion to N151.079 billion. Earnings per share thus increased from N2.45 in 2021 to N4.17 in 2021.

The balance sheet of the group also emerged stronger. Total assets rose from N7.69 trillion in 2020 to N8.93 trillion in 2021. Customers’ deposit grew to N5.85 trillion in 2021 as against N4.9 trillion in 2020. Loans and advances to customers also improved from N2.21 trillion to N2.88 trillion. With total liabilities rising from N6.92 trillion to N8.05 trillion, shareholders’ funds increased from N765.17 billion in 2020 to N879.86 billion in 2021.

FBN Holdings has declared a dividend of N12.56 billion, about 8.3 per cent of the total net earnings recorded in 2021.

According to the audited report, a total of N12.563 billion would be distributed as cash dividend to FBN Holdings’ shareholders, representing a dividend per share of 35 kobo.

With 1.196 million widely spread shareholders, FBN Holdings has one of the largest shareholders’ base in Nigeria and it is reckoned that nearly six out of 10 investors have the shares of the oldest banking group in their portfolios.

Eunisell Limited, a global chemical and speciality fluid management company, has opened application to raise up to N4 billion under its series II commercial paper issuance.

The new issuance is part of the company’s N10 billion commercial paper (CP) programme.

Eunisell  is offering a 270-day CP with discount rate of 11.86 per cent and implied yield of 13.00 per cent. Minimum subscription to the offer is N5 million with multiples of N1 million thereafter.

The company will use the net proceeds of the offer to augment its general corporate purposes including short-term funding requirements.

Financial report indicated that in 2021, Eunisell recorded net revenue of N12.15 billion in 2021 as against N12.08 billion in 2020. Earnings before interest, tax, depreciation and amortization ( EBITDA) stood at N2.64 billion in 2021 as against N2.18 billion in 2020. Total assets rose from N14.61 billion in 2020 to N22.80 billion in 2021.

Eunisell supplies key products and solutions to a wide base of customers operating in Africa. The company commenced its full operation in 1996 and had grown to offer a full range of technical services to complement a wide range of specialty products.

Eunisell has an extensive network of suppliers including top international brands like Lubrizol, as exclusive representative in West Africa, Clariant, Houghton, Dow, Roemex and Tensid.

While the company headquarter is located in Victoria Island; Lagos; it has a 10,000 metric tonnes chemical blending plant and 50,000 m2 warehouse at Isolo Lagos.

Eunisell has a diverse range of customers across its offering with foremost brands like Exxon Mobil, Shell Nigeria, Guinness, Total Nigeria, Nigerian Breweries, OVH Energy, Unilever, Baker Hughes, amongst others.

Eunisell Limited and Boussole Integrated Limited had in 2018 launched a business combination that saw Boussole becoming a subsidiary of Eunisell. Boussole holds the majority equity stake in Interlinked Technologies Plc, a quoted company on the Nigerian Exchange (NGX).

Under the plan, Boussole became a wholly-owned subsidiary of Eunisell, but Boussolel remains the majority shareholder in Interlinked Technologies.

According to the arrangements, Boussole, an engineering services and procurement company planned to enter a joint venture with Eunisell in a business combination that would see both companies jointly executing transactions in power, oil and gas and the industrial sectors.

The Nigerian Exchange (NGX) plans to start a blockchain-enabled exchange platform next year to deepen trade and lure young investors to the market.

The move follows the introduction of regulations to guide trade in digital assets by the Securities and Exchange Commission (SEC) and the growing interest to adopt the distributed-ledger technology by businesses and policy makers across the continent, including in Kenya and South Africa.

The exchange looks to deploy the blockchain technology in settlement of capital market transactions.

Chief Executive Officer, Nigerian Exchange (NGX), Temi Popoola, in an interview, said that a lot of young and upcoming Nigerians favour such kind of technology and exchange wants to see how it can deploy it to grow its market.

Bloomberg reported that the plan is unfolding in the wake of a rout in cryptocurrency markets following the collapse of the Terra blockchain in May. Bitcoin has plunged more than 50 per cent  since reaching a record high last November.

While young Nigerians account for the largest volume of cryptocurrency transactions outside the US, according to Paxful, a Bitcoin marketplace, they have largely ignored the local bourse. Nigerians traded $185 million of Bitcoins on the platform in the first three months of the year, accounting for a quarter of transactions in the period on Paxful.

The NGX will partner with a technology firm and get the approval of regulators before the launch in 2023.

“Blockchain technology can facilitate different parts of the capital market, whether around creation of products or facilitation of the Exchange to trade financial assets,” Popoola said.

He said digitising transactions would help attract young buyers looking for diversified products as well as fast and easy access to the market.

NGX’s first complete electronic share offering, issued by MTN Group’s Nigeria unit last year, was 1.2 times oversubscribed, with 85 per cent of the investors under 40 years.

“It’s almost impossible to think of blockchain without including cryptocurrency, so if the adoption is not in agreement with central bank’s position, there may be skepticism from investors,” Gbemisola Alonge, a tech policy analyst at Stears in Lagos, said by telephone. Besides blockchain, the listed companies should be able to deliver returns to attract the target investors, she said.

Last year, the central bank ordered commercial lenders to stop transactions or operations in cryptocurrencies, citing a threat to the financial system. Nigeria’s SEC said at the time it would seek to protect investors and make the market more transparent.

Blockchain technology is catching on across the continent. South African authorities are engaging with the fintech industry to enable the incorporation of the distributed-ledger technology in the financial markets. In Kenya, lenders are seeking approval to deploy the technology in payments to reduce the incidence of bad loans. Nigeria introduced the eNaira, a digital currency last year, in a bid to boost financial inclusion in Africa’s most populous nation where a third of population have no access to financial services.

NOVA Merchant Bank will be hosting the 52nd quarterly general meeting of the Association of Chief Audit Executives of Banks in Nigeria next week in Lagos.

The meeting, which is themed “The future of internal audit in an increasingly digital world”, will bring together auditors and other stakeholders in the banking industry including the law enforcement agencies to deepen discussions on the need to create more innovative processes and formulate automation for internal auditors to succeed in the ever-evolving technology landscape.

Managing Director; Nova Merchant Bank Limited, Mr. Nath Ude, who is the chief host of the event, said the bank remains fully committed to supporting initiatives aimed at easing business solutions and promoting digitalisation.

“I am, particularly, happy at the theme for the event as the topic is apt and in line with the global trend of revolutionalised thinking and the future demands that auditors, who are now dealing with more advanced and more technical business processes, require advanced technical IT and IS skills to bring increased value to their execution,” Ude said

He further emphasised that the vulnerability to financial loss and data compromise in the digital space has been a significant concern that requires auditors to understand the digital processes and exposures that businesses face.

Ude noted that a new breed of Internal Auditors will be needed to move organisations forward in this digital world and that businesses must recognise and support this as auditors are an integral part of the workforce.

Also reiterating the need for auditors to understand the digital processes, Chairman, Association of Chief Audit Executives of Banks in Nigeria, Mr. Uduak Udoh, said that the banking industry is automating the delivery of its services in line with technological advancement as such, auditors need to reskill, up-skill and innovate to be able to face the challenges of the time.

“Globally, banking services has been digitized and the recent Covid-19 pandemic has exposed and changed a lot in the way certain types of work are carried out. Banks especially are embracing remote work too as such; the need to open physical branches is beginning to dwindle and is no longer cost-effective. This new development has posed a new challenge to the auditors with the attendant risks to businesses,” Uduak said.

He further stated that the topic couldn’t have come at a better time and it is important Auditors continue to review their methodology in line with emerging issues in the digital space to be able to carry out their functions effectively.

The London Stock Exchange (LSE) has highlighted the important role played by Seplat Energy Plc in the growth of cross-border listing, especially of companies of African origin.

The LSE honoured pioneer chairman of Seplat Energy, Dr. Ambrose Orjiakor, with the ringing of the opening bell at Exchange. The symbolic act was part of activities to mark Orjiakor’s exit as chairman of Seplat Energy, a position he held for 13 years.  Seplat Energy is listed on both Nigerian Exchange (NGX) (NGX) and LSE.

Chief Executive Officer, London Stock Exchange (LSE), Julia Hogget, recalled that that Seplat was the first Nigerian company to list ordinary shares simultaneously on the LSE and NGX during which $535 million was successfully raised in initial public offering (IPO).

She noted that the listing of Seplat Energy and the innovation brought to bear in its cross-border share registration management have encouraged others to follow the same model

“I have had the opportunity occasionally to meet members in person, but this is really the first opportunity. Your contributions are such an important part. It is fair to say that there have been many African successes in London since the outset of the advisory group- LSE LAAG. And the trailblazing that you have done as chairman, I think it’s an illustration of that.

“Apart from the IPO was the financial innovation that took place following the listing in terms of the cross border settlement mechanism. It was also that innovation that enabled the seamless transverse shares between the UK and Nigerian share registers. That this mechanism has paved the way for other issuers to use the “Seplat Model” to dual list in London and the UK. So, Seplat apart from being an energy company has become a financial platform for investors following the IPO. All these with you at the helm, that Seplat became the first,” Hogget said.

At the event which held in London, Orjiako said Seplat Energy believes in enduring, strong and robust corporate governance practices, which underscored its success as a world-class company of African origin.

“For me to use this to mark my exit as the chairman of Seplat brings very old memories to me starting from 2014 when we first rang the bell to list our security in this market. One of the things that gladden my heart is the fact that everything on the board turned green as we rang the bell; this is very important for us in Seplat. Colour green not only signifies good performance in the market but because green is a very important symbol in Seplat.  It symbolises life, it symbolises what this company represents particularly sustainability and business.

“I want to thank you for this great opportunity.  I am the last of the founders of Seplat to leave. For Seplat, it is a promise kept. It is a very strong and apt statement to say that Seplat believes in enduring strong and robust corporate governance practices,” Orjiakor said.

Also speaking at the event, Basil Omiyi, Chairman, Seplat Energy Plc appreciated the kind gesture by the Exchange and London Stock Exchange Africa Advisory Group (LAAG) to honour Orjiako, who has led Seplat to build and nurture a very rewarding relationship with the Exchange since its listing” Omiyi noted.

Chairman,  LSEG’s Africa Advisory Group, Suneel Bakhshi, noted that there was a natural respect from all LAAG members for Orjiakor.

“I have seen that over the years, when we had some meetings in London, Nairobi, Abuja and hopefully many more to come. I feel that Orjiakor symbolises the spirit of LAAG in so many ways and obviously your confidence with what you achieved in Seplat supports that. You are the reason far beyond the successes of Seplat” Bakhshi said.

Shareholders of NASCON Allied Industries Plc at the weekend approved the distribution of about N1.06 billion as cash dividends for the 2021 business year amid commendations for the resilience of the fast moving consumer goods company.

At the company’s Annual General Meeting (AGM) in Lagos, shareholders approved the payment of N1.06 billion as cash dividends, representing a dividend per share of 40 kobo. NASCON, a subsidiary of Dangote Industry Limited (DIL), had reported increase in pre-tax profit from N3.9 billion in 2020 to N4.3 billion in 2021. The total dividend payout of N1.06 billion represents 35.7 per cent of net profit of N2.97 billion recorded in 2021.

Shareholders noted that the food-seasoning company has over the years recorded impressive performance, in spite of the harsh economic operating environment.

Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, commended the Board and Management of NASCON for their ability to declare and pay dividends despite the harsh operating environment which resulted from the Apapa Wharf gridlock and the downturn in national economy.

He noted that while other companies are lamenting and cutting down on production, the company is paying dividend which is commendable.

National Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs. Bisi Bakare said the performance reflected the ability of the management of NASCON to steer the company through difficult times especially in the face of lack of power, fluctuating exchange regime and dwindling purchasing power of consumers.

She said the overall performance of the company was a reflection of its seven sustainability pillars, which are geared towards ensuring that the company connects with  stakeholders.

Another shareholder, Mrs. Adetutu Siyanbola noted that NASCON Transport Team section should be commended as indicated in the financial report, for winning the best haulage company of the year out of the 684 companies that enrolled for the Road-Transport-Safety-Standardisation-Scheme of the Federal Road Safety Corps.

She pointed out that the company has over the years imbibed a culture known for taking good care of shareholders through consistent payment of dividends adding that despite the harsh operating environment occasioned by the global economic downturn, the company still paid a dividend of 40 kobo per share.

Acting Managing Director, NASCON Allied Industries Plc, Mr. Thabo Mabe said the company will not rest on its achievements as it is moving from street to street, market to market and shop to shop, introducing its array of products to consumers.

He said as a company in the fast-moving consumer goods sector, the management team has developed plans and strategies to capture more share in chosen markets and will gradually deploy them in the coming months.

National Salt Company of Nigeria (NASCON) was established as a salt refinery, Ijoko, Ogun State in 1973, in a joint venture between the Federal Military Government of Nigeria and Atlantic Salt & Chemical Inc. of Los Angeles, California, United States.

The company was privatised in 1991 with its shares listed on the Nigerian Exchange in October 1992, through which Dangote Industries Limited purchased majority shares. Following the reverse takeover of NASCON by Dangote Salt Limited (DSL) in 2007, NASCON acquired the assets, liabilities and business undertakings of DSL.

Principal activities of the company include processing of raw salt into refined, edible and industrial salt. NASCON is also into the production of seasoning and vegetable oil.

Valency Agro Nigeria Limited has opened application list for subscription to a new commercial paper issuance under which the agribusiness firm is seeking to raise up to N5 billion.

Under the N5 billion Series 9 Commercial Papers (CP) issuance, Valency Agro is offering 269-day CPs at discount rate of 12.69 per cent and implied yield of 14 per cent. Minimum subscription is N5 million while the application list closes today.

Valency Agro Nigeria is a subsidiary of Valency International Pte Limited – an international commodity trading house with presence in over 15 countries – that deals in the sourcing, production, and trading of agro and consumer food products.

The net proceeds from the CPs would be used by the company for its short-term financing requirements.

Valency trades in portfolios of products that are classified as agro and consumer goods, Sulphur and fertiliser, steel and scrap, and other commodities.

The company was established as a commodity trading company in 2007 with headquarters in Singapore and has become a prominent integrated supply chain manager across Africa and Asia.

Through an already established extensive global reach, the company has developed excellent sourcing networks directly with farm gate suppliers and manufacturing processors while also nurturing strong local and international relationships worldwide.

Valency has also expanded its presence across the value chain with operations in logistics, warehousing and through its own processing facilities.

The company has a deep manufacturing and processing presence and also has the largest cashew processing plant in Ogun State, Nigeria. It has raw cashew procurement and drying centres in Lagos, Ibafo, Ogbomosho, Kano, Anyigba and Ankpa. It also has sesame cleaning facilities in Kano, Lagos and the Middle Belt, as well as cocoa drying machines in its centre at Ogun state.