The Nation Newspaper

Category: Equities

  • Ecobank rebounds with N88.3b profit in 2017

    Ecobank Transnational Incorporated (ETI) Plc- the bank holding parent company of the Ecobank Group, witnessed a major turnaround in 2017 as it rebounded from a loss of N33.7 billion in 2016 to close 2017 with a pre-tax profit of N88.3 billion.

    Key extracts of the audited report and accounts of ETI for the year ended December 31, 2017 showed improvements in the bottom-line performance of the company, in both Naira and Dollars terms. Nigeria accounts for the larger part of the operations of the Ecobank Group. ETI is listed on three West African stock exchanges including Bourse Régionale des Valeurs Mobilières (BRVM) in Abidjan, Ghana Stock Exchange in Accra and Nigerian Stock Exchange in Lagos.

    The report showed that gross earnings rose by 15 per cent from N655 billion in 2016 to N763.6 billion in 2017. Profit before tax recovered to N88.3 billion in 2017 as against loss before tax of N33.7 billion in 2016. Net profit also stood at N70 billion in 2017 compared with a net loss of N52.6 billion. Earnings per share thus improved from a loss of N2.59 in 2016 to positive earnings of N2.22 in 2017.

    Balance sheet analysis showed that total assets rose from N6.256 trillion in 2016 to N6.864 trillion in 2017. Loans to customers improved marginally from N2.82 trillion to N2.86 trillion. Customers’ deposits also increased by 13 per cent to N4.65 trillion in 2017 as against N4.12 trillion in 2016. Total equity grew by 24 per cent from N538 billion in 2016 to N665 billion in 2017.

    Group Chief Executive Officer, Ecobank Transnational Incorporated (ETI) Plc, Mr Ade Ayeyemi, said the 2017 financial performance was an encouraging improvement on 2016 as all actions to improve the company’s efficiency were productive.

    According to him, customers also showed their confidence in the company’s value proposition by giving it more of their deposits, which grew by 13 per cent.

    He noted that the progressive moves to right-size and simplify the company’s businesses were designed to allow it to serve its customers better and create more sustainable value generation.

    “2017 also marked two years into our five-year ‘Roadmap to Leadership’ and digitisation strategy through which we have made real strides in fixing the foundations on which our businesses can grow. Among other things, we have reorganised our businesses, overhauled our risk management, improved our controls and systems, adopted technology to drive efficiency, and we are addressing capital allocation. In 2018 and beyond our focus will be on one thing: relentless execution. We will use all our resources to support our mission to serve our customers better, run our businesses more efficiently, and generate returns that meet and exceed the cost of equity,” Ayeyemi said.

     

  • CWG warns of declining earnings

    The board of directors of CWG Plc yesterday alerted the investing public that the technological company has suffered decline in performance and its earnings may significantly lower than the previous reports.

    In a profit-warning released yesterday at the Nigerian Stock Exchange (NSE), the board of the company stated that preliminary review of annual report and accounts for the year ended December 31, 2017 showed that estimated earnings and year-end financial projections “will be materially lower in comparison to prior year financials”.

    “The reduction in earnings is predominantly a result of losses incurred due to the financial cost implications of non-actualised projects which have adversely affected the company’s estimated earnings and year end projections,” the company stated.

    The company however assured that its profit margin has continued to remain stable , despite the decline in earnings.

    CWG Plc, formerly Computer Warehouse Group, had reversed a pre-tax loss of N1.75 billion in 2015 to profit of N142 million in 2016. Highlights of the audited report and accounts of CWG Plc for the year ended December 31, 2016 had shown that the information and communication technology company witnessed considerable improvement in its underlying profitability.

    In spite of the macroeconomic challenges that constrained turnover, cost optimization strategies adopted by the management significantly reduced costs across the parameters, providing the headroom for the company to override 34.8 per cent decline in sales and pushed back from a loss position in 2015 to a profit position in 2016. The report showed that while turnover dropped by 34.8 per cent from N15.61 billion in 2015 to N10.17 billion in 2016, the management optimized cost of sales by reducing it by 41.6 per cent from N13.17 billion in 2015 to N7.69 billion in 2016. Gross profit thus rose from N2.44 billion in 2015 to N2.47 billion in 2016.

  • Dangote Cement declares N179b dividend

    Shareholders of Dangote Cement Plc will receive N178.9 billion as cash dividend for the 2017 business year as the cement company drew on increased sales and margins to grow net profit by 43 per cent to N204.25 billion.

    The board of directors of the cement company yesterday indicated that shareholders will receive a dividend per share of N10.50, representing an increase of 23.5 per cent on a dividend per share of N8.50 paid for the 2016 business year.

    Key extracts of the audited report and accounts for the year ended December 31, 2017 showed that the group turnover grew by 31 per cent from N615.1 billion in 2016 to N805.6 billion in 2017. Profit before tax increased from N180.93 billion in 2016 to N289.59 billion in 2017. Profit after tax rose from N142.86 billion in 2016 to N204.25 billion in 2017. Earnings per share consequently improved to N11.65 in 2017 compared with N8.78 in 2016.

    The report indicated that while sales from the three plants in Nigeria contributed N552.36 billion to the group’s revenue, the balance of N258.44 billion was accounted for by plants in other African countries. Revenue attributable to Nigeria grew by 29.6 per cent while that from Pan-African operations rose by 32.5 per cent.

    Though group sales volumes were lower by seven percent due to depressed Nigerian market, Pan-African sales volumes went up by 8.4 per cent to 9.4 metric tonnes with strong volume increases in Senegal, Ethiopia and Cameroon and new capacities of 1.5 metric tonnes in Congo and 0.5 metric tonnes in Sierra Leone.

    Acting Group Chief Executive Officer, Dangote Cement Plc, Joseph Makoju, said the company’s performance demonstrated the robust diversification of its business.

    “We expanded our footprint from eight countries to ten with the opening of new facilities in the Republic of Congo and Sierra Leone, while our operations in Cameroon, Senegal and Ethiopia achieved strong sales growth during the year. With total sales volumes of nearly 22 million tonnes, we are by far the leading manufacturer of cement in Sub-Saharan Africa,” Makoju said.

  • Cadbury Nigeria bounces back to profit

    Cadbury Nigeria Plc appeared to have weathered the storm of its recent losing streak as the company witnessed a turnaround in 2017. Cadbury Nigeria rode on the back of improved sales and reduced sales and administrative expenses to post a pre-tax profit of N350 million in 2017 as against a loss of N562 million in 2016.

    Key extracts of the audited report and accounts of Cadbury Nigeria for the year ended December 31, 2017 released yesterday at the Nigerian Stock Exchange (NSE) showed that sales rose from N29.98 billion in 2016 to N33.08 billion in 2017. Gross profit increased from N6.86 billion to N7.44 billion. Selling and distribution expenses reduced from N5.6 billion in 2016 to N5.23 billion in 2017 while administrative expenses improved considerably from N2.07 billion in 2016 to N1.59 billion in 2017.

    With these, the company posted a positive operating profit of N711.37 million in 2017 compared with operating loss of N732.85 million in 2016. The company however came under finance pressure as interest expense jumped from N17.8 million in 2016 to N545 million in 2017. After taxes, net profit stood at N299 million in 2017 as against net loss after tax of N296 million in 2016.

    The board of directors of the company has recommended distribution of N305 million as cash dividend to shareholders, representing a dividend per share of 16 kobo.

    Director, Corporate and Government Affairs, Cadbury West Africa, Bala Yesufu attributed the turnaround to the studious implementation of the company’s restructuring programme.

    “We have been working assiduously over the years to turnaround our loss situation. We are happy to announce that we finally realized our vision to reposition Cadbury for improved performance, in 2017,” Yesufu said.

    Cordros Capital described the results as “better than expected” noting that Cadbury Nigeria surpassed estimates for the fourth quarter.

    “We believe Cadbury Nigeria’s revenue growth in fourth quarter 2017 was largely volume-driven, as opposed to fourth quarter 2016 which was majorly on prices,” Cordros Capital stated.

    Mondelçz International, a global snacks powerhouse that holds 74.97 per cent equity stake in Cadbury Nigeria had in 2017 drafted its director of the innovation kids wholesome segment of its global biscuits business based in East Hanover, United States of America, Mr. Muhammad Amir Shamsi, to take over the leadership of the Nigerian subsidiary. Shamsi resumed on February 1, 2017.

    Shamsi was mandated to drive critical performance measures that could see Cadbury Nigeria regaining its declining market share. Shamsi, an experienced hand in West Africa, was the group’s marketing director for West Africa between October 2013 and March 2016. He had earlier served as head of new categories and Gum and Candy in West Africa between September 2012 and September 2013. He joined Mondelçz International in June 2009.

  • GSK Nigeria to pay N8.97b special dividend to shareholders

    GlaxoSmithKline Consumer Nigeria (GSK) Plc will distribute a total of N8.97 billion as dividend to shareholders for the 2017 business year.

    The board of directors of GSK yesterday indicated that it has approved the payment of N8.49 billion as special dividend and N478.4 million as ordinary dividend, bringing total payout for the 2017 business year to N8.97 billion.

    A breakdown of the dividend recommendation showed that shareholders will receive a special dividend per share of N7.10 and ordinary dividend per share of 40 kobo, implying a total dividend per share of N7.50.

    The dividend recommendation as well as the audited report and accounts of the healthcare company were approved by the directors of the company at their meeting at the weekend. The dividend will be paid on May 25, 2018, a day after the annual general meeting in Lagos.

    GSK has recently been distributing its surplus capital as special dividend to shareholders after it concluded sales of segment of its business to other investors. GSK had in 2016 concluded a N22.6 billion divestment of its drinks business to the Japanese group, Suntory Beverage and Food Limited (SBF).

    GSK Nigeria transferred the ownership to Suntory Beverage & Food Nigeria Limited, a subsidiary of the SBF, on October 1, 2016. GSK Nigeria’s drinks business included the two iconic brands-Lucozade and Ribena. The sale included the company’s business of manufacturing, bottling, marketing, distributing and selling of the Ribena and Lucozade brands in Nigeria and all assets attached to or deployed in connection with the business.

    Following intense negotiations on May 31, 2016, GSK Nigeria and Suntory had agreed to the terms of the proposed sale of the drinks business for a headline price of $79.2 million. Suntory Beverage & Food Nigeria Limited is a subsidiary of the Japanese group, Suntory Beverage and Food Limited (SBF), a leading soft drinks company with total sales of £6.6 billion.

    After the conclusion of the divestment deal, GSK Nigeria had in 2016 paid a special dividend of N716 million to shareholders, representing 60 kobo per share.

    Now, the retained business of GSK Nigeria would be its consumer healthcare wellness, oral healthcare, nutrition and pharmaceutical and vaccines businesses.

  • Equities lose N506b amid global downtrend

    The Nigerian equities market was dominated by considerable sell-offs last week as major corporate earnings failed to stimulate the market.

    Benchmark indices at the Nigerian Stock Exchange (NSE) showed average week-on-week decline of 2.85 per cent while aggregate market value of all quoted equities dropped by N506 billion.

    The decline in overall market capitalisation was partly due to the delisting of Seven-Up Bottling Company during the week. Adjusted for the delisting, net capital depreciation last week stood at N441.98 billion.

    With more than two losers for every gainer, the release of corporate earnings reports by Nigeria’s two largest banks – Guaranty Trust Bank and Zenith Bank Plc and other reports by large-cap stocks such as Stanbic IBTC Holdings and Nascon Allied Industries failed to excite investors.

    Aggregate market value of all quoted equities dropped from the week’s opening value of N15.508 trillion to close the week at N15.002 trillion. The All Share Index (ASI)-the main value-based index that tracks price changes at the NSE declined from the week’s index-on-board of 43,167.86 points to close weekend at 41,935.93 points. The sustained decline depressed the average year-to-date return to a single digit of 9.66 per cent.

    All sectoral indices and group stock trackers closed in the red with the exception of the NSE Insurance Index, which rose marginally by 0.25 per cent. The NSE 30 Index-which tracks the 30 most capitalised companies, posted a negative week-on-week return of -3.41 per cent. The NSE Banking Index recorded the worst performance with a drop of 8.35 per cent. The NSE Corporate Governance Index declined by 4.26 per cent. The NSE Consumer Goods Index dropped by 1.59 per cent. The NSE Oil and Gas Index dipped by 1.64 per cent while the NSE Industrial Goods Index slipped by 0.24 per cent.

    The performance of the Nigerian equities market broadly reflected the global downtrend at the equities market. United States of America’s benchmark S & P 500 Index dropped by 1.4 per cent. United Kingdom’s FTSE ASI declined by 1.1 per cent. France’s CAC 40 Index slipped by 0.2 per cent. Russia’s RTS Index dropped by 3.9 per cent. China’s Shanghai Composite Index indicated average loss of 1.1 per cent while South Africa’s FTSE ASI dropped by 1.8 per cent.

    Total turnover at the Nigerian equities market stood at 2.444 billion shares worth N36.665 billion in 26,712 deals as against a total of 3.079 billion shares valued at N39.990 billion traded in 23,086 deals two weeks ago. The financial services sector led the activity chart with 2.044 billion shares valued at N26.330 billion traded in 16,788 deals; thus contributing 83.61 per cent and 71.81 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 168.973 million shares worth N8.111 billion in 4,927 deals. The third place was occupied by oil and gas sector with a turnover of 94.742 million shares worth N825.871 million in 1,641 deals.

    Banks dominated the top activities chart with the trio of FBN Holdings Plc, Zenith International Bank Plc and Fidelity Bank Plc emerging the most active stocks with total turnover of 1.084 billion shares worth N17.852 billion in 7,074 deals, contributing 44.34 per cent and 48.69 per cent to the total equity turnover volume and value respectively.

    Also traded during the week were a total of 1.889 million units of Exchange Traded Products (ETPs) valued at N10.512 million in four deals, compared with a total of 50,547 units valued at N4.593 million traded in 12 deals in the previous week.

    In the Federal Government debt segment, a total of 40,566 units of Federal Government bonds valued at N44.313 million were traded last week in 29 deals compared with a total of 6,574 units valued at N6.332 million traded in 31 deals two weeks ago.

    Pricing trend analysis showed that there were 25 gainers against 60 losers last week as against 45 gainers and 40 losers recorded in the previous week. Japaul Oil & Maritime Services, which had led the rally in recent weeks, topped the losers’ list, in percentage terms, with a drop of 30.9 per cent to close at 67 kobo. Fidelity Bank followed with a drop of 22.5 per cent to close at N2.31 while Unity Bank declined by 21.5 per cent to close at N1.35 per share.

    On the positive side, Associated Bus Company recorded the highest gain of 14.3 per cent to close at 48 kobo. John Holt followed with a gain of 12.5 per cent to close at 54 kobo while NEM Insurance rose by 11.6 per cent to close at N2.70 per share.

     

     

  • Julius Berger declares N1.32b dividend

    Julius Berger Nigeria Plc would be distributing N1.32 billion as cash dividend to shareholders for the 2017 business year.

    The board of the leading construction company at the weekend announced that it had recommended payment of N1.32 billion to shareholders, representing a dividend per share of N1.

    Key extracts of the audited report and accounts of Julius Berger Nigeria for the year ended December 31, 2017 released at the weekend showed that while the company continued to struggle operationally, it rode on the back of increased non-operational income and financial management to return to profitability in 2017.

    Group total income increased marginally from N138.99 billion in 2016 to N141.89 billion in 2017. However, gross profit dropped from N54.23 billion to N44.3 billion. Operating profit also halved from N16.79 billion in 2017 to close 2017 at N8.69 billion.

    The company, however, recorded investment income of N1.13 billion in 2017, a major jump from N285 million recorded in 2016. Other gains also totalled N4.08 billion in 2017 as against N1.44 billion in 2016.

    With improvement in the foreign exchange management, the company witnessed significant reduction in its foreign exchange losses. With these, profit before tax stood at N3.74 billion in 2017 as against pre-tax loss of N1.5 billion in 2016. After taxes, net profit stood at N2.57 billion compared with net loss of N2.4 billion in 2016.

     

     

  • N132b new equity funds for Lafarge

    LafargeHolcim, the majority shareholder in Lafarge Africa Plc and other Nigerian shareholders, have injected N132 billion new equity funds into Lafarge Africa, rounding off the single largest recapitalisation by existing shareholders of a quoted company.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) at the weekend, Lafarge Africa indicated that it recorded 100 per cent subscription to its recent N131.65 billion rights issue.

    Lafarge Africa had last November 24, launched an offer to raise N131.65 billion through a rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share. The new shares were pre-allotted to shareholders on the basis of five new ordinary shares for every nine ordinary shares held as at the close of business on November 1, 2017. The acceptance list opened on Friday November 24, 2017 and ran till the close of business on last December 15.

    The allotment results showed that LafargeHolcim, which held the majority equity stake of 72.59 per cent in Lafarge Africa, fully picked up its rights, contributing some N96 billion to the recapitalisation. LafargeHolcim had earlier indicated it would subscribe fully to its rights under a debt-for-equities deal that will see conversion of LafargeHolcim’s dollar-based loan to equities.

    Lafarge Africa Plc Chairman, Mr. Mobolaji Balogun, has said the recapitalisation would help to reduce the group’s exposure to adverse foreign currency translation losses as experienced in 2016 following a 40 per cent depreciation of the Naira against the Dollar.

    In the third quarter which ended last September 30, Lafarge Africa’s net finance expense jumped from N7.4 billion in third quarter 2016 to N17.31 billion last year.

    Balogun noted that the decision of LafargeHolcim to convert existing loans into equity demonstrates the core investor’s continued belief in the Nigeria story, pointing out that the rights issue is the largest so far in the Nigerian capital market and the largest investment in a listed company by an investor.

     

     

  • Morison Industries’ N502.2m rights issue oversubscribed

    Morison Industries Plc has raised N502.2 million new equity funds, providing the 63-year-old healthcare company with the much-needed boost to reposition its operations.

    Morison Industries late last year floated a new capital raising for about N502.2 million in new equity funds through new share sale to existing shareholders. It offered a rights issue of 836.98 million ordinary shares of 50 Kobo each at 60 Kobo per share on the basis of 11 new ordinary shares for every two ordinary shares of 50 Kobo held as at August 25, 2017.

    GTI Securities Limited acted as the stockbroker to the supplementary share issuance while GTI Capital Limited was the issuing house. Both  are members of the GTI Group-a leading financial services group that owns the largest private trading floor in Sub Saharan Africa (SSA).

    The allotment results for the rights issue approved by the Securities and Exchange Commission (SEC) showed that the rights issue was oversubscribed by 1.12 million ordinary shares as shareholders took up their rights and demanded for additional shares. As against 836.98 million shares placed on offer, shareholders placed orders for 838.11 million ordinary shares.

    GTI Capital Chief Operating Officer, Mr. Kehinde Hassan, said the success of the rights issue has further confirmed GTI Capital’s pedigree of packaging companies to raise capital, irrespective of the macroeconomic and market conditions.

    According to him, GTI Capital worked with the directors and management of Morison Industries to convince shareholders on the prospects of the 63 year old healthcare company.

    “We were able to get many shareholders to subscribe to the shares due to our extensive research on the prospects of the company. Many subscribers were also impressed by the fact that all offers that we had handled in the past usually turned into goldmines, and the facts are out there. So the trust in GTI Capital positively rubs off on the exciting prospects of a recapitalised Morison Industries,” Hassan said.

    He reiterated the commitment of GTI Capital Group to supporting the growth of indigenous economy by providing amenable debt and equity capital and other advisory services to Nigerian companies.

    He pointed out that with its international presence; GTI Capital Group is well-positioned to handle private and public fund raisings for companies in Nigeria and beyond.

    Managing Director, Morison Industries Plc, Mr. Nwabueze Oputa, said the new equity funds would be deployed to improve working capital and finance the restructuring of the company.

    He noted that with the new equity funds, shareholders can be well assured of a new era of growth for Morison Industries adding that the directors of the company will work with all stakeholders to achieve its growth targets.

    Oputa commended the professionalism of GTI Capital in concluding the rights issue successfully and as scheduled, pointing out that GTI Capital has reinforced his confidence in the capabilities of Nigerian capital market operators.

    Morison Industries was incorporated in Nigeria in June 1955. Morison Industries is engaged in the production and marketing of pharmaceuticals, hygiene products and the importation and distribution of medical, surgical and hospital equipment, instruments and consumables. The company also provides its production facilities to third party for contract manufacturing arrangements.

  • Equities record marginal recovery

    After initial loss of N105 billion that started the week, Nigerian equities recovered yesterday with a marginal gain of N6 billion. With more losers than gainers, considerable rally within the high-cap stocks boosted the overall market position.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) rose from its opening value of N15.403 trillion to close at N15.409 trillion. The All Share Index (ASI) rose by 0.04 per cent to close at 43,073.45 points as against 43,056.51 points recorded on Monday. The average year-to-date return inched up to 12.63 per cent.

    The positive overall market position was driven mainly by gains recorded by large-cap stocks such as Dangote Cement, Cadbury Nigeria, Flour Mills of Nigeria, Guinness Nigeria and Nestle Nigeria.

    Most sectoral indices closed on the upside. The NSE Insurance Index rose by 1.3 per cent. The NSE Oil & Gas Index appreciated by 0.9 per cent while the NSE Industrial Goods Index inched up by 0.7 per cent. However, the NSE Banking Index declined by 0.8 per cent while the NSE Consumer Goods Index dipped by 0.4 per cent.

    Total turnover stood at 407.9 million shares valued at N6 billion in 5,247 deals. Zenith Bank was the most active stock with a turnover of 70.26 million shares valued at N2.19 billion. FBN Holdings followed with a turnover of 53.02 million shares worth N605.31 million while AXA Mansard Insurance placed third with 50.36million shares valued at N137.48 million.

    There were 26 gainers to 39 losers. Nestle Nigeria was the highest gainer with a gain of N20 to close at N1,400. 11, formerly Mobil Oil Nigeria, rose by N8.70 to close at N183.70 while Dangote Cement added N3.40 to close at N268.40.

    Unilever Nigeria led the losers with a drop of N3 to close at N57.80. GlaxoSmithKline Consumer Nigeria lost N1.10 to close at N20.90 while Dangote Sugar Refinery dropped by N1.05 to close at N22.30 per share.

    “Although performance was largely flattish, we expect investors’ reactions to full-year 2017 earnings to drive market performance in the near term,” Afrinvest Securities stated.