The Nation Newspaper

Category: Equities

  • Seplat targets gas to cushion flagging oil revenue

    Seplat Petroleum Development Company Plc is focusing on growing its gas business to boost performance and moderate the impact of flagging crude oil production and falling revenue.

    At a media interactive session after the annual general meeting yesterday in Lagos, chairman, Seplat Petroleum Development Company Plc, Dr. Ambrosie Orjiako, told shareholders that the company has stepped up investments in its gas production business to mitigate the adverse effect of the decline in the price of the crude oil in the international market.

    According to him, the company had in mid-year 2015 successfully completed and commissioned its Oben gas plant phase I expansion, which saw the company’s overall gross processing capacity double to 300 MMscfd.

    He said the Oben gas plant phase II expansion is underway with additional processing modules ordered noting that once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525 MMscfd.

    “Alongside the significant increase in gas production, the positive financial impact of Seplat’s gas business was evident as revenues from gas sales increased 185 per cent year-on-year to $77 million,” Orjiako said.

    In his remarks, chief executive officer, Seplat Petroleum Development Company, Mr. Austin Avuru, added that the company has taken its gas business across a transformation threshold with further expansion still to come.

    He explained that the company had acted quickly and decisively in response to weak oil price environment by adjusting its work programme and cost structures.

    While acknowledging that the company’s 2016 full year production expectation has been impacted by the current shut-in of the Forcados terminal, Avuru said the company is in a much better position to withstand such interruption than in previous years.

    “Our gas business takes on additional importance by providing a continuing revenue stream that is de-linked from the oil price and our enlarged portfolio offers us the scope for greater diversification. Our strong focus remains on protecting the business and managing value through effective cost reduction, optimising operations, deleveraging and strengthening the balance sheet as this will position the company to take advantage of opportunities following the current downturn,” Avuru said.

  • Skye Bank rewards promo winners

    Skye Bank rewards promo winners

    Skye Bank Plc has produced new set of millionaires at the 11th edition of the ‘Reach for the Skye Millionaire’ re-ward scheme.

    Daniel Edem of Adeniran Ogunsanya Branch in Lagos emerged a millionaire at the bank’s Reach for the Skye Millionaire promo held at the Oba Main Market in the historical city of Akure, Ondo State.

    Edem, who was contacted via voice call was full of praises for Skye Bank and its Management. He was not in any way surprised as according to him “ I am happy that eventually my loyalty to Skye Bank paid off handsomely. This is because I have been faithful to Skye Bank for over 20 years , I keep all my accounts with them and in no time have they disappointed me and to crown it , they are rewarding me with  the sum of N1 million. Common, it can only be Skye Bank,” he enthused.

    The bank’s Group Head, Retail Banking, Nkolika Okoli said: “There is still a chance for our people in Akure to win this ‘awoof’ because another set of millionaires will soon emerge  next month at the 12th edition.

    To join the lucky millionaire club, all you need to do is open a Skye Save plus or Skye Ease savings Account and make a minimum deposit of two thousand naira into the account. If you already have a Skye Save Plus or Skye Ease account, with additional deposit of N2, 000 minimum you stand a chance of becoming our next millionaire.”

  • May & Baker outlines new strategic plan to sustain growth

    May & Baker outlines new strategic plan to sustain growth

    • Shareholders applaud 20% dividend increase

    May & Baker Nigeria Plc plans to expand into new business areas as it seeks new opportunities that will add value to its performance while sustaining the growth of existing businesses and investments.

    At the annual general meeting at Muson Centre, Onikan, Lagos yesterday, chairman, May & Baker Nigeria Plc, Lt. Gen. Theophilus Danjuma (rtd), told shareholders that the company was set to break new grounds and enhance the value of their investments.

    According to him, with its existing businesses showing resilience and the continuing operational efficiency of its World Health Organisation (WHO)-certified pharmaceutical complex in Ota, Ogun State, May & Baker is shifting focus to acquire new competences and expand its business into new profitable ventures.

    “In the years ahead, our plan is to acquire necessary competences in new business areas and seek opportunities that will add value to our investments. At the same time we shall continue to leverage our installed capacity at the pharmaceutical facility in Ota, energise the food and beverages businesses by promoting existing brands and introducing new ones.  May & Baker has a great pedigree but the future is even more alluring as we make new strides and break new grounds,” Danjuma said.

    He explained that the company had delayed its capital raising in order not only to extract the greatest value for the existing shareholders that had toiled to build the company but also to ensure that new equity investments are in line with the strategic vision of future expansion and technical competences. It should be recalled that shareholders had in 2014 empowered the company to raise N3.2 billion new equity capital.

    He said the board had in the interest of all the shareholders decided not just to go for financial investments, but more importantly to look for investors that can, in addition, offer technology that will help the company to better leverage its Pharmacentre investment.

    “This way we shall secure both funding and technology competencies to delve into new areas,” Danjuma said.

    He said the company has restarted discussions with the President Muhammadu Buhari government on the joint venture business for local vaccine production and the signals from the discussions indicate that government is positive on the local production and the revised joint venture agreement will soon be ratified by the Federal Executive Council.

    “We have absolute confidence in this project and that explains why we have not given up on it through these many years of delay. The need to produce vaccine in Nigeria has become even more imperative because the major foreign donor agency for vaccine, Global Alliance for Vaccines and Immunizations (GAVI) has indicated its desire to withdraw sponsorship by 2022. This leaves local vaccine production as the only sustainable avenue to keep our population secure from immunizable diseases,” Danjuma said.

    He noted that the performance of the company in 2015, in spite of the challenges in the economy, showed that it has continued to be resilient and focused on creating values for shareholders.

    The audited financial statement shows that sales grew by 7.8 per cent while increased cost efficiency and internal control boosted pre-tax profit by 41 per cent.  Turnover rose from N7.02 billion in 2014 to N7.57 billion in 2015. Operating expenses reduced by 11 per cent, while distribution, sales and marketing expenses remained flat at 2014 level.   Administrative expenses also reduced by 8.4 per cent from N641.33 million in 2014 to N587.3 million in 2015. Finance charges which has remained a major headache of the company is gradually also being contained. Cost of funding the business was thus reduced by 2.6 per cent from N603.87 million in 2014 to N588.18 in 2015. With this level of operational efficiency, profit before tax grew from N101.2 million in 2014 to N142.4 million in 2015. However, due to significant increase in  total tax burden to N74 million,  the  growth in after tax profit  was slowed to  7.41 per cent,  from N63.34 million in 2014  to N68.03 million in 2015.

  • Berger Paints promises growth as forex scarcity reduces Q1 profits

    Berger Paints promises growth as forex scarcity reduces Q1 profits

    Berger Paints Nigeria Plc has promised their shareholders improved returns on their investments by the end of the year despite the drop in their financial performance for the first quarter (Q1) ended March 31, 2016 to foreign exchange scarcity (FX).

    The Premier paints company in Nigeria said it is hopeful of increased profitability by leveraging on its soon to be commissioned first automated paint manufacturing plant in Sub-Sahara Africa that would reduce production costs, reduce response times, improve their product quality and make them compete favourably with imported brands.

    The Managing Director and Chief Executive Officer, Berger Paints, Mr. Peter Folikwe disclosed this to stockbrokers at the presentations of the company’s facts behind the figures on the floor of Nigerian Stock Exchange in Lagos.

    Folikwe said though revenue increased by Eight per cent (N54m) from N706 Million in Q1 2015 to N760 Million in Q1 2016, Operating Profit fell 72 per cent (N79m) from N109 million in Q1 2015 to N31 million in Q1 2016.

    He said the decline was as a result of; “margin drop largely as a result of increase in raw material prices, scarcity of foreign exchange as we have to largely resort to local sourcing of raw materials at exorbitant price and the general lull in economic activities due to the delay in passage of 2016 budget”.

    For the second quarter 2016 financial forecast, he said they are targeting N1.014 billion revenue and profit after tax of N111 million.

    The Chairman,Berger Paints, Dr Oladimeji Alo said despite the first quarter result, the company intends to reclaim its first position in the market through aggressive drive and investments in their leading brands, increase in  marketing activities to gain visibility and renewed evolvement of their route to market capabilities to drive aggressive sales.

  • FBN Holdings optimistic of improved performance

    FBN Holdings optimistic of improved performance

    FBN Holdings Plc will drive down cost, improve operating effi-ciency and focus on disciplined growth that ensures improved returns to shareholders as the financial services group moves to harness synergies from its businesses and enhance its long-term prospects.

    Directors of FBN Holdings gave this assurance yesterday at the annual general meeting of the group held at Eko Hotel & Suites, Victoria Island, Lagos.

    Group chairman, FBN Holdings Plc, Dr. Oba Otudeko, said notwithstanding the expected near-term outlook of moderated demand and stiffer, more intense competition in the financial services sector, FBN Holdings would ride on the back of its sound corporate governance structures, resilient business model and continued growth momentum in its strategic businesses to continue to guarantee growth in 2016 and beyond.

    He outlined that as the group move to its next phase of its efficient growth, the board is positive that the group will achieve its growth aspirations by a sustained, sharp focus on its strategic priorities.

    “Operating efficiency will remain at the heart of our decisions, to ensure that our disciplined growth meets the strictest hurdles of shareholder returns. In 2016, we will not lose sight of our priority to be a strong and financially stable group that offers a one-stop financial supermarket and puts customer at the heart of everything we do,” Otudeko said.

    According to him, the group’s integrated approach of providing diverse financial services-commercial banking, insurance, merchant banking and asset management, within one group, differentiates it from the competition.

    “Notwithstanding the current economic climate, the board remains extremely confident that the strong fundamentals of our organisation are more than adequate to ride us through the current market challenges. We will continue to focus on effective execution of our strategy and on delivering value to shareholders,” Otudeko said.

    Group managing director, FBN Holdings Plc, Mr Uk Eke, acknowledged what he described as market skepticism on the ability of the group to confront the challenges confronting it but assured that the group has started taken bold moves to address the challenges and the impact will soon be visible within the next six to 12 months.

  • Investors face N18b loss as NSE delists eight companies

    nvestors in eight companies delisted last week by the Nigerian Stock Exchange (NSE) stand to lose about N18 billion as the delisting closed the regular window to unlock the values of their shareholdings.

    In a mass weeding that cut across many sectors, the NSE delisted eight companies including IPWA Plc, G.  Cappa Plc, West African Glass Industries Plc (WAGI), Investment & Allied Insurance Plc, ALUMACO Plc, Jos International Breweries Plc, Adswitch Plc and Rokanna Plc.

    The companies, valued at N17.8 billion, were delisted under the compulsory delisting mechanism of the Exchange. While the delisted companies could seek direct and indirect trading of their shares on the over-the-counter (OTC) market, NASD, the nascent OTC market lacks the comparative liquidity and regularity of the NSE.

    The Nation’s check indicated that at the point of delisting IPWA Plc was valued at N257.07 million; G.  Cappa Plc, N1.81 billion; West African Glass Industries Plc (WAGI), N131.43 million; Investment & Allied Insurance Plc, N14 billion; ALUMACO Plc, N557.20 million; Jos International Breweries Plc, N809.28 million; Adswitch Plc, N203.76 million while Rokanna Plc was valued at N30 million.

    It was exclusively reported by The Nation that quotation committee of the council of the NSE, which presides over listing and delisting, had approved the delisting of the companies.

    It was further reported that the national council of the NSE has approved the delisting of 17 companies. A total of 18 companies have been slated for delisting including 17 companies that have been earmarked for compulsory delisting and a company that had opted for voluntary delisting over its inability to comply with listing requirements.

    The Nation’s check had indicated that the delisting will shave of more than N33 billion from the market capitalisation of the Exchange, implying direct loss of similar value to investors who may not be able to unlock such value in the absence of a regular stock exchange.

    With the delisting, other companies on final delisting process included Navitus Energy Plc, formerly Union Ventures & Petroleum Plc; International Energy Insurance, Costain (West Africa) Plc, Lennards (Nigeria) Plc, Deap Capital Management & Trust Plc, Evans Medical Plc, P.S Mandrides & Company Plc, Nigerian Ropes Plc and Premier Breweries Plc.

     

  • ‘Corporate governance key to good performance’

    ‘Corporate governance key to good performance’

    Managing Director, FBN Merchant Bank Limited, Mr. Kayode Akinkugbe, has underscored the importance of sound corporate governance as a cornerstone for good and sustainable corporate performance in the banking sector.

    He said sound corporate governance must go beyond compliance and check-lists; it must become a way of life and all stakeholders have the duty to ensure that sound corporate governance permeates the length and breadth of Nigerian banks.

    Akinkugbe, who delivered a keynote speech at the monthly meeting of the Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN), noted that the principles of corporate governance must form the basic framework for ensuring that stakeholders are able to enjoy long term benefits and value from banks.

    He added that sound corporate governance also serves as strong pillars that ensure overall market confidence in institutions.

    According to him, the institution of corporate governance, backed by legislative, economic and financial reforms intended to promote transparency, accountability and the rule of law in the economic life of the country, are critical in assuring the banking public retains trust and confidence in such essential of bodies.

    He pointed out that good corporate governance not only ensures compliance with legal and ethical standards, but helps in building the strength of financial institutions within an economy.

    He noted that in recent years, corporate governance has attracted considerable interest, particularly following the global financial crisis and other corporate scandals, which have led to the promulgation of rules and directives aimed at creating strong internal systems and controls that are comparable for financial institutions across the globe.

    “We are proud to be part of a larger Group, FBN Holdings Plc,  which has a strong heritage of promoting corporate governance practices that have resulted into over 120 years of uninterrupted service and continued growth,” Akinkugbe said.

    He restated the commitment of FBN Merchant Bank towards maintaining a strong posture on sound practices.

    He urged all chief compliance officers to engage, review and update policies and procedures to meet evolving business needs, and ensure familiarisation amongst all stakeholders, noting that this is critical to ensuring that the goal of running sustainable banking institutions is achieved.

  • UBA leads as equities rally N214b gain

    UBA leads as equities rally N214b gain

    United Bank for Africa (UBA) Plc jumped to the front of the counter at the stock market as quoted equities sustained their upswing with a gain of N214 billion last week. In a tight market with nearly one gainer to every loser, significant rally in the banking sector led by UBA boosted the overall market position.

    Benchmark indices at the Nigerian Stock Exchange (NSE) indicated a week-on-week gain of 2.55 per cent. The NSE Banking Index recorded average return of 6.60 per cent, with UBA leading the charge with a gain of about 22.6 per cent.

    The All Share Index (ASI)-the value-based index that serves as sovereign index for the Nigerian equities market, crossed another level to close at 27,116.45 points as against its week’s opening index of 26,441.03 points, representing an increase of 2.55 per cent.

    Aggregate market value of all quoted companies rose from the week’s opening value of N9.099 trillion to close at N9.313 trillion, showing an increase of N214 billion or 2.36 per cent. The difference between the ASI and total market capitalisation was due to the delisting of eight companies during the week.

    There were 35 gainers to 37 losers last week as against 54 gainers against 17 losers recorded in the previous week. A total of 109 equities closed flat last week compared with 118 equities that closed unchanged in the previous week.

    UBA led the gainers with a gain of 22.59 per cent to close at N4.45 per share. Conoil followed with a gain of 20.67 per cent to close at N23. Oando rallied 13.42 per cent to close at N6. Trans Nationwide Express rose by 12.71 per cent to close at N1.33 while Access Bank appreciated by 10.77 per cent to close at N5.35.

    Turnover also showed improved investors’ appetite as investors scrambled for undervalued bargain stocks. Total turnover stood at 2.45 billion shares worth N13.145 billion in 23,680 deals last week as against a total of 1.83 billion shares valued at N14.47 billion traded in 20,058 deals two weeks ago. The financial services sector led the activity chart with a turnover of 2.01 billion shares valued at N9.49 billion in 14,200 deals; representing 82.3 per cent of the total equity turnover volume. Conglomerates sector followed with 208.48 million shares worth N268.05 million in 1,134 deals. The oil and gas sector placed third with a turnover of 80.27 million shares worth N692.61 million in 2,826 deals.

    The trio of Wema Bank Plc, Zenith International Bank Plc and Access Bank Plc were the most active with the three stocks jointly accounting for 871.33 million shares worth N5.30 billion in 3,956 deals, representing 35.6 per cent of the total equity turnover volume.

    Also, a total of 307,411 units of Exchange Traded Products (ETPs) valued at N21.406 million were traded in 38 deals last week compared with a total of 382,448 units valued at N10.288 million traded in 43 deals two weeks ago.

    In the bond market, a total of 4,143 units of Federal Government Bonds valued at N4.248 million were traded in eight deals as against a total of 8,033 units of Federal Government valued at N8.923 million traded in six deals in the previous week.

    On the downside, Vitafoam Nigeria recorded the highest loss of 20.85 per cent to close at N4.29. Tiger Branded Consumer Goods followed with a drop of 19.87 per cent to close at N4.80. NCR dropped by 14.14 per cent to close at N8.99. Unilever Nigeria declined by 13.89 per cent to close at N31 while Ikeja Hotel depreciated by 13.88 per cent to close at N2.11 per share.

    “As positive sentiments have thrived in the market on account of government reforms which have been implemented, investors now look forward to the outcome from the deliberations at the Monetary Policy Committee (MPC) meeting in the coming week and this is expected to drive market performance,” Afrinvest Securities, a Lagos-based dealer at the NSE, stated in a weekend note on the outlook of the market this week.

    The MPC is expected to begin a two-day meeting today to review global and economic developments within the last two months and the impact on the Nigerian economy.

    Analysts at Afrinvest Securities stated that while predicting the actual line of action of the MPC appears dicey, the most probable option for the MPC may be to adjust the peg on foreign exchange rate close to the N285 per dollar rate as guided by Petroleum Products Pricing Regulatory Agency (PPPRA).

  • Govt plans N750b agric funds

    The Federal Government is discussing with some multilateral international financial institutions to create a financing pool of some N750 billion for the Nigerian agricultural sector.

    Minister of State for Agriculture, Mr. Heineken Lokpobiri, said the government is in discussions with the African Development Bank (AfDB) and Islamic Development Bank (IDB) to create a N750 billion agricultural fund that could provide amenable finance to operators in the Nigerian agricultural sector.

    According to him, access to finance has been one of the major challenges of the agricultural sector and government is working to address this and other challenges.

    He said the funds would through the Bank of Agriculture and other commercial banks lend money to farmers at a single-digit interest rate in order to boost the development of the sector.

    He said the Islamic Development Bank has indicated that it could provide $2.5 billion, about N498 billion, while AfDB has also shown interest in financing the sector. Nigeria’s former Minister of Agriculture, Dr. Akinwunmi Adesina, is now AfDB president.

    Lokpobiri, who spoke at the annual poultry summit of the Poultry Association of Nigeria (PAN) in Lagos, indicated that the new funds might come at below nine per cent, noting that though there are existing funds from the Central Bank of Nigeria (CBN) that farmers can access at interest rate of nine per cent, the contention is that nine per cent is still high for agricultural businesses.

    He added that part of government’s social investment of about N93 billion in 2016 would be given to the association to boost the country’s poultry industry.

    He stressed the importance of developing the agriculture sector, noting that Nigeria is losing on both fronts by expending scarce foreign exchange on food imports and exposing itself to smuggled products with health hazards.

    In his address, President, Poultry Association of Nigeria (PAN), Dr. Ayoola Oduntan, said the poultry sub-sector deserves better attention from the government as it contributes more than 25 per cent of the Agricultural Gross Domestic Product (AGDP) with an annual turnover  in excess of N800 billion.

    He lamented that the past 16 months have been the most challenging period for the Nigerian poultry industry with the outbreak of Avian Influenza, which occurred in January 2015 and have been ravaging the industry since then.

    “We have had over 3.5 million birds officially depopulated and the farms quarantined without payment of compensation to about 80 per cent of the farmers.

  • Banking stocks sustain rally over clarity on EFCC probes

    For the second consecutive trading session, banking stocks bucked the negative overall market position at the Nigerian Stock Exchange (NSE) to close on the positive as many banks affirmed compliance with operational rules and dissociated themselves from slush political dealings.

    Amidst the sustained decline in the overall market position at the NSE in the past two trading sessions, the NSE Banking Index-which tracks the banking sector, sustained modest uptrend on the back of gains by many banks. The NSE Banking Index rose yesterday by 0.58 per cent, almost on the same level with the day-on-day gain of 0.6 per cent recorded on Tuesday.

    The All Share Index (ASI)-the value-based index that tracks prices of all quoted equities and serves as benchmark index for the Nigerian stock market, conversely dropped by 0.06 per cent yesterday, extending the downtrend that saw a decline of 0.70 per cent on Tuesday.

    The sustained rally in the banking sector came on the heels of clarifications by Sterling Bank and Access Bank that last week’s investigative visits by the Economic and Financial Crimes Commission (EFCC) were not in connection with any slush political dealings but were on normal banking transactions involving non-political clients.

    Sterling Bank’s share price remained steady on Wednesday after it rallied by 4.91 per cent on Tuesday, the eighth highest percentage gain within the five-hour trading session. Sterling Bank had filed a regulatory statement at the Exchange clarifying the recent issue involving the bank and EFCC.

    In the statement, Sterling Bank affirmed that it did not hold account for “the public officer from the previous administration to which this matter (EFCC visit to the bank) has been linked either officially or otherwise”.

    Some reports had linked last week investigative visit by the EFCC to the bank to the slush political dealings involving former Minister of Petroleum Resources, Mrs Diezani Allison-Madueke, generally known as Diezanigate. EFCC has also been investigating diversion of arms funds, otherwise known as Dasukigate, named after the former National Security Adviser, Col. Sambo Dasuki (rtd).

    Sterling Bank explained that while the reason for the visit by the EFCC was not immediately clear, it has now been confirmed that the investigation is related to the banking relationship of a non-bank financial institution that is a client of Sterling Bank Plc.

    “We affirm for the public records that the bank does not hold the account of the public officer from the previous administration to which this matter has been linked either officially or otherwise; the non-bank financial institution (asset management company) in question purchased a number of loans on a recourse basis from Sterling Bank Plc on commercially acceptable terms and this is the link of the concern raised by the EFCC to Sterling Bank Plc,” Sterling Bank stated.

    Sterling Bank assured the investing public that it has commissioned a review of the compliance procedures of its non–bank financial institution clients with the aim of strengthening this area of its operations while in the interim, the bank will not accept any new non-bank financial institution relationships.

    In a related statement, Access Bank also clarified that the EFCC visited the bank as part of ongoing investigation into a specific transaction involving a customer of the bank in the normal course of business.

    Access Bank noted that while the visit came without any form of notification or invitation, it fully cooperated with the officials of the EFCC.

    “We have observed the wide ranging speculations in the media connecting the visits of the Commission to various personalities. We would like to state emphatically for the benefit of our stakeholders that the bank has absolutely no link, interaction or relationship whatsoever with any of the personalities stated in the media reports,” Access Bank stated.

    The overall market position again closed negative yesterday. The ASI declined from 25,646.56 points to close at 25,630.52 points. Aggregate market capitalisation of all quoted equities also dropped marginally from N8.822 trillion to close at N8.820 trillion.

    However, the underlying sentiments at the stock market were largely positive with 31 gainers to 20 losers. The negative overall market position was driven largely by losses recorded by highly capitalised stocks such as Dangote Cement, Dangote Sugar Refinery, Flour Mills of Nigeria, Lafarge Africa and Ecobank Transnational Incorporated.