Category: Investors

Finance, business and economy experts have called for stronger public-private partnerships to close Africa’s infrastructure gap and speed up intra-continental and world trade.

Experts who spoke at a three-day virtual IMC Indo-Africa Summit drew lessons from India’s public-private partnership experience, which some speakers described as a good model for Africa.

Executive Director, Financial Services, Africa Finance Corporation, Sanjeev Gupta, drew attention to the need to develop bankable projects to attract the private sector.

“African governments cannot be expected, and are indeed in no position, to take early-stage project risks, although they should be. This risk arguably resides better with the private sector, to better realise commercial aspirations,” Gupta said.

He, however, noted how various fragmented systems in Africa constituted practical challenges in contrast to India, which had the benefit of being one country with one set of challenges.

Vice President, Private Sector, Infrastructure and Industrialization, African Development Bank, Solomon Quaynor, said the bank had created Africa50 as a key leader for private sector-led project preparation in Africa.

“In partnership with Africa50, we continue to innovate, including on infrastructure asset recycling opportunities, in order to attract later-stage private infrastructure investors into brownfield projects, thereby releasing capital for governments to invest in new infrastructure PPPs in their infrastructure development plans,” Quaynor said.

He said COVID-19 recovery plans should incorporate the opportunities presented by the African Continental Free Trade Area.

Chairman, IMC Chamber of Commerce and Industry, Dinesh Joshi, noted that India had shown the world how a successful PPP could be carried out in various sectors.

“India has paved the path for success,” Joshi said.

Chief Executive Officer, Larsen & Toubro Infrastructure Development, Shailesh Pathak said that India had made strong progress with digital infrastructure and narrowing the digital divide, a model he proposed for Africa.

The moderator of the panel and CEO of H-Energy Global Limited, Darshan Hiranandani, was optimistic that India and Africa would be growth leaders in the coming years, adding that there has never been a better time than now.

The greatest demand was identified across power, road and rail transport, while ICT infrastructure is on a better footing. For the Indian economy, the infrastructure sector is also a key driver, responsible for propelling the country’s overall development – including power, bridges, dams, roads, and urban infrastructure development.

The Indo-Africa Summit 2020 was organized by ABN (owners of CNBC Africa) and the India-based IMC Chamber of Commerce and Industry and explored bilateral economic and business opportunities between Sub Sahara Africa and India.

Quoted companies on the Nigerian Stock Exchange (NSE) have up till the close of business on Friday, November 6, 2020 to submit their financial statements and reports for the third quarter ended September 30, 2020.

The NSE had extended the deadline from October 30, 2020 to weekend to cushion the effect of disruptions and protests in October.

Under the extant rules at the Exchange, quoted companies are required to submit interim or quarterly report not later than 30 calendar days after the end of the relevant period. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. The deadline for the nine-month period ended September 30, 2020 was thus Friday, October 30, 2020.

Quoted companies are also required to publish the earnings reports within five business days after the date of filing, in national daily newspapers as well as the results on their corporate websites, with the web address disclosed in the newspaper publication.

Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the newspaper publication. Where the company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter.

However, general waiver is usually given in the event of general disruption to industrial activities such as strike, national crises, many public holidays and other circumstances that in the judgement of the Exchange may significantly impact the 30-day timeline given to companies to prepare and submit the quarterly report.

The Exchange stated that the extension till November 6, 2020 was due to the general disruptions to business operations caused by events relating to the recent protests around Nigeria and the measures taken by government in response.

“The Exchange is not unmindful of the hardship resulting from the current situation and that some listed companies may have suffered losses of life and property. The situation may have affected listed companies’ ability to convene and conduct board meetings. This is especially as they prepare to convene board meetings to consider and approve their unaudited financial statements (UFS) for the period ended 30 September 2020, which are due for submission on 30 October 2020,” the NSE stated.

In view of the above, the Exchange granted listed companies a seven-day grace period for the submission of the quarterly report.

By Taofik Salako, Deputy Group Business Editor

UAC of Nigeria (UACN) Plc recorded marginal growth in sales but profit before tax dropped by 51.2 per cent to N2.5 billion in the third quarter.

The interim report and accounts for the nine-month period ended September 30, 2020 showed that underlying profit before tax dropped by 52.1 per cent to N2.5 billion in third quarter 2020. The conglomerate attributed the decline to lower operating profit and 76.7 per cent drop in net finance income due to lower investment income yields compared to the previous year.

Turnover rose by 1.7 per cent to N57.8 billion supported by sales growth in the animal feeds and other edibles segment, which was considered an essential service during restrictions to movement of people and goods to curtail the spread of COVID-19.

Gross profit however, dropped marginally by 2.3 per cent N11.4 billion. The company attributed this to limited sales during the strictest phase of the lockdown between April and May, higher input costs, and distribution expenses. Adjusted for MDS, which has been re-classified as an associate, gross profit showed increase of 2.5 per cent. Adjusted gross profit margin was also 14 basis points higher in third quarter 2020 at 19.7 per cent.

Earnings before interest and taxes declined from N4.5 billion in third quarter 2019 to N2.0 billion in third quarter 2020. This was impacted by reduced sales in April and May, input cost escalation partly attributable to foreign exchange devaluation, supply chain disruptions, and rising employee costs on account of initiatives to strengthen management teams across the group.

Profit after tax from continuing operations also declined by 67 per cent from N4.4 billion in third quarter 2019 to N1.5 billion in third quarter 2020. Total profit for the period stood at N1.9 billion in 2020, a recovery from the N10.3 billion loss reported in corresponding period of 2019. Earnings per share for thus increased from loss of N2.13 in third quarter 2019 to positive earnings of 47 kobo in third quarter 2020.

The report showed that free cash flow improved considerably during the third quarter 2020 to N1.3 billion compared with negative N5.2 billion in the full-year ended December 2019. According to the company, free cash flow in third quarter 2020 was boosted by more than N4.7 billion net cash flow generated from operations driven by increased sales and improved working capital management.

Annualised return on equity (ROE) from continuing operations at the end of September 2020 was 3.5 per cent, up from negative 17.2 per cent in comparable period of 2019. Annualised return on invested capital (ROIC) however dropped from 4.3 per cent in third quarter 2019 to 2.4 per cent in third quarter 2020.

Group Managing Director, UAC of Nigeria (UACN)  Plc, Folasope Aiyesimoju said the group’s strategy of investing for growth yielded encouraging results in the third quarter with consolidated revenues, gross profit and operating profit growing 11 per cent, 20 per cent and 65 per cent respectively.

He noted that the company recorded topline growth across all its continued operations during the period.

“We are focused on strategies to mitigate the impact of a challenging foreign exchange environment and managing the recent trend of cost escalation. We expect to complete the sale of a controlling interest in UACN Property Development Company Plc to Custodian Investment Plc and are supportive of the recently announced merger between Chemical and Allied Products Plc and Portland Paints and Products Nigeria Plc,” Aiyesimoju said.

THE Nigerian Stock Exchange (NSE) has lifted suspension placed on Union Dicon Salt Plc after the company submitted relevant financial statements to the market.

The NSE had on September 1,  this year suspended Union Dicon Salt and five other companies after they failed consistently to meet extant listing rules that require quoted companies to submit their annual and quarterly financial statements within specified timelines.

In a circular, the Exchange stated that Union Dicon Salt has submitted outstanding financial statements, paving the way for the lifting of suspension placed on its shares. The lifting of suspension took effect on Monday October 19, 2020.

Listing and regulatory rules at the capital market require all quoted companies to submit their annual audited report and financial statement not later than 90 days after the end of the financial year. More than 85 per cent of quoted companies including all banks, insurers, major manufacturers, oil and gas companies and conglomerates use the Gregorian calendar year ending December 31 as their business year. Thus, the deadline for the submission was Monday, March 30, 2020.

Read Also: NSE suspends Sunu Assurances

However, with the disruptions caused by the COVID-19 pandemic, both the NSE and Securities and Exchange Commission (SEC) extended the deadline for submission of annual report and accounts by 60 days, till May 29, 2020.

The NSE had stated that Union Dicon Salt and other companies were suspended after the expiration of the “grace” period and many notifications demanding the submission of the financial statements.

The NSE had in July 2020 warned investors to be wary when dealing with shares of Union Dicon and 12 other companies after they failed to meet regulatory deadlines for the submission of their financial statements without any explanation.

The 13 companies included Aso Savings and Loans Plc, Deap Capital Management & Trust Plc, DN Tyre & Rubber Plc, FTN Cocoa Processors Plc, Goldlink Insurance Plc, International Energy Insurance Plc, Medview Airline Plc, Resort Savings & Loans Plc, Staco Insurance Plc, Standard Alliance Insurance Plc, UNIC Diversified Holdings Plc, Union Dicon Salt Plc and Union Homes Savings and Loans Plc.

“Investors are advised to trade with caution on the securities of these companies in the absence of up to date financial information on them,” the NSE stated.

Shareholders of 11Plc, formerly Mobil Oil Nigeria Plc, have approved a resolution for the voluntary delisting of the downstream oil marketing company from the Nigerian Stock Exchange.

At the Annual General Meeting (AGM) in Abuja, shareholders authorised the Board of Directors to delist the shares of the company from the main board of the NSE.

Shareholders also approved the transfer of the real estate portfolio of the oil company to a wholly owned subsidiary, 11 Hospitality Limited.

The meeting also approved distribution of N2.975 billion as cash dividend for the 2019 business year, representing a dividend per share of N8.25.

Read Also:OPEC to stabilise oil market  

NIPCO Investments Limited had in March 2017 took over the 60 per cent majority equity stake of ExxonMobil Oil Corporation in Mobil Oil Nigeria Plc in a $301 million acquisition deal.

ExxonMobil and Nipco had in October 2016 executed a sale and purchase agreement (SPA) to sell the former’s majority equity stake of 60 per cent in Mobil Oil Nigeria (MON) to Nipco, an indigenous oil and gas company.

NIPCO subsequently changed the name of Mobil Oil Nigeria to 11 Plc, which is pronounced as double one.

Neoma Africa Fund LLC will acquire up to 55.82 per cent majority equity stake in C & I Leasing Plc after the conversion of the Fund’s $10 million convertible loan stock into equities in C & I Leasing.

Shareholders of C & I Leasing are scheduled to meet early next month at an extraordinary general meeting to consider and pass resolutions authorising the board of directors of the company to proceed with the conversion of the loan stock to ordinary shares.

Under the arrangement, C & I Leasing will issue 987.5 million ordinary shares of 50 kobo each to Neoma Africa Fund LLC, formerly known as Aureos Africa Fund LLC, in exchange for its $10 million unsecured variable coupon redeemable convertible loan stock in registered units of N4.75 or the United States Dollars equivalent unit. C & I Leasing currently has outstanding shares of 781.65 million ordinary shares of 50 kobo each.

As part of the conditions, C & I Leasing shall not engage in any capital raising through the issuance of equity securities such as ordinary shares, preferred shares, bonds, loans, warrants, rights, options or other similar instruments or securities which are convertible into or exercisable or exchangeable for, or which carry a right to subscribe for or purchase ordinary or preferred shares of the company or any instrument or certificate representing a beneficial ownership interest in the ordinary shares of the company until the conversion is effected.

The above issuances include global depositary receipts and American depository receipts and any other security issued by the company, even if not convertible into ordinary shares, that derives its value and return based on the financial performance of the company or its shares whether through rights offerings, follow-on offerings or any other offering or transaction.

The meeting is expected to authorise the board of the company to issue and allot 987.5 million ordinary shares to Neoma Africa Fund LLC, its nominee, assignee or transferee as notified to the company in writing.

According to the proposal, directors of the company shall also be mandated to take all such steps and provide and execute all such documents, within its power, as may be required to facilitate the conversion, the allotment and the obtention of regulatory approvals required for the conversion and the allotment.

Read Also: C & I Leasing’s N3.23b rights issue closes

C & I Leasing had recently raised about N2.26 billion from its  shareholders, 30 per cent or N970 million short of the leasing company’s target of N3.23 billion. It had sought to raise N3.23 billion from its shareholders through a rights issue of 539 million ordinary shares of 50 kobo each at N6 per share. The rights were pre-allotted on the basis of four new ordinary shares of 50 kobo each for every three ordinary shares of 50 kobo each held as at the close of business on Wednesday, September 4, last year.

The offer recorded 70.02 per cent subscription as shareholders picked up 377.39 million ordinary shares of 50 kobo each. The additional shares from the rights issue were listed on the Nigerian Stock Exchange (NSE), increasing C & I Leasing’s outstanding shares at the stock market from 404.25 million ordinary shares of 50 kobo each to 781.65 million ordinary shares of 50 kobo each.

The company would use the net proceeds of the offer to bolster its working capital and increase leasing assets.

C & I Leasing had in January,  last year concluded a massive share reconstruction that saw cancellation of 1.479 billion ordinary shares of 50 kobo each, about 79 per cent of the company’s pre-consolidation issued share capital.

The share capital reconstruction had reduced the leasing company’s outstanding shares from 1.883 billion ordinary shares of 50 kobo each to 404.25 million ordinary shares of 50 Kobo each. Under the share consolidation, four ordinary shares of 50 kobo each were consolidated into one ordinary share of 50 kobo each.

The company had stated that the purpose of the reconstruction was to allow the company to have enough unissued shares to accommodate the conversion of the $10 million loan stock to ordinary shares and to raise additional capital through the capital market for business expansion.