Category: Investors

By Taofik Salako, Deputy Group Business Editor

The new Chief Executive Officer (CEO) of Seplat Petroleum Development Company Plc Roger Brown has resumed.

Brown is expected to lead Seplat into the next phase of the company’s growth aspirations following the retirement of the founding CEO Austin Avuru on July 31, after 10 years.

Brown joined Seplat in 2013 as the CFO and played a key role in the dual listing of the company in 2014 on both the London and Nigerian Stock Exchanges.

Similarly, since joining Seplat, he has played significant roles in various asset acquisitions by the Company as well as implementing the company’s financial business model.

Read Also: Seplat targets more acquisitions as shareholders get $59m dividends

Brown played critical roles in the company’s successful landmark deals, Initial Public Offering (IPO) and financial structure of debt and acquisitions, as well as increased returns to shareholders. He is very familiar with the local and global business environments and institutions. As the new CEO, he is expected to work towards reinforcing the company’s leading position in the Energy sector.

Brown brings to the CEO role, an extensive knowledge of the company in his over six years as the CFO and a member of the Board. He has strong financial, commercial and Mergers and Acquisition (M&A) experience as well as proven people skills which will be an asset as the company embarks on the next phase of its growth. One area of priority for Seplat is to ensure that liquidity and cash flow of the company remains strong and that the company’s balance sheet maintains its resilience and robustness.

By Taofik Salako, Deputy Group Business Editor

Sterling Bank Plc recorded a net interest income of N33.5 billion during the half-year ended June 30, 2020 as against N30.4 billion during the corresponding period of 2019, representing a growth of 10.1 percent.

The bank’s total assets also rose by 9.4 percent to N1.294 trillion during the review period from N1.183 trillion in 2019 while customer deposits inched up by 2.5 per cent to N915.2 billion in 2020 from N892.7 billion last year.

The six-month report showed that the bank delivered a profit after tax of N5.4 billion on gross earnings of N70.2 billion in the first half of 2020 compared with a net profit of N5.7 billion on gross earnings of N72.3 billion during the corresponding period of 2019.

The lender closed the half-year with a trading income of N3.9 billion as against N1.2 billion for the corresponding period of 2019, representing a remarkable increase of 242.8 percent.

Read Also: Sterling Bank creates new stream of income for customers

Chief Executive Officer, Sterling Bank Plc, Mr. Abubakar Suleiman said the impressive half-year performance in the face of the COVID-19 pandemic and the ensuing economic disruption belies the rough seas ahead.

According to him, in the second quarter of the reporting period, the bank focused on empowering its stakeholders to respond to the unprecedented disruption occasioned by prolonged restriction to movement while supporting them to adapt to new ways of banking.

”Our commitment to digitisation was validated as we continued to serve existing and new customers through our mobile and digital platforms. We also responded to the uncertainty by doubling down on cost optimisation while leveraging our existing remote work policy to keep our workforce productive without risking COVID-19 infection. Notwithstanding rising inflation, we were able to moderate operating expenses during H1 2020 to deliver a net profit comparable to the first half of 2019,” Suleiman said.

He outlined that the in the second half of the year, the bank’s focus remains the same; retooling its employees to function optimally while observing social distancing, enhancing execution capacity and enabling its customers to thrive in the middle of a pandemic.

“We will continue to focus on the sectors that are critical to the well-being of the economy, or as we call it, the HEART sectors namely: Health, Education, Agriculture, Renewable Energy and Transportation,” Suleiman said.

He observed that the contracted gross earnings was primarily due to a dip in fees and commission as a result of a downward review of electronic banking fees.

Suleiman noted that although interest income declined by 4.3 percent, this was offset by an 18.1 decline in interest expense, thereby delivering a 130 bps drop in cost of funds and consequently, a 60-bps reduction in net interest margin.

“In terms of asset quality, non-performing loan (NPL) ratio was flat at 2.1 percent while cost of risk went up by 140 bps to 2.1 percent and operating, expenses declined by 0.1 percent, achieved by moderating administrative expenses despite growth in other operating expenses including AMCON and insurance fees. The bank was able to maintain a strong capital and liquidity position of 15.2 percent and 33.5 percent respectively above the regulatory benchmar,” Suleiman said.

By Taofik Salako, Deputy Group Business Editor

The Nigerian Bottling Company Limited (NBC) has reiterated its commitment to product quality and integrity as the gold standard of its operations.

Country General Manager, NBC,  Matthieu Seguin, gave this assurance  during the company’s virtual 2020 Stakeholders Forum themed ‘’Product quality and integrity: challenges and opportunities’.

The event also featured key contributions from the Vice President, Quality, Safety and Environment, The Coca-Cola Company, Zoltan Syposs; Director-General, National Agency for Food and Drug Administration and Control (NAFDAC), Prof. Moji Adeyeye, and Chief Executive Officer, Federal Competition and Consumer Protection Commission (FCCPC), Babatunde Irukera.

Seguin explained that quality remains the hallmark of the operations of the Coke System.

“At NBC, we understand that only products and services valued and accepted by our customers and consumers will deliver help our business grows.

We are committed to driving our business forward by continually improving quality control across the organisation, working together with Coca-Cola Nigeria, local authorities, partners, suppliers, customers and consumers,” Segun said.

Seguin said a survey NBC conducted earlier in the year showed that product quality and integrity ranked highest among the demands of its stakeholders, hence its decision to continue prioritising it.

“Our commitment to quality and integrity is from production to delivery. Everyone at NBC works hard to procure the finest ingredient, equipment and services from some of the industry’s most respected suppliers.

We also complement this with our state of the art local production and distribution system,” Seguin said.

He added that the NBC achieves the highest product quality and integrity through compliance with local and international standards, certification of its systems, auditing and regular feedback from customers.

“We keep the line of communication open to our consumers for regular feedback which we get a lot, and this also guarantees the prompt resolution of complaints they may have. As the world evolves and consumers’ preferences change, we believe in continuous improvement of our system,” Segun added.

Syposs said that the Coca-Cola System comprising Coca-Cola and NBC is vigilant about product quality and integrity because research has showed that about 200 different types of diseases are spread through contaminated food and beverages, with about 420,000 deaths recorded annually from contaminated food, 125,000 of them among children under the age of five.

Syposs further noted that The Coca-Cola System was building a total beverage company and that it would continue to maintain the highest product quality to further earn consumers’ trust.

In his presentation, Irukera stressed the importance of product quality and integrity, noting that it helps in sustaining brand loyalty.

He explained that the most basic obligations of manufacturers to consumers is to provide clarity of information, legitimacy of both direct and indirect claims, consistency of product delivery and consumer satisfaction derived from product usage.

Adeyeye who was represented by the Director, Food Safety and Nutrition, NAFDAC, Mr. Sherif Olagunju said it is important for businesses to look for ways of gaining and sustaining brand loyalty by increasingly building quality into their products and consequentially building customer trust.

“To survive in severe competition brand loyalty is a powerful tool and there can be no loyalty without product quality and consumer satisfaction,” Adeyeye said.

They both commended NBC for its conscious self-regulation and internal audit, noting that this explains why consumers trust the company’s products.

By Taofik Salako, Deputy Group Business Editor

The Nigerian Stock Exchange (NSE) has approved application by Transcorp Hotels Plc to raise N10 billion in new equity funds from its existing shareholders.

Regulatory documents obtained at the weekend indicated that the management of the NSE, where the new shares being proposed for issuance will be listed, has approved the planned new capital raising, paving the way for the hotel and tourism company to complete pre-offer processes.

Transcorp Hotels, owners of Transcorp Hilton Abuja and Transcorp Hotels Calabar, plans to raise N10 billion through the issuance of 2.66 billion ordinary shares of 50 kobo each at N3.76 per share to prequalified shareholders.

The rights will be pre-allotted to existing shareholders on the basis of seven new ordinary shares for every 20 ordinary shares of 50 kobo each held as at July 13, 2020.

The shares will be issued from the authorised share capital of the company which is currently at N7.50 billion of 15.0 billion ordinary shares of 50 kobo each.

Post-offer fully paid-up share capital will be N5.13 billion of 10.26 billion ordinary shares of 50 kobo each.

Shareholders had earlier, at an Extraordinary General Meeting last month in Lagos, approved the N10 billion rights issue.

Chairman, Transcorp Hotels Plc, Mr. Emmanuel Nnorom said the approval and endorsement by shareholders empowers the board and management to look to the future with confidence despite the current harsh operating environment.

Managing Director, Transcorp Hotels Plc, Mrs. Dupe Olusola, said the company’s track record of excellent service delivery has positioned it as the first choice for international and local guests.

“We are not resting on our oars but working round the clock to innovate new products and services to further delight our guests, notable of such is the launch of asset-light strategies to deepen our hospitality footprints across Africa,” Olusola said.

She added that while the world has been greatly impacted by the COVID-19 pandemic, with the hospitality industry being one of the hardest hit, Transcorp Hotels is optimistic about a great recovery for the sector.

She noted that shareholders’ approval for new capital raising shows that shareholders have confidence in the future of the company, assuring that the company will continue to play their part in ensuring a significant recovery to the Nigerian hospitality industry.

A Non-Executive Director, who also represents the Ministry of Finance Incorporated on the board, Mr. Alexander Adeyemi, pointed out that given the challenging times the hospitality industry faces, it has become critical to inject funding into the business for a stronger balance sheet.

“Transcorp Hotels has maintained a history of excellent performance in the hospitality industry, and this is a bold step towards the achievement of its long term goals,” Adeyemi said.

By Taofik Salako, Deputy Group Business Editor

Shareholders of NASCON Allied Industries Plc have expressed satisfaction at the performance of the company but tasked the food seasoning company to expand its market share so as to increase revenue.

Speaking at the NASCON’s 2019 Annual General Meeting (AGM) in Lagos, shareholders commended the company’s prompt payment of dividends just as the management assured that the performance for the first half of this year holds assurance for a bumper harvest at the end of the year despite the coronavirus pandemic effect

A shareholder, Mrs. Bisi Bakare,  speaking on behalf of others, who attended virtually, stated that the company is known for taking good care of shareholders through consistent payment of dividends noting that despite the harsh operating environment, the company still paid a dividend of 40 kobo per share translating to a 57 percent dividend payout ratio.

She was, particularly, elated that the NASCON board and management grew revenue from N25.77 billion to N27.49 billion in the year under review.

Adding his voice to the commendation, a shareholders’ rights’activist, Sir Sunny Nwosu, lauded 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 said while other companies are lamenting and cutting down on production, the company is paying dividend which is commendable.

He urged the company to more market share in the food sector, especially in the Southeast and Southwest regions through selected strategies.

He said if the company increases market share in these regions, its revenue will increase and the company will expand offering more opportunities.

He said: ‘’The management should expand our customer base to attract more revenue. Develop strategies to penetrate the Southeast and Southwest markets. The plants are close to these markets.’’

Responding, Managing Director, NASCON, Paul Farrer said the company has developed plans and strategies to capture share in the stated markets and will gradually deploy them in the coming months.

He said the company have proved resilient in the challenging environment of 2019 and is strongly focused on capacity growth and increased market penetration.

He said the company will be leveraging some synergies, including improved output in terms of quality, quantity and business efficiency to deliver value for  stakeholders.

A peep into NASCON’s annual report for 2019 indicated that operating profit stood at N2.9 billion, net profit at N1.85 billion, total assets at N38.67 billion.

By Taofik Salako, Deputy Group Business Editor

Amid concerns that the stock market may suffer more decline due to the effect of COVID-19 pandemic, market analysts have advised investors to take advantage of the bargains created by the slowdown to invest in stocks with strong fundamentals and favourable long-term outlook.

In their mid-year outlook released Tuesday, analysts at CardinalStone, an investment banking group, said the twin evils of COVID-19 and oil price shock would likely cause a deterioration in the domestic economy in the year, with a potential spillover into the first few quarters of 2021.

Analysts noted that the viral spread came at a time when budgetary space to absorb shocks is limited by weak oil prices pointing out that COVID-19 threatens to overwhelm domestic healthcare infrastructure, upend livelihoods, cripple social conditions, and distort business activities.

Read Also: NIPC tracks $5.06b investment half-year

The report pointed out that the scale of measure adopted by Nigeria to absorb the impact of COVID-19 appears insufficient to prevent significant distortions to domestic macro variables in the current year.

“In the equities market, we expect investors to take advantage of bargain hunting opportunities in fundamentally strong names and hold for the long term. Investors could gravitate towards stocks with track records of high profitability, low financial leverage, and less margin volatility amidst the current macro vulnerabilities,” CardinalStone stated.

Analysts said the monetary policy bias could remain largely dovish, with administrative measures set to leave system liquidity at elevated levels and yields mostly lower in third quarter 2020.

Experts expected yields to slowly reverse trajectory in fourth quarter of this year due to a halt in OMO maturities that cannot be rolled-over as a fallout of CBN’s OMO restrictions.

“Thus, investors are likely to stay short in the fixed income space. The government could also use some domestic borrowings to augment any budgetary shortfall that may arise after concessionary funding options have been exhausted,” CardinalStone stated.

The report indicated that global equities delivered broadly negative returns in first half of the year against a backdrop of weakening growth and declining trade interactions. It noted that the Nigerian market was affected by the differing sentiments of domestic investors and foreign portfolio managers in first half.

“On the former, CBN’s restriction of local non-bank financial institutions and individuals from participating in OMO programs resulted in a significant increase in idle liquidity, some of which eventually flowed to equities with the allure of fixed income market reduced by expansionary measures of the apex bank. While the lack of viable options forced some domestic investors into stocks, foreign interest in Nigeria’s market waned on the back of credit ratings worries, oil price weakness, currency concerns, and potential earnings tail off,” analysts stated.

According to analysts, despite some recent resurgence, Nigerian stock market could close the year in the red if deployed stimulatory measures fail to compensate for macro setbacks.

“By our estimates, the cumulative fiscal and monetary response to tackling the ongoing coronavirus-induced economic slowdown in Nigeria amounts to only 3.0 per cent of GDP. This stimulus pales in comparison to that of South Africa, 10.0 per cent and Brazil, 6.5 per cent even though both countries were not as exposed to the equally dire strait of falling commodity prices. The grimmer outlook for Nigeria reflects the additional strain that weaker oil economics can impose on its mono-product economy. Besides, there are genuine concerns that a full resumption of CBN dollar sales to foreign portfolio investors could see renewed foreign selloffs overrun the bullish strides from domestic participants. In a word, if you take away the few opportunities for tactical positionings, the equities market may struggle to attract significant buying interest for the rest of 2020,” CardinalStone stated.

Analysts noted the difficulty in accurately predicting the depth or duration of the current economic downturn due to the high volatility of macro variables, but advise investors to brace for near-term declines in stock markets as second quarter company scorecards are released.

“In this environment, we expect investors to gravitate towards stocks with track records of high profitability, low financial leverage, and less margin volatility. Such counters could provide critical buffers for portfolios in the current year. Specifically, retained earnings from prior successful years could support current dividend payments, which could, in turn, augment portfolio returns during market downturns,” CardinalStone stated.