Category: Investors

The federal government has  been advised against proposed sale of five of the National Integrated Power Projects (NIPPs) as this move will be counterproductive to government’s efforts at building critical national infrastructure. 

A public-spirited group, The Future Group (TFG) called for a halt in the proposed sale of five of NIPPs,  noting that it is a bad move that would further plunged the power sector into deeper crisis, injurious to the economy and the Nigerian populace.

In a petition signed by Chairman, The Future Group (TFG), Patrick Philip, the group drawn the attention of the federal government and the general public to the dangers of the sales.

The group noted that the NIPPs were established in 2004 as an intervention aimed at improving government funding in the critically ailing electricity sector. However, 18 years past the project launch, there are contending conversations surrounding the federal government’s proposed sale of five NIPPs.

“Insufficient electricity supply has always been an issue in Nigeria, inhibiting the development of the country’s industries and overall economic growth. In 2004, President Olusegun Obasanjo’s administration launched the NIPP to address the challenge of power generation specifically. The project’s objectives also included curtailing the immoderate gas flaring from oil exploration,” the group stated. 

While noting the objection of the House of Representatives to the sale of the five power plants located in Geregu, Omotosho, Olorunshogo, Calabar and Benin-Ihovbor, through the Bureau for Public Enterprises (BPE), which has as of 2022 gulped about $7.875 billion, it, however lamented that; “the federal government decision to sell 25 key national assets, particularly the five NIPPs has been one bitter pill very difficult for Nigerians to swallow.

“While the country is still grappling with epileptic power supply despite several billions so far sank into the power sector, it is totally distasteful for a government to contemplate selling such critical infrastructure now.

“The consequences of such sales on the country and Nigerians far outweigh its benefits.

“Almost eight years (2014) after the privatisation of the power sector, there has not been any visible improvement in terms of power supply, expansion or investments by the new owners of DisCos and GenCos.

“A dime has never been declared as profit for government’s 40 per cent asset ownership in the privatised companies till date. It has been a pitiable tale of ‘private gains, public losses’.

“Yet the federal government rather than make this companies work effectively by demanding probity and accountability, is lamentably determined to discard another set of critical economic assets, with a flimsy and brazen reason to fund 2023 budget,” TFG stated.

TFG lamented that the privatisation arrangement of 2014, from the beginning was designed to fail Nigerians but profit a few powerful interests in the country including politicians, expressing concerns that the same way, will go the NIPPs if the federal government is allowed to sell them.

According to the group, if the nation continues to sell national assets to fund budgets, soon, it would be left with no assets because it would have sold everything over time.

The group also noted the desire by BPE to dispose these assets, is not driven by economic gains to the country but  to satisfy the wish of deep-seated interest. This is even as the group faulted the pre-qualifying process for selected bidders for the assets, stating that the process was tinted.

While noting the objections to this sale by other well meaning Nigerians and groups such as the electricity consumers and workers in the power sector, TFG advised that if at all that the federal government insist on their sales, that this is not the right time to do so rather it should be put on hold until after the 2023 general elections and all objections raised by Nigerians are satisfactorily addressed.

“We want to particularly implore the National Assembly to suspend the sale of the five NIPPs and other assets till third quarter of 2023 to avoid the pitfall of diverting proceeds from sales to election funding instead of re-investing into the power sector,” TFG stated. 

FTN Cocoa Processors Plc has received regulatory approval to issue up to 1.7 billion ordinary shares of 50 kobo each to restructure its balance sheet under a massive debt-to-equity conversion aimed at repositioning the agribusiness company.

Regulatory documents indicated that FTN Cocoa will issue 1.7 billion ordinary shares of 50 kobo each to convert  indebtedness of about N850 million to equities at a rate of 50 kobo per share.

The debt conversion is part of efforts of the board and management to improve the depleted balance sheet of the company and support a turnaround process aimed at returning the company to profitability

The board of the company had earlier identified new capital injection as part of strategic initiatives to boost much-needed working capital as the cocoa-processing company continued to struggle with losses.

FTN’s shareholders’ funds had declined from N637.15 million in 2017 to N67.78 million in 2018, leaving the company struggling to meet the capital requirements for enlarged operations. The audited report and accounts for the year ended December 31, 2018 however showed that the agro-allied company grew its turnover by 636 per cent from N81.82 million in 2017 to N602.11 million in 2018. However, FTN recorded gross loss of N284 million in 2018 compared with a gross loss of N251 million in 2017. Net loss stood at N569.37 million in 2018 as against N762.42 million in 2017. Loss per share stood at 26 kobo in 2018 as against 35 kobo in 2017.  

The six-month report for the half year ended June 30, 2020 had shown that turnover dropped by 42 per cent to N217.27 million in June 2020 as against N373.52 million in June 2019. Loss stood at N189.12 million in 2020 as against N243.54 million in 2019.

The nine-month report for the period ended September 30, 2020 also showed that turnover dropped by 55 per cent from N501.97 million in third quarter 2019 to N227.26 million in third quarter 2020. Loss stood at N351.72 million in 2020 as against N354.48 million in 2019.

Directors of the company had attributed the negative bottom-line to inadequate working capital that has continued to hinder the company’s operations.

The board of the company had also blamed high cost of production and high finance expense for the negative performance noting that inadequate working capital hindered the company from procuring raw materials needed to facilitate optimum production.

The board of the company said injection of new capital would support the ongoing turnaround programme and return the company to profitability.

Incorporated in 1991, FTN’s principal activities include processing of cocoa beans and palm kernel into cocoa cake, liquor, butter, powder, palm kernel oil and palm kernel cake. While it exported cocoa cake, liquor and butter, other products including cocoa powder, palm kernel oil and palm kernel cakes are marketed locally to manufacturing companies.

FTN started as Fantastic Abiola Nigeria Limited in 1991 and changed to Fantastic Traders Nigeria Limited in August, 1998. It adopted the current name FTN Cocoa Processors in December, 2007 and converted to a public limited liability company in February, 2009. FTN was listed on the Nigerian Stock Exchange in July, 2009.

The VFD Group recorded considerable growths in income and profitability in the third quarter with the group’s pre-tax profit rising by 37 per cent to N5.1 billion within the nine-month period. 

Key extracts of the interim report and accounts of VFD Group for the period ended September 30, 2022 showed that gross earnings grew by 43 per cent to N10.6 billion in third quarter 2022 compared with N7.4 billion recorded in the corresponding period of 2021. Operating expenses increased by 49 per cent to N5.7 billion from N3.8 billion. Profit before tax rose by 37 per cent to N5.1 billion in third quarter 2022 as against N3.7 billion in third quarter 2021. Earnings per share however dropped to N28.20 in third quarter 2022 compared with N36.43 in third quarter in 2021. 

The balance sheet of the group improved with total assets jumping by 88 per cent to N165.5 billion in third quarter 2022 from N88.2 billion as at third quarter 2021. Total liabilities leapt by 84 per cent to N141.8 billion as against  N77.2 billion in corresponding period of 2021. Shareholder’s fund doubled by 115 per cent from N11 billion to N23.7 billion.

Managing Director, VFD Group, Mr Nonso Okpala said the group’s result showed consistent growth and outstanding performance on all key financial indicators.

According to him, leveraging its clear strategy and management guidance, the group is well poised to continue delivering strong results and superior value to its stakeholders on the way to building Africa’s first truly diverse ecosystem.

“The business environment for the period we operated in has been challenging, with rising inflation, foreign exchange instability, and a slow pace of economic growth with a global recession on the horizon. Despite the economic headwinds, VFD Group showed outstanding resilience and delivered a profit before tax of N5.1 billion, signifying a year-on-year growth of 37 per cent.

“Going forward, we will continue to take advantage of the opportunities provided by a continually changing economic environment and leverage our ecosystem to promote efficiency, increase revenue and profitability, and ultimately maximize shareholders’ wealth,” Okpala said.

Executive Director, Finance, VFD Group,  Folajimi Adeleye said the growth in income was due to growth in the group’s interest-bearing assets.

“As we approach year-end, we would continue to intensify measures to mitigate the impact of high inflation and promote better balance sheet efficiency by reducing our cost of funds, expanding our treasury trading activities, whilst seeking out ways to optimize cost,” Adeleye said.

Nigeria’s oldest conglomerate, UAC of Nigeria recorded a pre-tax loss of N1.1 billion in the third quarter as the conglomerate struggled with high loan finance amid sluggish sales.

The nine-month report of UACN for the period ended September 30, 2022 showed that sales rose by nine per cent to N78 billion in the third quarter. Gross profit was however flat at N12 billion. Operating profit dropped by 66 per cent to N758 million. Loss before tax stood at N1.1 billion in September 2022 as against profit before tax of N1.4 billion recorded in comparable period of 2021..

The group’s gross margin had declined by 148 basis points to 15.8 per cent, which management attributed to rising raw material costs. Operating profit margin also decreased by 215 basis points to 1.0 per cent, driven majorly by losses in the group’s animal feeds business.

Group Managing Director, UAC of Nigeria (UACN) Plc, Fola Aiyesimoju said the profitability of the group was impacted by lower operating profit and higher finance costs.

 ”Our performance in the third quarter was negatively affected by losses in our animal feeds segment, which recorded a loss of N1.9 billion on account of margin pressure, high levels of debt and inventory, and rising borrowing costs.

“We are working to reduce costs and debt levels. We remain committed to our growth and expansion strategy but are cognizant of the heightened levels of risk in light of challenging global and domestic macroeconomic conditions.

“Rising levels of insecurity continue to disrupt operations with the animal feeds segment most affected; recent flooding in the South East of Nigeria impacted operations; however, we were fortunate to avoid material damage to plant and inventory.” 

We continue to monitor the longer-term implications of flooding on agricultural output, food security and logistics in the region,” Aiyesimoju said.

Dangote Industries Ltd has said it will continue to partner stakeholders to deepen commerce, industry and economic activities so as to strengthen the nation’s economy.

It explained that part of the efforts at revitalizing the economy is the sponsorship of the 2022 Lagos International Trade Fair. Themed “Connecting Businesses, Creating Value”, the fair is expected to be declared opened by President Mohammadu Buhari. It holds between November 4 and 13 at the Tafawa Balewa Square (TBS), Onikan, Lagos. 

The collaboration is coming on the heels of similar sponsorship of the recently concluded Abuja International trade fair for which Dangote Group, was a lead sponsor. 

Five companies from the Dangote Group-Dangote Cement, Dangote Sugar, NASCON Allied Industries, Dangote-Sinotruk, and Dangote Fertilisers are participating in the Fair as the business units plans to open helpdesks to attend to enquires from perspective customers.

Dangote Group yesterday stated trade fairs have become a veritable avenue for the subsidiaries to bond with their customers.

NASCON will be offering its range of products, salt packs, seasonings, and stew mix to customers at the trade fair. The salt pack which is designed to endear the product to its teeming customers still comes in packs of 250g, 500g and 1kg. The design is to make the product more accessible and affordable for consumers and other end users.  NASCON would be giving visitors to its stand at the Dangote pavilion a good treat.

Dangote Sugar Refinery will be bringing to the fair all its products ranges while its marketing team will fully be on ground to attend customers and prospective new distributors. Customers are encouraged to visit the stand and buy products at Trade Fair prices.

Dangote Cement, a regular participant at both fairs, will operate an office at the Dangote Group Pavilion. Customers and users of its cement products are encouraged to visit the office during the period of the fair for consultations with the team. 

The group stated that customers wanting to be distributor of any of the products from Dangote Group subsidiaries would have the opportunity to be well informed by staff of the companies who would be on hand to put the customers through on how to go about it.

“Besides the products being sold at reasonable prices, lots of gifts have been packaged for potential visitors to Dangote Stand with opportunity from wet sampling of its products,” the group stated.

Group Chief, Branding Communication Officer, Mr. Anthony Chiejina stated that opportunities abound in this year’s trade fair as Dangote Group’s business units would be expanding its customer base and urged visitors to the fair to take advantage of the development to key into various businesses of the Group

According to him, the company will be offering information on every aspect of its business especially the refinery and fertilizer and urged members of the public to patronize the company at the fair.

•Sustains impressive profit growths

Nigeria’s premier and largest non-interest bank, Jaiz Bank Plc sustained double-digit growths across key performance indicators in the third quarter with total assets of the leading alternative finance institution rising to N325.06 billion.

Key extracts of the interim report and accounts of Jaiz Bank for the nine-month period ended September 30, 2022 released at the Nigerian Exchange (NGX) showed that the bank’s total income rose by 23 per cent from N13.03 billion in third quarter 2021 to N16.03 billion in third quarter 2022. With the inflationary trend, total expenses increased from N9.76 billion to N12.12 billion. Profit before tax thus rose by 19.6 per cent from N3.27 billion in third quarter 2021 to N3.91 billion in third quarter 2022. After taxes, net profit grew by 14.4 per cent to N3.33 billion in third quarter 2022 as against N2.91 billion in comparable period of 2021.

The balance sheet of the non-interest bank also emerged stronger with appreciable growths in customers’ deposits. Total assets rose by 16.4 per cent to N325.06 billion by September 2022 as against N279.28 billion recorded at the end of the year ended December 31, 2021. Customers’ deposits rose from N111.56 billion in December 2021 to N118.11 billion in September 2022.

Managing Director, Jaiz Bank Plc, Dr. Sirajo Salisu, has assured that the bank would build on its enviable pedigree as it seeks to consolidate its leadership in the non-interest financial services industry.

Salisu, who took over in a seamless transition from Mr. Hassan Usman, whose tenure ended after retirement on October 15, 2022, said the growth trajectory of the bank would remain upward.

 ”As we look ahead into the next phase of our bank, we will continually show our best, and meet the challenges of our world so that we can build a future in which we thrive together,” Salisu said.

Salisu, a former executive director at the bank, assured all stakeholders of his commitment to building on the achievements of the bank over the past 10 years.

Jaiz Bank has already secured shareholders’ approvals to raise not less than N150 billion in new capital through Sukuk issuance and to implement a holding company structure that will see the bank engaging in other ancillary financial services.

Jaiz Bank’s planned N150 billion Sukuk will be the largest non-interest bond issuance in the Nigerian capital market.

Shareholders have also mandated the board of directors to take all necessary steps and transactions that would enable the bank to achieve its short to long-term growth objectives as well as greater competitiveness. These steps and transactions may include acquisitions, new investments, restructuring; expansion, capital raising and other business arrangements that enhance the bank’s growth trajectory.

Until his appointment, Salisu had  held several senior executive positions in the bank including regional manager for southern operations, chief risk officer and executive director, business development for the northern region. He was credited with providing key strategic direction that led to the growth of the bank’s business in the northern region.

Prior to joining Jaiz Bank in 2016, Salisu had served as the managing director of Arab Gambian Islamic Bank (AGIB) for six years.

Salisu is a 1991 BSc. Economics graduate from Bayero University Kano. He has an M.Sc. in Monetary Economics from the University of Port Harcourt and Ph.D. in Agricultural Economics from Abubakar Tafawa Balewa University, Bauchi. He also obtained another Master’s Degree in Islamic Banking and Finance from Bayero University, Kano. He is a Fellow of the Institute of Credit Administration (FICA) and Honorary Senior Member of the Chartered Institute of Bankers of Nigeria (CIBN).

The Nigerian capital still requires concerted efforts and incentives to sustain virile growth and play its roles as major driver of the national economic growth.

Fiscal Policy Partner and Africa Tax Leader, PwC Nigeria, Mr Taiwo Oyedele, said the Nigerian capital market is still at its seed stage and needs nurturing to ensure effective growth.

He said government has to approach taxation with the aim of unlocking prosperity noting that such approach will enable the generation of increased taxes, rather than unintentionally hampering growth with its tax policies.

Oyedele spoke as keynote speaker at a webinar aimed at helping stakeholders gain expert insight into amendments such as the Capital Gains Tax (CGTA); Companies Income Tax Act (CITA); Federal Inland Revenue Service (Establishment) Act [FIRSEA]; Personal Income Tax Act (PITA); Stamp Duties Act (SDA); Tertiary Education Trust Fund Act (TETFEA) and Value Added Tax Act (VATA).

According to him, the tax framework has to be adjusted in specific areas like the imposition of capital gains that had significant impact on investor sentiment but limited tax yield.

“Nigeria needs a capital market that can finance growth and development and position the country for global and regional relevance,” Oyedele said.

He urged stakeholders to do more data coagulation on impact assessment of taxes and present this to government to inform policymaking.

Chief Executive Officer, Nigerian Exchange (NGX), Mr Temi Popoola said the webinar underscored the importance of the Exchange’s leading role in driving capacity building, fostering effective collaboration, deepening and enhancing the liquidity of the Nigerian capital market.

“The amendments made by the Act are part of the expansion of the federal government’s fiscal policy and harmonization with international best practices for the taxation of new areas of the modern global economy and existing economic areas that have not been fully maximized. These changes impact not just the capital market, but commercial companies such as telecommunications, ICT, and oil & gas among others. This webinar is an initiative  put forward to sensitize stakeholders and intermediaries in the Nigerian capital market under a common forum to understand the provisions in the Finance Act 2021,” Popoola said.

Nigeria’s macroeconomic outlook remains tough and companies and governments may continue to face low financial performance.

In its latest macroeconomic review, analysts at FSDH Capital said while Nigeria’s Gross Domestic Products (GDP) growth has remained strong in 2022, driven mainly by the non-oil sector, the country will continue to face structural fiscal and monetary challenges.

The report outlined that national growth in recent period has been driven by improved consumer spending in the service sectors with sub-sectors such as trade, transport, finance and information and communication technology (ICT) playing key roles in driving growth, although their impact on quality job creation and living standards are unclear.

According to the report, developments in the oil sector show that Nigeria’s oil production dropped to 1.1 million barrels per day in August 2022 from 1.2mbpd in June, according to OPEC. This lower oil production is not only affecting government revenue but also GDP growth as the oil sector has been in recession since the third quarter of 2020.

The report noted that with the recent efforts by the government to curtail oil theft and illegal bunkering, official oil output figures are expected to improve marginally, although the revenue gains may be limited as oil prices trend downwards.

“Beyond oil theft, petrol subsidy is massively draining the government’s financials. The government had planned to remove subsidies in 2022 but this was suspended due to rising inflation and worsening economic conditions. Given the fast-approaching 2023 general elections, this burden of subsidy will likely be passed on to a new administration as the chances to make critical reforms are slimmer in an election year. The implication of this is more borrowing to finance recurrent expenditure and subsidy payments given the slow growth in revenue.

“Structural problems are not giving way anytime soon in Nigeria. Inadequate infrastructure, poor power supply, limited access to affordable finance are common problems faced by businesses, resulting in a less competitive business environment. In addition to these problems, insecurity and foreign exchange challenges are prevalent and are largely responsible for the upward trending inflation rate, which exceeded 20 per cent in August 2022. The extent to which the economy can grow rapidly and become inclusive relies a lot on the government’s ability to address these problems going forward,” the report stated.

Analysts pointed out that that the proposed 2023 budget does not present any significant hope to the myriad of challenges facing the country noting that with debt servicing gulping about one-third of the total expenditure, the figure will likely be higher at the end of 2023 when actual figures are released for several reasons.

“First, interest rates are trending upwards. Second, revenue will likely underperform leading to more borrowing to cover the gap. Thus, only about a quarter of total expenditure will be spent on capital projects in 2023. Already, figures from the budget office show that debt servicing exceeded revenue by 19% in the first four months of 2022. This trend is expected to continue in coming quarters,” FSDH Capital stated.

The Managing Director of Jaiz Bank, Dr. Sirajo Salisu has disclosed that the bank has disbursed over N1 billion loan facilities to Micro Small and Medium Enterprises belonging to non-muslims.

He also stated that over the past ten years, the bank’s profitability and financial viability has grown as the bank plans to expand with five other branches coming onboard soon.

Sirajo Salisu made these disclosures at his maiden engagement with the media in Abuja on assumption as MD of the bank.

Sirajo Salisu noted that because Jaiz bank is described as an Islamic Bank does not mean that it’s doors are shut to non-muslims. He described such perception as unfounded.

Sirajo said there is need for Nigerians to be enlightened on what Islamic and non-interest banking entails.

According to Salisu “the message we want to pass across to Nigerians is that non-interest banking is pure business and a non Muslim can be a shareholders of an Islamic bank not only in Nigeria but anywhere in the world, also, a non Muslim can be a customer and staff of an Islamic bank”.

“We at Jaiz bank, we will keep empahising that anywhere you hear Islamic banking, it is just business which is guided under sharia guidelines that preaches transparency and accountability.

“As at today, many non-muslins have benefited from our loan facility of N1 billion and above since Jaiz Bank came onboard,” he said.

He added that the bank focuses on transactional banking which is why they sometimes make profit more than conventional banks.