The Nation Newspaper

Tag: earnings

  • May & Baker improves earnings in first-half

    May & Baker Nigeria Plc recorded impressive growths in the top-line and bottom-line in the first half of the year as latest earnings report indicated that the leading healthcare company has continued to consolidate the recent recovery in earnings performance.

    Key extracts of the interim report and accounts for the period ended June 30, 2015 showed that May & Baker strengthened its underlying fundamentals, which impacted positively on the actual profit and loss items. Gross profit margin improved to 34 per cent in first half 2015 as against 31.59 per cent in comparable period of last year. Operating profit margin also improved from 5.03 per cent in 2014 to 9.35 per cent this year. As against a negative pre-tax margin of -5.23 per cent in first half of last year, the company posted a modest pre-tax profit margin of 1.29 per cent in first half 2015.

    The six-month report showed a top-down well-rounded performance, driven by growths across all the business segments of the company. Turnover rose by 10.7 per cent to N3.41 billion in first half 2015 as against N3.08 billion in comparable period of 2014. Gross profit improved from N972.59 million in 2014 to N1.16 billion, representing an increase of 19.2 per cent. Operating profit doubled by 105.7 per cent from N155.16 million to N319.1 million. As against loss of N161.13 million in first half 2014, the company recorded modest pre and post tax profit of N43.73 million and N29.73 million respectively. Earnings per share thus stood at 3.03 kobo as against loss per share of 16.44 kobo in comparable period of last year.

    The performance was driven by appreciable growths in all the business segments and improving internal cost management. Segmental analysis showed that turnover in the pharmaceuticals business improved from N2.11 billion in first half 2014 to N2.34 billion in first half 2015. Beverage business turned in N33.23 million sales in first half 2015 compared with N29.91 million in comparable period of 2014 while the foods business improved sales from N941.65 million to N965.15 million.

    Administrative expenses declined to N263.45 million in first half of the year compared with N283.18 million in first half last year, while finance costs had declined from N309.16 million to N284.39 million.

    The latest report further strengthened the overall outlook of the company, which had rebounded to profitability in 2014. The audited report and accounts of May & Baker Nigeria for the year ended December 31, 2014 had that group turnover rose to N7 billion in 2014 as against N6.3 billion recorded in 2013. Gross profit also rose by 13.2 per cent from N2.3 billion to N2.6 billion. Profit before tax stood at N101.1 million in 2014 compared with a pre-tax loss of N11.4 million in 2013. After taxes, net profit was modest at N63 million as against net loss of N103 million recorded in 2013.

    The report indicated that cost containment and efficient resource utilisation were responsible for the rebound. The company reduced financing charges, distribution, sales and marketing expenses to optimise the top-line growth and return the bottom-line to the positive side.

    Operational profitability rose by 16.2 per cent while sales and marketing expenses dropped by three per cent. Finance costs also dropped by 4.2 per cent. However, finance cost still remains a challenge to the company.

    May & Baker raised her capacity to produce more products with the construction of the world-class pharmaceutical centre known as the PharmaCentre located in Ota, Ogun State.

    The facility has raised May & Baker’s production capacity by over 60 per cent.

     

     

    However, the company got under pressure from financing charges and depreciation allowances as a result of its new pharmaceutical manufacturing plant, which was financed largely by loans during the 2008-2009 capital market recession.

    Finance costs rose by 34.3 per cent to N630.71 million in 2013 compared with N469.63 million in 2012, while the company provided about N240 million annually in 2013 and 2014 out of its gross profit for the depreciation of the new pharmaceutical  facility with monthly depreciation average of N19.8 million. Depreciation on the new plant started in second quarter of 2012.

    The Pharma Centre  is a mega investment in the pharmaceutical sector targeted at making Nigeria one of the leading producers of quality medicines in the world. It is one of the few Nigerian pharmaceutical facilities that were recently certified by the World Health Organisation (WHO) on Good Manufacturing Practice (GMP). The PharmaCentre is currently undergoing the process of WHO pre-qualification for its specific products.

    In a recent interview with The Nation, managing director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, said the company will consolidate its performance in the years ahead.

    According to him, with the completion and stability of the new factory, which is now running well, management’s focus has shifted to how to optimize the potential of the new factory to generate returns for shareholders.

    “Just on its own, we are going to get a lot of returns from that facility going forward because the output is getting better, the efficiency of the processes is improving, and with that we believe the products should be coming out at a lower cost unit as we do more volumes and our margins will also get better. But beyond that, we have taken a look at our products portfolio and we are repositioning the company in a way that we put emphasis on those products that are not what everybody is doing in the market. Those products surely will give us better returns,” Okafor said.

    He said The Pharma-Centre as a centre of excellence would soon begin to do specialized products that will have better margins and will lead to higher profits for the company.

    He noted that with the WHO certification, the company has been getting a lot of enquiries from multinational companies abroad which want to manufacture on contract basis from that facility, and some Nigerian companies that want quality products; wanting to do their products from the Pharma-Centre.

    “Those enquiries are coming in and we are already taking on some of them, what they will do is to help us improve the capacity utilization and that will help us to reduce unit cost of products. The most important thing for us at this stage is to reduce our borrowings. We have not been borrowing since last year, though we still use some level of bank overdrafts. We want to get some equity in so that we can pay off the loans we have now and plough back the huge interests we pay into the bottom-line and then we will be able to have a lot more to share to shareholders. So, this year, apart from trying to ensure that we manage our costs better, that we improve our processes to be more efficient, we are also looking at being able to bring some level of equity so that we can reduce our dependence on loans. That’s basically what we are doing and we believe we are going to have some good returns this year,” Okafor said.

    “We have gone from the situation where we had to battle with the full weight of depreciation of the facility and paying interest on borrowed money and trying to get the facility to work well, all these in a year, that was in 2012 that we also had to cope with the conversion to the International Financial Reporting Standard (IFRS); now things are getting better because progressively these things are being resolved. Also, with the progress we are making on the WHO front, we are positive that in the next one year, we should be able to export our first product. We believe that before the end of this year, we must have prequalified the first product out of Pharma-Centre, export the product and participate in the global tenders for the donor agencies-funded drug supply to Nigeria. So, things are getting better going forward,” Okafor added.

    Chairman, May & Baker Nigeria Plc, Lt. General Theophilus Danjuma (rtd), told shareholders in May that the company would raise new equity funds later this year to deleverage its balance sheet and consolidate the gains of its recent investments and profitability.

    Danjuma indicated that the company may opt for rights issue to compensate shareholders that had bore the burden of the company’s huge depreciation and interest financing, which depressed profit in the previous year.

    Shareholders had earlier in 2014 approved a resolution authorizing the board of the company to raise additional N3.2 billion through rights issue or private placements.

    Danjuma said the new equity issue was delayed to give investors opportunity to pick their rights in recognition of their supports for the company.

    “The company has not been able to consummate this offer on account of due considerations of timing and the readiness of our members to fully pay for their stakes. We are mindful of the sacrifices members have made in the past when the company was under pressure of constructing the plant in Ota and we realise that it will only be fair to open the offer when majority of us will be able to take our rights,” Danjuma said.

    He called on the shareholders to prepare to take up their Rights in the current financial year to enable the company raise more equity for its operations.

    “I am optimistic that as soon as soon as we are able to recapitalize the business we shall take down the high financing cost which is currently taking substantial earnings off the company. This will put us in a stronger position to fully leverage our installed capacity, aggressively promote our existing brands, launch the new products and businesses in our pipeline and deliver better profits,” Danjuma said.

     

     

     

  • Wema Bank records N20.87b gross earnings

    Wema Bank records N20.87b gross earnings

    Wema Bank’s unaudited financial results for the period ended June 30, 2015, showed that it recorded  gross earnings of N20.87 billion, up from N20.82 billion in first quarter of last year.

    Its Net Interest Income stood at N9.06 billion, down from N9.71 billion in first quarter of last year while Profit Before Tax dropped to N1.17 billion, from N1.70 billion in the first half of 2014.

    The bank’s Managing Director/CEO, Segun Oloketuyi, said: “Given the tough operating environment in the first half of 2015 attributable to economic headwinds, regulatory restrictions and political uncertainty, the bank has been able to sustain its financial performance, albeit, on a lower level compared to the same period in 2014”.

    He said the first quarter of the year was characterized by election-related activities and political maneuverings with limited emphasis on economic matters, while the second quarter was largely characterized by the continued pressure on the currency, the tight monetary policy conditions and the low level supply of petroleum products. All these issues affected consumer discretionary spending and indeed the growth in our Retail volumes.

    He said the Cash Reserve Ratio (CRR) harmonisation has reduced liquidity with significant impact on   margins from money market investments. “We are confident that as the new administration settles into office, its policy thrust will become clearer, hence, enabling us to continue to make well informed lending decisions mitigate risk exposures and further expand our customer base.”

    The bank’s Chief Finance Officer, Tunde Mabawonku, said: “Operationally, the bank has continued to efficiently deploy its assets. Our loans to deposits ratio has moderated to 57.1 per cent, compared to 57.6 per cent as at December 2014, through a cautious approach to our lending, pending policy clarity from the new administration.

    The liquidity squeeze and tight monetary policy conditions affected our yields from money market investments. Technically, banks can only lend 39 per cent of available resources, as CRR is 31 per cent and liquidity remains 30 per cent. We therefore used the first few months of the financial year to streamline our mix of deposits and funding sources. This has resulted in slightly smaller deposit liabilities volumes but a better cost of funds.

  • Kano set to review agric policy to boost earnings

    Kano State Commissioner for Information, Internal Affairs Youth Culture and Sports, Malam Mohammed Garba, has restated the commitment of the state government to review agric policy with a view to getting money to fund developmental projects in the state.

    Speaking to reporters in Kano, Garba said Kano was at liberty to exploit its abundant agricultural potentials, so as to ensure food security, adding that the administration is determined to exploit all viable avenues for economic survival.

    According to him, the revenue base of the government can be enhanced through the exploitation of the vast solid mineral resources, stressing that Kano has a comparative advantage in that direction.

    He however, disclosed that the state government is poised to use the 27 major dams, strategically located in some parts of the state for the purpose of irrigation farming, including production of hydro- electric power, affirming that the  government is left with no option than to exploit all the available resources at the disposal of Kano State.

    Furthermore, he revealed that for the enhancement and consolidation of the revenue base of the state, the commissioner revealed that a special committee has been established under the  chairmanship of Professor Isah Dandago, the state Commissioner of Finance  to work out a blueprint on how to generate additional revenue for Kano.

    Also, Garba, who briefed reporters on the outcome of the first meeting of the Kano State Executive Council meeting, said that the state government has approved the sum of N2 billion for the procurement of 50,000 metric tonnes of fertiliser and would be distributed to farmers for the 2015 rainy season through gross enhancement support scheme (GES).

  • Unity Bank eyes N30b profit, N110b earnings

    Unity Bank eyes N30b profit, N110b earnings

    The management of Unity Bank Plc yesterday rolled out its short-term financial forecasts indicating that the bank will grow its top-line and profitability consecutively over the next three years to about N110 billion and N30 billion respectively.

    Managing director, Unity Bank Plc, Mr Henry Semenitari, who addressed the investing public at the Nigerian Stock Exchange (NSE) yesterday, said the bank would achieve its financial targets as these are anchored on a viable growth strategy, which will ensure increasing operational efficiency over the years.

    He outlined that the bank plans to achieve profit before tax of N20.26 billion in 2015 and subsequently scale up to N26.13 billion and N30.41 billion in 2016 and 2017 respectively.

    He added that the bank plans to grow top-line earnings consecutively to N76.26 billion in 2015 and N88.52 billion and N109.49 billion in 2016 and 2017 respectively.

    Semenitari assured that the bank has been well-positioned to achieve its financial targets noting that the rebound from a loss position of N33.64 billion in December 2013 to a profit position of N13.6 billion before tax in 2014 financial year evidenced the remarkable turnaround the bank had witnessed.

    According to him, agriculture sector remains a major strategic focus of the bank based on its historical strength while it would also focus on emerging middle market entrepreneurs to remain retail bank of choice.

    He pointed out that the recent share reconstruction by the bank was done to ensure that the bank can begin dividend payment in the nearest future and create better value for all shareholders.

    Key extracts of the audited report and accounts of the bank for the year ended December 31, 2014 showed that gross earnings rose from N62.83 billion in 2013 to N77.07 billion in 2014. Interest income had grown from N52.2 billion in 2013 to N62.64 billion in 2014 while net interest income rose from N30.14 billion to N45.45 billion. Fee and commission income stood at N10.71 billion in 2014 as against N7.33 billion in 2013. Other incomes totaled N3.72 billion in 2014 compared with N3.30 billion in 2013.

    After taxes, net profit stood at N10.69 billion in 2014 compared with net loss after tax of N22.58 billion in 2013. Earnings per share thus turned positive with a modest 17.45 kobo in 2014 in contrast with loss per share of 58.74 kobo recorded in previous year.

    The balance sheet of the bank also firmed up substantially. Total assets rose to N413.31 billion in 2014 as against N403.63 billion in 2013. Total liabilities meanwhile dropped from N375.42 billion in 2013 to N337.04 billion in 2014. Shareholders’ funds closed 2014 at N76.26 billion as against N28.21 billion in 2013.

    Unity Bank had raised N39.22 billion new equity funds in 2014 through a combined rights issue of N19.22 billion and special placement of N20 billion.

  • Fidelity Bank grows earnings by 12.5% to N34.8b

    Fidelity Bank grows earnings by 12.5% to N34.8b

    Fidelity Bank Plc has released its unaudited results for the first quarter ended March 31, which showed a 12.5 per cent growth in gross earnings to N34.8 billion and a Profit before Tax (PBT) of N4.7 billion.

    The result also showed that its fee income increased by 54 per cent to N9.2 billion from N6 billion in first quarter of 2014 while operating income increased by 14.4 per cent to N21.6 billion from N18.9 billion same period of last year.

    However, total expenses increased by 12.9 per cent to N14.4 billion from N12.7 billion in first quarter of  2014 while profit before tax increased by 5.6 per cent to N4.7 billion from N4.4 billion during same period of last year. Profit after tax increased by 5.6 per cent to N4 billion from N3.8 billion in first quarter of last year.

    Commenting on the results, its Managing Director, Nnamdi Okonkwo, said the lender built on the successes of the last financial year as it remains committed to delivering sustainable earnings and improved asset quality. “Notwithstanding the headwinds witnessed in our industry, we recorded a 5.6 per cent growth in Profit before Tax (PBT) to N4.7 billion putting us on the right path to achieving our 2015 financial year guidance,” he said.

    The bank chief said deposits declined by 2.7 per cent in the quarter under review as the lender continued to replace more expensive wholesale funds with cheaper retail deposits.

    “Our retail banking strategy continued to deliver impressive results as core retail liabilities increased by 7.7 per cent in first quarter of this year, while e-banking income from increased cross-selling of products to the expanding retail customer base also grew by 49.3 per cent. Risk assets grew marginally by one per cent with non-performing loans declining to 3.8 per cent and cost of risk at 0.8 per cent,” he said.

    The bank chief said the lender continued with its balance sheet optimisation which saw average yields on earning assets improve by 100 basis points and net interest margin inched up to 6.2 per cent during the quarter.

     

  • Slow first quarter earnings dampen equities

    Slow first quarter earnings dampen equities

    Nigerian equities relapsed to the negative last week as investors sought to rebalance their portfolios in the light of largely tepid first quarter performance by many quoted companies.

    Key benchmark indices at the Nigerian Stock Exchange (NSE) indicated that the market traded largely on negative sentiments during the week. The All Share Index (ASI), the value-based composite index that tracks prices of all quoted companies, indicated a week-on-week decline of 1.48 per cent. The ASI closed the week at 34,485.72 points as against its week’s opening index of 35,005.05 points.

    The downtrend last week pushed the overall market situation to the negative. Average year-to-date return, which opened the week at 1.0 per cent, closed the week at -0.49 per cent. With the exception of the insurance and industrial goods sectors, all group indices at the stock market indicated widespread bearish sentiments.

    The NSE 30 Index, which tracks the 30 most capitalised stocks and thus mirrors the overall market situation, recorded a weekly decline of 1.38 per cent. The NSE Banking Index indicated a week-on-week decline of 1.90 per cent. The NSE Consumer Goods Index slipped by 1.98 per cent. The NSE Oil and Gas Index dropped by 0.75 per cent while the NSE Lotus Islamic Index, which tracks ethical stocks in line with Islamic laws, depreciated by 0.43 per cent. However, the NSE Insurance Index recorded impressive gain of 2.56 per cent while the NSE Industrial Goods Index recorded modest gain of 0.64 per cent.

    Aggregate market value of all quoted companies dropped by N177 billion to close the week at N11.751 trillion as against opening value of N11.928 trillion. Analysis of price movement showed that 42 stocks appreciated during the week as against 33 stocks that depreciated.

    Low-priced stocks dominated the top price changes, underlining the conflicting shift in investors’ mood to potential capital gains and dividend yields as well as aversion for risks associated with illiquid stocks. Ikeja Hotel led the losers with a drop of 22.06 per cent to close at N3.78. Costain West Africa declined by 16 per cent to 84 kobo. Trans Nationwide Express declined by 13.33 per cent to close at N1.17. Livestock Feeds dropped by 11.15 per cent to N2.31 while Fidelity Bank depreciated by N1.90 to close at N10.80 per share.

    Meanwhile, other low-priced stocks dominated the gainers’ list. RT Briscoe recorded the highest gain, in percentage term, of 20.24 per cent to close at N1.01 per share. Neimeth International Pharmaceuticals followed with a gain of 18.95 per cent to close at N1.13 while NPF Microfinance Bank rose by 18.80 per cent to close at N1.39 per share.

    Total turnover stood at 2.06 billion shares worth N17.18 billion in 25,577 deals last week in contrast with a total of 1.92 billion shares valued at N19.40 billion traded in 23,988 deals two weeks ago. Financial sector remained the dominant sector leading the activity chart with 1.61 billion shares valued at N9.90 billion in 14,438 deals. This represented 77.79 per cent and 57.63 per cent of the total equity turnover volume and value respectively. The conglomerates sector followed with a turnover of 214.68 million shares worth N1.580 billion in 1,604 deals. The third place was occupied by the consumer goods sector with 84.940 million shares worth N3.036 billion in 4,313 deals.

    The trio of United Bank for Africa Plc, Transnational Corporation of Nigeria Plc and Standard Alliance Insurance Plc were the most active stocks. The three stocks accounted for 670.96 million shares worth N2.31 billion in 3,133 deals, representing 32.51 per cent and 13.43 per cent of the total equity turnover volume and value respectively.

    Also traded during the week were a total of 2.942 million units of Exchange Traded Products (ETPs) valued at N70.679 million in 47 deals compared with a total of 408,933 units valued at N7.019 million traded in 30 deals in the previous week. Also, a total of 9,450 units of Federal Government bonds valued at N10.824 million were traded in nine deals compared with a total of 10 units of Federal Government bonds valued at N10,792.74 traded in the previous week.

    Analysts at Afrinvest Securities said the investors were becoming more cautious in the wake of slow first quarter earnings.

    “Although more first quarter 2015 corporate releases were posted during the week, investors’ reaction remained largely calm as most of the numbers posted were unimpressive,” analysts said. They noted that given the recent passive mood in the market, the market is expected to continue to trade sideways this week.

     

  • Zenith Bank’s board meets on earnings, dividends

    Zenith Bank’s board meets on earnings, dividends

    • Joseph Sanusi retires from Lafarge Africa 

    Directors of Zenith Bank Plc are scheduled to meet tomorrow to review the financial statements of the bank for the year ended December 31, 2014.

    The board meeting is expected to consider the statement of accounts, the balance sheet, the reports of the auditors and the audit committee and other statutory reports.

    The meeting is also expected to consider the appropriate dividend to be recommended for payment to shareholders for the 2014 business year.

    Key extracts of Zenith Bank’s interim report and accounts for the nine-month ended September 30, 2014 showed that net profit rose marginally to N71.1 billion in 2014 as against N67.3 billion recorded in the comparable period of 2013. Profit before tax had however declined to N86.8 billion as against N106.2 billion recorded in the third quarter of 2013. Gross earnings stood at N273.7 billion as against N255.2 billion in comparable period of 2013. Loans and advances rose to N1.53 trillion as against N1.11 trillion while total liabilities and equity increased to N3.4 trillion in third quarter 2014 as against N2.9 trillion recorded in the corresponding period of2013. Shareholders’ funds meanwhile rose from N482.5 billion to N523.9 billion.

    Meanwhile, the former governor of Central Bank of Nigeria (CBN), Chief Joseph Sanusi has retired from the board of Lafarge Africa Plc. Sanusi’s retirement was ratified at the company’s board meeting last Thursday. The company has not made any replacement for Sanusi, who was a non-executive director.

    The Nigerian stock market closed on the upbeat yesterday as investors looked ahead to impending release of full-year earnings of quoted companies. With 27 gainers to 10 losers, aggregate market value of all quoted companies rose to N9.999 trillion as against its opening value of N9.953 trillion. The All Share Index (ASI), the common value-based index that tracks prices of all quoted companies, also trended upward to 30,018.35 points from its opening index of 29,882.28 points. The uptrend moderated the negative average year-to-date return to -13.38 per cent.

    Aggregate turnover was above average with the exchange of 396.8 million shares valued at N3.81 billion in 4,892 deals.

    Seven-Up Bottling Company recorded the highest gain of N6.50 to close at N157.20. Lafarge Africa followed with a gain of N2.01 to close at N86. Guaranty Trust Bank rose by N1.02 to close at N21.51. Nestle Nigeria added N1 to close at N805 while UACN Property Development Company rose by 86 kobo to close at N9.99.

    On the other hand, Nigerian Breweries recorded the highest loss of N3 to close at N146. Forte Oil dropped by N1.60 to close at N221.45. Dangote Cement declined by 70 kobo to close at N157. Union Dicon Salt Plc slipped by 69 kobo to close at N13.11 while Unilever Nigeria dropped by 32 kobo to close at N34.08 per share.

  • Caverton raises dividend expectation over improved earnings

    The management of Caverton Offshore Support Group (COSG) Plc has expressed optimism that the aviation and maritime services provider would build on the momentum of its third quarter earnings to deliver better performance in 2014.

    Third quarter report of Caverton for the period ended September 30, 2014 showed that turnover rose by 31 per cent to N18.7 billion while operating margin improved to 23 per cent as against 10 per cent recorded in comparable period of 2013. Profit before tax rose from N2.5 billion in third quarter 2013 to N3.1 billion in third quarter 2014. Earnings per share stood at 56 kobo in 2014 as against 45 kobo in comparable period of 2013.

    Chief executive officer, Caverton Offshore Support Group, Mr. Bode Makanjuola said the directors of the company were confident that their cost control measures combined with the roll out of the company’s strategic growth plan have positioned it to improve profitability and create better returns to shareholders.

    According to him, the steady implementation of the company’s strategic plans is yielding good results as top-line growth was driven by growing demand for helicopter charters that complemented recurring revenues from fixed contracts.

    “As part of our strategic plan to diversify our income base, our plan in partnership with CAE to build and operate    the first aviation training centre and aviation maintenance, repair and overhaul services in Nigeria remain on course.  Furthermore, we shall continue to explore our options for opportunities to increase our market penetration in other sub-Saharan African countries,” Makanjuola said.

    He added that the company would continue to progress with its fleet expansion plans in the marine sector with the aim of supporting local and international oil and gas companies as they take their exploration and production activities further into the deep offshore.

    He reiterated the commitment of the company to achieving the national content development targets as more indigenous pilots, engineers and seafarers get the required training to enhance their competence.

    Makanjuola outlined some of the milestones behind the company’s performance to include the contract signed with CAE, a global leader in the provision of flight simulators to operate the first commercial aviation training centre in the sub-Saharan African region as well as the Caverton-RK -a joint venture between RKOffshore of Singapore and Caverton Marine Limited – which was awarded a contract to supply two Anchor Handling Tug supply vessels (AHTS) to Shebah Exploration and Production Company Limited (SEPCOL).

    Caverton is embarking on new business initiatives namely the Aviation Training Center (ATC) and Maintenance Repair and Overhaul (MRO) Facility. It will be recalled that at its last annual general meeting which was held in Lagos on June 5, COSG announced plans to build a 40,000 square metres facility at the Murtala Mohammed International Airport in Lagos for in-country training of pilots and engineers and aircraft maintenance, two areas that have serious implication for national capacity development, efficiency and safety in the aviation sector.

    In furtherance of this plan, on June 10 in Montreal, Canada, Caverton Helicopters signed a landmark agreement with CAE, a global leader in the provision of flight simulators, for training centre operation services at Caverton’s flight simulation training centre in Lagos. Expected to take-off next year, the facility will be the first commercial flight simulation training centre in Africa. CAE will provide a turnkey solution that will include the start-up, maintenance and operation of the centre for a specified period pending the full transfer of knowledge and skill-sets to Nigerians.

    Caverton transited fully into a publicly quoted company with the listing of its entire issued share capital on the Nigerian Stock Exchange (NSE) in May. Caverton listed 3.35 billion ordinary shares of 50 kobo each at N9.50 per share, which added N31.8 billion to the market capitalisation of the Exchange. Caverton was listed in the support and logistic subsector of the service sector in line with its core business of on-shore and off-shore logistics to oil and gas companies.

    On the heels of the listing, Caverton has won a two-year contract extension with Total Exploration and Production Nigeria Limited and is expecting a brand new AW139 helicopter which will be devoted to its long-term contract with Shell Petroleum Development Company.

  • Shell’s profit beats analyst’s estimates on higher gas earnings

    Shell’s profit beats analyst’s estimates on higher gas earnings

    Royal Dutch Shell (RDSA), Europe’s biggest oil company, reported first-quarter results, beat analyst’s forecasts on higher natural gas earnings. The shares rose the most in two years in London.

    First-quarter profit excluding one-time items and inventory changes slipped three per cent to $7.3 billion from a year earlier, The Hague-based Shell said today in a statement. That beat the $5 billion average estimate of 12 analysts surveyed by Bloomberg.

    The results included a record $3.3 billion “underlying earnings” from stronger liquefied natural gas operations, following acquisitions from Repsol SA and related businesses, Chief Financial Officer Simon Henry told analysts. “We saw strong LNG trading environment.” The earnings were partly offset by a $2.3 billion charge related to refineries in Asia and Europe, Shell said.

    Shell, which deploys about $80 billion of its capital in North America, has gained from fuel prices that have risen about 36 percent in the continent for the quarter. Chief Executive Officer Ben van Beurden, who took over from Peter Voser this year, in January made the company’s first profit warning since 2004, partly on unprofitable operations in the Americas.

    Shell Class A shares rose 2.9 percent to close at 2,347 pence in London, the biggest jump since April 26, 2012.

    “The new CEO set a multiyear journey at Shell to improve returns,” said Bertrand Hodee, an analyst at Raymond James Financials Inc. in Paris.

    The “results were surprisingly strong. A very good start for the year.”

     

  • Shell cites insecurity for loss in earnings, production

    Shell cites insecurity for loss in earnings, production

    Oil giant Shell Petroleum Development Company (SPDC) has explained that it suffered a loss last year because of insecurity in the Nigeria Delta.

    In its 2013 report, the Royal Dutch firm claimed that its upstream earnings and oil production as well as liquefied natural gas (LNG) equity sales volumes dropped following the worsening operating environment in Nigeria. It said production dropped in 2013 to 3,199,000 barrels equivalent per day (boe/d) from 3,262,000 (boe/d) in 2012.

    It said: “Compared with 2012, upstream earnings excluding identified items reflected higher exploration expenses, increased operating expenses, higher depreciation as well as lower liquids and LNG realisations. Earnings were also impacted by the deteriorated operating environment in Nigeria and the impact of the weakening Australian dollar on a deferred tax liability. This was partly offset by the contribution of Pearl gas-to-liquid (GTL), and higher gas realisations in the Americas.

    “Global liquids realisations were six per cent lower than in 2012. In Canada, synthetic crude oil realisations were seven per cent higher than in 2012. Global natural gas realisations were six per cent higher than in 2012, with a 27 per cent increase in the Americas and a three per cent increase outside the Americas.”

    Thefirm added: “2013 production was 3,199,000 barrels of oil equivalent per day (boe/d) compared with 3,262,000 (boe/d) in 2012. Liquids production was down six per cent and natural gas production increased by two per cent compared with 2012. The deteriorated operating environment in Nigeria impacted production volumes by some 50 thousand boe/d compared with 2012.

    “Excluding the impact of divestments, production sharing contract (PSC) price effects and the deteriorated operating environment in Nigeria, production volumes in 2013 were in line with 2012. Production volumes were impacted by higher maintenance and asset replacement activities.

    “New field start-ups and the continuing ramp-up of existing fields, in particular Pearl GTL in Qatar, contributed some 170 thousand boe/d to production in 2013.

    “Equity LNG sales volumes of 19.64 million tonnes were three per cent lower than in 2012, mainly reflecting lower volumes from Nigeria LNG due to reduced feedgas supply as a result of the deteriorated operating environment in Nigeria. Excluding the impact of the challenging operating environment in Nigeria, equity LNG sales volumes were in line with 2012”

    According to the report, the full year upstream earnings excluding identified items were $15,117 million compared with $20,107 million in 2012 reflecting a decline of $4,990 million. Identified items were a net charge of $2,479 million, compared with a net gain of $2,137 million in 2012, it added.

    The report showed that upstream earnings excluding identified items were $2,477 million compared with $4,401 million a year ago. Identified items were a net charge of $631 million, compared with a net gain of $1,801 million in the fourth quarter 2012.