The Nation Newspaper

Tag: earnings

  • Firm projects higher earnings

    AP. Moller-Maersk Group said it hopes to exceed its projected earnings for the year following good its performance in the second quarter.

    The company posted better-than-expected second-quarter profit, boosted by lower costs in its shipping unit. Second-quarter net profit was $856 million, higher than analysts’ projections of $545.79 million.

    Last year, the company’s net profit was $965 million and revenue was slightly lower than expected at $14.2 billion, down from $15.4 billion in the year earlier.

    The Chief Executive Officer, Nils Andersen, said: “We delivered a good operational result for the second quarter, thanks to improved performance in most of our businesses.

    “Maersk Line has made strong and consistent progress and is now an industry leader in terms of profitability. APM Terminals continue to deliver good results, and Maersk Drilling had its best quarter ever based on strong operational performance. Oil production was relatively low, but it has bottomed out now and will return to growth in the second half of the year.”

    He said the firm is considering the establishment of a fifth core business unit with a target of $0.5 billion by 2016, adding that increased profit was achieved across all businesses, except Maersk Oil and Damco as well as Maersk Tankers, which negatively impacted by impairments and provisions of $280 million related to Very Large Crude Carriers.

  • New earnings reports will drive equities, say experts

    Second quarter earnings reports would enliven equities and trigger a new level of bullish rally at the stock market, analysts have said.

    Against the downtrend that has pervaded the market in recent weeks, market pundits said the release of interim reports for the second quarter and first half of the year would spur the performance of the market.

    Analysts at Sterling Capital Markets and FSDH Merchant Bank said they expected the new earnings reports to moderate the bearishness and create new impetus for continuing market recovery.

    Post-listing rules at the Nigerian Stock Exchange (NSE) require that quoted companies should submit their reports, not later than three months after the expiration of the period. However, the NSE provides that where a filing due date falls on a weekend or holiday, the filing will fall due on the next business day.

    Economist and investment advisor, Sterling Capital Markets Limited, Sewa Wusu said the market could witness a rebound this quarter on the strength of earnings reports for the second quartear.

    According to him, half-year interim results of companies would be major catalysts for the market this quarter as investors seek to optimize their returns through bargain hunting.

    He also noted the lessening tension in the global economic outlook with recent improvement in the United States of America (USA)’s economy and positive signs that it may not drastically cut the stimulus that had supported liquidity.

    He however cautioned that Nigeria’s weakening macroeconomic indices may moderate performance of the market pointing out that declines in crude oil production and foreign reserves might tighten government’s revenue and hamper its role as provider of liquidity to the financial system.

    Analysts at FSDH said the unaudited results of quoted companies should drive equities performance noting that there are buy opportunities in the banking sub-sector of the equities market due to the fact that the sector is undervalued.

    In the first half, the Nigerian stock market recorded a six-month average return of about 28.8 per cent in the first half of this year, leaving investors with approximately N2.45 trillion in capital gains during the period.

    Notwithstanding the downtrend that characterized June, significant successive bullish rallies in previous months still left Nigerian equities as one of the best-performing market during the period.

    In value terms, the increase of N2.45 trillion in the first half has already surpassed total gains of N2.44 trillion recorded for the entire 2012. However, the real benchmark return of 28.80 per cent is some 6.65 percentage points below the average full-year return of 35.45 per cent recorded in 2012.

    Aggregate market value of all equities on the Nigerian Stock Exchange (NSE) closed the first half at N11.426 trillion as against its value-on-board of N8.974 trillion that started the year, representing an increase of 27.3 per cent. The All Share Index (ASI), which doubles as benchmark index for all equities on the NSE and country index for Nigeria, rose from 2013’s opening index of 28,078.81 points to close the first half at 36,164.31 points.

    The first half performance was moderated by the downtrend in the latter half of June, which saw the month closing as the most bearish month with a loss of N649 billion. Equities had shown brighter performance in the first five months with whooping capital gains of N3.10 trillion. Aggregate market capitalisation of all equities had closed May at N12.075 trillion while the ASI had indicated a five-month average return of 34.6 per cent. NSE’s data showed that the industrial goods stocks remained the best-performing subgroup during the first half.

    NSE Industrial Goods Index showed a six-month average return of 49.12 per cent. Ethical investors fared better as NSE-Lotus Islamic Index indicated a return of 42.31 per cent. NSE 30 Index, which tracks 30 most capitalised stocks, posted a first half return of 27.38 per cent. NSE Consumer Goods Index showed a return of 21.40 per cent. NSE Banking Index showed average return of 18.46 per cent while NSE Insurance Index indicated a return of 16.90 per cent. The NSE Oil and Gas Index showed that downstream investors recorded modest return of 12.18 per cent.

  • Vitafoam: Need to sustain growth earnings in 2013

    Vitafoam: Need to sustain growth earnings in 2013

    Vitafoam is one of the companies to watch for strong growth in earnings in 2013. The foam makers seem to have been sleeping since 2009 when its profits began a downward creep. Fiscal 2013 seems to be a year of waking up and stretching out for the company.

    The company’s first quarter operations ended well with sales revenue at N4.05 billion and net profit of N174 million. That yielded a net profit margin of 4.3%, which was much better than the net profit margin of 3.5% recorded at the end of its 2012 operations in September.

    Vitafoam’s second quarter operations for the period ended March 2013 shows an all-round improvement in key earnings indicators. Both revenue and profit growth accelerated during the period. Sales revenue came to N8.79 billion at the end of the second quarter, up by 15.4% from the corresponding quarter in 2012. Based on the second quarter growth rate, sales revenue is projected to stand at N18.3 billion for Vitafoam in 2013.

    The projected revenue will be an increase of 26.4% over the full year revenue figure in 2012. This will be a major growth in sales revenue compared to a marginal decline of 0.3% in 2013. Except in 2011 when turnover grew by 36.7%, sales revenue growth has been generally slow for the company in recent years. On the average, however, the company has maintained a good level of stability in earnings performance. In the past five years, it grew sales revenue by an average of 16.2%.

    A new strength in profit performance has accompanied the company’s improved sales revenue outlook for 2013. At the end of the second quarter, the company posted a net profit of N408 million, a rise of 16.9% over the figure in the corresponding period last year.

    If the current growth rate is maintained to a full year, the company is expected to post a net profit of N861 million. This will be a new peak in the company’s profit records and a big leap of 72.2% over the full-year profit figure in 2012.

  • Companies scurry to meet earnings reports’deadline

    Companies scurry to meet earnings reports’deadline

    Companies are stepping up arrangements for final board meetings for the approval of their audited report and accounts for year 2012, as the deadline for the submission ticks closer.

    The tempo of board meetings would increase as from tomorrow with at two firms scheduled to have their final board meetings on the earnings report and dividend recommendation for the 2012 business year.

    Market sources indicated that several companies are rounding off arrangements for final board meeting early next week to enable them meet the April 1, 2013 deadline for submission of audited report and accounts for the year ended December 31, 2012.

    The boards of Lafarge Cement Wapco Nigeria and Skye Bank Plc are scheduled to meet tomorrow to deliberate on the audited report and accounts for the year under review.

    Directors would at the meeting, consider probable dividend that would be paid to shareholders. Though the shareholders at the general meeting have the overriding power to approve or reject board’s dividend recommendation, the general meeting hardly overrides the board.

    Already, the board of Total Nigeria Plc has scheduled a meeting for Wednesday March 27, during which directors would deliberate on earnings and dividends.

    Market sources indicated that they expected the latter part of the month to witness influx of annual reports and dividend recommendations, given that compliance within deadline is a measure of good corporate governance.

    Post-listing rules at the Nigerian Stock Exchange (NSE) require that quoted companies should submit their reports, not later than three months after the expiration of the 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 business year thus terminates on December 31.

    NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year is March 31.

    However, the NSE provides that where a filing due date falls on a weekend or holiday, the filing will fall due on the next business day. March 31 falls on Sunday, thus the due date for the deadline will be April 1, 2013.

    Market analysts have attributed the seeming pause on market direction to the apprehensions over the earnings reports, noting that investors had expected that most large-capitalised companies would have reported their earnings and dividends by now.

    Only two companies- Nestle Nigeria and Nigerian Breweries; have so far reported their full-year earnings out of the hundreds of companies with Gregorian calendar business year.

    Managing director, GTI Securities, said investors had been valuing dividend expectations into their bid and sale orders.

    According to him, the marked improvement in the momentum of activities on stocks indicated investors’ perceptions of corporate potential for relatively high dividend yields and headroom for capital appreciation.

  • CBN: Fed Govt earnings hit N841.5b

    CBN: Fed Govt earnings hit N841.5b

    Federal Government earned N841.56 billion last November, the Central Bank of Nigeria (CBN) Economic Report has shown. This represents an increase of 3.8 per cent above the previous month’s level.

    The report showed that at N630.95 billion, gross oil receipts exceeded both the monthly budget estimate and the preceding month’s level by 14.1 per cent and four per cent, respectively.

    The apex bank attributed this to the rise in receipts from petroleum profit tax (PPT) and royalties. Non-oil receipts, stood at N210.61 billion, 17.3 per cent lower than the monthly budget estimates, but exceeded the receipts in the preceding month by 3.2 per cent.

    It said that Federal Government estimated retained revenue was N245.44 billion, while total estimated expenditure was N397.01 billion. The fiscal operations of the Federal Government resulted in an estimated deficit of N151.56 billion, as against the estimated monthly budget deficit of N94.68 billion.

    The end-period headline inflation rate (year-on-year) was 12.3 per cent, 0.6 percentage point above the level in the preceding month. Inflation rate on a twelve-month moving average basis was 12.1 per cent, compared with 11.9 per cent in the preceding month.

    According to the regulator foreign exchange inflow and outflow through the CBN were $4.27 billion and $3.84 billion, respectively, resulting in a net inflow of $0.43 billion. Foreign exchange sales by the CBN to the authorised dealers amounted to $1.64 billion, showing an increase of 13.8 per cent over the level in the preceding month.

    “Relative to the level in the previous month, the average naira exchange rate as against the dollar appreciated in the Wholesale Dutch Auction System (WDAS) segments by 0.01 per cent, but depreciated in the inter-bank and bureau-de-change segments by 0.2 per cent apiece,” the report revealed.

    However, non-oil export receipts declined by 30.50 per cent below the level in the preceding month due to the decline in agriculture, manufactured products and minerals sub-sectors. World crude oil output stood at 90.47 million barrels per day (mbpd), while demand was 90.01 mbpd, compared with 90.22 mbpd and 89.52. mbpd supplied and demanded, respectively, in the preceding month.

    According to the CBN, growth in the major monetary aggregate was modest at the end of the reviewed month. The CBN said available data indicated mixed developments in deposit rates, while maximum and prime lending rates trended upward. The value of money market assets outstanding increased, owing, largely, to the rise in the value of Federal Government bonds outstanding.

     

  • World Bank forecasts $20b agric earnings for Africa

    World Bank forecasts $20b agric earnings for Africa

    THE African continent would generate an extra $20 billion in yearly earnings if African leaders can agree to dismantle trade barriers that blunt more regional dynamism, the World Bank has said. It disclosed this in a report released on the eve of an African Union (AU) ministerial summit in Addis Ababa on agriculture and trade.

    In a statement, the bank said that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region.

    The report urged African leaders to improve trade so that food can move more freely between countries and from fertile areas to those where communities are suffering food shortages. “The World Bank expects demand for food in Africa to double by the year 2020 as people increasingly leave the countryside and move to the continent’s cities,” it said.

    According to the new report, Africa Can Help Feed Africa: Removing barriers to regional trade in food staples ¯ rapid urbanisation will challenge the ability of farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border.

    It said that countries south of the Sahara, could significantly boost their food trade over the next several years to manage the deadly impact of worsening drought, rising food prices, rapid population growth, and volatile weather patterns.

    With many African farmers effectively cut off from the high-yield seeds, and the affordable fertilizers and pesticides needed to expand their crop production, the continent has turned to foreign imports to meet its growing needs in staple foods.

    “Africa has the ability to grow and deliver good quality food to put on the dinner tables of the continent’s families. “However, this potential is not being realised because farmers face more trade barriers in getting their food to market than anywhere else in the world. Too often borders get in the way of getting food to homes and communities, which are struggling with too little to eat,” Makhtar Diop, World Bank Vice President for Africa said.

    The new report suggests that if the continent’s leaders can embrace more dynamic inter-regional trade, Africa’s farmers, the majority of whom are women, could potentially meet the continent’s rising demand and benefit from a major growth opportunity. It would also create more jobs in services such as distribution, while reducing poverty and cutting back on expensive food imports. Africa’s production of staple foods is worth at least $50 billion a year.

  • ‘Third quarter earnings will lift equities further’

    Amidst concerns about the sustainability of the bullish rally at the stock market, market pundits and analysts have said expectations of good third quarter earnings by quoted companies would give fillip to market recovery through to the last quarter.
    Major investment advisers and fund managers said the market was still skewed for upswing citing substantial undervaluation of several equities and good interim earnings reports by companies.
    Managing director, GTI Securities, Mr Tunde Oyekunle, said third quarter earnings reports would provide impetus for a new round of strong rally as investors anticipate better returns by the year-end.
    According to him, while equities have run creditably well in recent weeks on positive investors’ sentiments on returns prospects and valuations, third quarter earnings would enhance the market’s recovery.
    He noted that although profit-taking transactions may weigh in later this month, early results for the nine-month period ended September 30, 2012 which are expected in middle of next month would further wet investors’ appetite.
    Post-listing rules of Nigerian Stock Exchange (NSE) requires that audited annual accounts of companies should be submitted within three months after the year end while quarterly financial statements are expected to be made available 45 days after the end of the quarter.
    Regulatory filing calendar made available by the NSE indicated that companies are expected to have fully submitted their third quarter earnings report by Thursday, November 15, 2012.
    Managing Director, Financial Derivatives Company (FDC) Limited, Mr Bismarck Rewane, said the improving fundamentals of quoted companies should point to a higher market.
    According to him, several international investors are taking tentative positions in fundamentally strong companies ahead of the earnings season.
    He pointed out that banking, food and beverages, agriculture and brewery sectors hold greater prospects for returns to investors.
    Rewane predicted that the market would likely gain 5.0 per cent this month to sustain its month-on-month rally in this quarter.
    He advised investors to look out for three key variables of earnings growth, quality and sustainability of business model and valuation and versatility in determining the best stocks to pick.
    According to him, the most important attribute of a winning stock is its earnings growth profile while the quality of a company’s products, balance sheet and management as well as comparative valuation to its peers would complement the resilience of such stock in any market situation.
    He noted that in spite of the sustained rally witnessed recently which signaled the commencement of a bull rally, the Nigerian market remains the only one that has not recovered its losses as it is still some 60 per cent below its peak in 2008.
    Analysts at FSDH Securities said they expected that equities market would continue to receive positive investors’ sentiment as investors seek value in fundamentally strong stocks in the face of dwindling yields in the fixed income market.
    They noted that though there could be profit-taking transactions, there were still several stocks with fundamentals that can generate good returns.
    Analysts said they expected average return by equities to retain some additional gains by the end of this month, in spite of accumulated gains that may tempt investors to increase shares supply.
    The Nigerian stock market opened this week with average year-to-date return of 19.82 per cent.
    Although most analysts were still cautious about the short-term outlook of the market, they agreed that impressive third quarter earnings would significantly enhance the attractions of low-priced equities.
    According to analysts, with potential dividend yields on several stocks in double-digits, most discerning investors might find the stock market more attractive than largely single-digit offering of the fixed-income markets.