The Nation Newspaper

Tag: Profit

  • Ecobank profit rises as African lender continues cost cutting

    Ecobank Transnational Inc.’s first-half profit climbed 26 percent as Africa’s most geographically diverse lender maintained its efforts to curb expenses.

    Net income for the six months through June rose to $244 million from $194 million a year earlier, the Lome, Togo-based bank said in a statement published on the Nigerian Stock Exchange website . Revenue was little changed at $1.07 billion.

    “We continued to drive cost efficiencies in our businesses,” Chief Executive Officer Albert Essien said in the statement. Essien steps down in September and will be replaced by Ade Ayeyemi, CEO of Citigroup Inc. in sub-Saharan Africa.

    The pan-African lender has shares traded in Nigeria, Ghana and Ivory Coast and operates in 36 countries in the continent. Its cost-to-income ratio improved to 62.5 percent in the first half from 68.1 percent a year earlier. Total assets dropped 0.4 percent to $23.3 billion.

  • Delta Airlines reports $1b profit

    Delta Airlines reports $1b profit

    Delta Airlines  has  reported financial results for the June 2015 quarter, including adjusted net income of $1.0 billion or $1.27 per diluted share.

    The net income represents up 22  cent  from the June quarter of 2014.

    Its Chief Executive Officer,  Mr Richard Anderson, said this while giving details of the airline’s performance.

    He said :” Delta’s record results have allowed the company to invest in its employees through higher wage rates and profit sharing; improve the experience for our customers through new aircraft and innovative partnerships with global carriers; and uniquely deliver value for our shareholders by accelerating our capital returns while also paying down debt.

    “We have more work and opportunity ahead of us on all of these fronts as we continue to execute on our long-term plan.”

    Anderson continued: “Our significant fuel savings in the September quarter should allow us to produce another record quarter with more than 30 per cent growth, a 19 to 21 per cent  operating margin and $1.9 billion of operating cash flow.”

    Delta’s operating revenue for the June quarter increased one per cent, despite $160 million in foreign currency pressures which reduced unit revenues by approximately 2 points.  Passenger unit revenues declined 4.6 per cent  on a 3.9 per cent  decline in yields.

    Delta saw solid progress with several of its revenue initiatives, including Branded Fares, which increased passenger revenues by $56 million, and its enhanced agreement with American Express, which produced an incremental $60 million in revenue.

    “Our commercial initiatives continue to gain traction in the marketplace and we will produce summer margins in excess of any achieved in our history,” said Ed Bastian, Delta’s president.

    “However, unit revenue growth is an important component of our long-term plan to expand margins.

    “We continue to project flat system capacity growth for the fourth quarter of 2015 – a level in line with current demand expectations, which should put the business on the right trajectory to stem the erosion in unit revenues by the end of the year.”

     

     

  • ‘Retail banking’ll lead to profit’

    ‘Retail banking’ll lead to profit’

    Access Bank expects its retail banking business to turn to profit this year, contributing up to 10 per cent to profit before tax next year and 20 percent by 2018/19, Chief Executive Herbert Wigwe said.

    He said most of its 350 branches would make profit this year after it regained market share following the acquisition of rival lender Intercontinental Bank three years ago. “Before the end of 2018/19 we would see what would be a 20 percent contribution from retail,” Wigwe told Reuters in Lagos.

    However, he said the lender was cautious about creating risk assets this year and was targeting 10 percent loan growth due to domestic market conditions and high interest rates. It grew loans 20 percent last year.

    Two years ago, the top tier lender said it aimed to grow its customer base to between 15 million and 20 million across its African markets by 2018, from around six million, as it shifted its focus to retail banking.

    The bank, which jumped to fourth position out of 21 Nigerian lenders from ninth in 2007, said it expected to sign on two million customers and another two million through its cards product, Wigwe said.  Access Bank shares, which fell 24.2 percent last year, ended flat at N5. Wigwe said the bank successfully concluded a rights issue despite low sentiment in the stock market and foreign investors’ apathy due to worries over the naira currency amidst lower oil prices which slashed government revenues.

    He declined to give further details pending the approval of the offer by regulators. Access Bank launched a cash call last November to raise 68 billion naira from existing shareholders.

    Banks have been shoring up their balance sheets in preparation for the adoption of stricter international capital requirements, which would otherwise see capital ratios for most of them drop by between 100 and 400 basis points.

  • Protect environment, maximise profit, Emefiele urges agencies

    Protect environment, maximise profit, Emefiele urges agencies

    The Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, has appealed to its sister regulatory agencies in the financial service sector, to expand their areas of focus to cover environmental protection, as well as maximise profit and ensure Returns On Investments (ROI).

    Emefiele,  made the appeal yesterday while declaring open a workshop on sustainable finance for the Financial Sector regulatory bodies in conjunction with the United Nations financial initiatives.

    The CBN helmsmam, who was represented by his Special Adviser on sustainable banking, Dr. A’isha Usman Mahmood, advised leaders of financial regulating agencies, comprising the Director –General of Securities and Exchange Commsion (SEC)  Mounir Gwarzo, Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, Director-General PenCoM, Mrs. Chinelo Anohu-Amazu and others to adopt sustainable financial practices that will lead to economic development without negative costs to the ecosystem and future generations.

    According to Emefiele, “Sustainable Development concepts pursue a balance between environmental protection, social equity and economic development (ESDN, 2012).  As a result of the growing evidence on the positive nexus between Environmental and Social management and improved economic performance, an increasing number of financial institutions worldwide are adopting sustainable finance practices to ensure that economic development is not achieved at a cost to our ecosystem and our future generations”.

    The Nigerian financial sector he said has “developed and adopted the Nigeria Sustainable Banking Principles, which is an industry-led initiative needed to build a more resilient, robust, environmentally and socially responsible financial sector.” This development became necessary owing to the growing evidence that environmental and social issues present growing risks to economic growth.

    The CBN Governor re-echoed the United Nations Environment Program (UNEP, 2015) warning that “there is growing evidence that people are consuming far more natural resources than what the planet can sustainably provide.  With the global human population projected to reach 9.6billion by 2050, we will need three planets to sustain our way of life, if the current consumption and production patterns remain unchanged”.

    In her remarks, Deputy Head, UNEP finance initiative, Yuki Yusui lamented that “there is a huge funding gap. A lot of study by the United Nations and other agencies shows that we need trillions of dollars per year to invest in a green eco system and save the economy. We have a lot of people that should be out of poverty and the funding gap means that the financial sector needs to be involved to participate and channel the money from brown economy to green economy and regulators to play a bigger role.”

    She challenged financial regulatory agencies all over the world to “come out and stop just worrying about financial stability, hyper- inflation and now start working with other agencies on eco system development.”

  • AIICO records N3.2b profit

    AIICO Insurance Plc has recorded a profit before tax of N3.2 billion for year ended December 31, 2014 as against N1.2 billion loss recorded in the corresponding period of 2013, representing a 156 per cent increase.

    The company’s profit after tax also grew by 202 per cent from a loss position of N739 million in 2013 to N2.2 billion in the period under review.

    Gross premium written for the period grew to N33.6 billion representing 42 per cent growth compared to N23.6 billion, while underwriting profit increased by 91 per cent from N2.7 billion to N5.2 billion.

    The company’s total assets for the Group also grew by 38 per cent from N42 billion in 2013 to N58 billion in 2014.

    The Chairman of AIICO Insurance Plc, Chief Dr. Oladele Fajemirokun, at the 45th Annual General Meeting (AGM) of the company, promised that the company would sustain the momentum for profits and market leadership, by becoming a truly world class financial services group and economic powerhouse.

    The Managing Director, Edwin Igbiti, said the company’s financial performance was evidence of its people, a customer-centric culture and high corporate governance standards.

    Earlier, AIICO Board announced the appointment of Mr. Babatunde Fajemirokun as an Executive Director. He was until the the Chief Operating Officer (COO) of the company.

     

  • ‘How our profit margin improved’

    The Finance Director, Nigeria Breweries Plc (NBL) Mr. Mark Rutten has said most of the revenue gained by the brewer came as a result of low foreign exchange (forex) exposure based on the   local raw material content of their products.

    “Combined portfolio makes it possible to have a stable price as we have products at  every segment of the beer, stout and  malt market. Interestingly some people are moving from high priced brand to low priced ones and the variety of our products as a result of the combined portfolio gives all segment accommodation,” he said.

    Rutten said though competition is stiff, the consolidation undertaken by NBL with a brewer and preference for local raw materials, strategic support for research and development gave the firm an edge in the face of turbulent operating environment and occasioned by lack of parity in the forex market.

    NBL Managing Director, Mr. Nicolaas Vervelde, said the company increased its portfolio of brands last year with the addition of Ace Passion in addition to two-line extension of the Star brand that comprise  Star Lite and Star Radler.

    “Also in 2014 as a result of merger with Consolidated Breweries, 33 Export lager beer, William Dark Ale, Turbo King Dark Ale, more larger beer and two malt drinks, Maltex and Hi Malt together with Breezer, a blend of rum and fruits became part of the company’s products,” he said.

    Though the company recorded low growth in the 2014 financial year, it gained overall market share in Extra Larger Stout and Malt.

    He said: “We were successful in the year due to our large portfolio of  stout and malt. We removed unnecessary costs, reduced logistics cost and achieved cost leadership.”

    Vervelde, who attributed the marginal decline in profit to the socio economic impacts, explained that for decades, the company has been sourcing its raw materials locally.

    He said there are over 250,000 Nigerian farmers that are developing sorghum varieties, which indirectly and directly generates employments with local purchase supporting 85,000 jobs.

    According to him, the company, in conjunction with Heineken supply chain B.V. of Netherlands and other Heineken companies, is involved in activities aimed at development of new hybrid sorghum varieties with the potential of increasing the yield/output for sorghum farmers and improving the quality of sorghum malt, which is a major raw material input.

    He noted that two yielding hybrid sorghum varieties have been developed and registered by the company and the process of commercialising their production is on-going.

    He also added that the company has a subsisting consultancy agreement with a Nigerian professor on the development of sorghum seeds.

    “The company has entered into supply agreements with local cassava starch processors whose activities have impacted positively in the communities where they operate.

    “We have off-take arrangements with a  multinational company that has huge investment in sugarcane value chain. This is aimed at replacing imported sugar in our recipe with a local substitute,” he said.

    For the year under review, the company declared a profit after tax of N42.5 billion, a drop of 1.3 per  cent when compared to N43.08 billion recorded in the same period of 2013.

  • Etihad Airways records $73 million profit

    Etihad Airways has achieved its strongest financial results to date in 2014, posting a net profit of US$ 73 million on total revenues of US$ 7.6 billion, up 52.1 per cent and 26.7 per cent respectively over the previous year.

    The record performance, which marked the airline’s fourth consecutive year of net profitability, also saw earnings before interest and tax (EBIT) up 32.5 per cent to US$ 257 million.

    Earnings before interest, tax, depreciation, amortisation and rentals (EBITDAR) were up 16.2 per cent to US$ 1.1 billion, representing a 15 per cent margin on total revenues.

    Etihad Airways’ financial statements are audited by KPMG and are in accordance with International Financial Reporting Standards (IFRS).

    James Hogan, President and Chief Executive Officer of Etihad Airways, said: “Our shareholder has set a clear commercial mandate for this business and we continue to deliver against that mandate. Our focus is on sustainable profitability and our fourth year of net profits, at a time when we continue to invest in the new routes, new aircraft, new product and new infrastructure needed to compete effectively, shows we are serious about that goal.

    “Our performance in 2014 has cemented Etihad Airways’ position as a best-in-class, profitable and self-sustaining international airline. We have continued to grow, not just in size, reputation and performance, but also in maturity, evolving from an airline to a diverse global aviation and tourism group. This has been achieved through a unique strategy that combines industry-leading organic growth with wide-ranging partnerships and minority equity investments in other airlines around the world.”

    Etihad Airways carried a total of 14.8 million passengers in 2014, an increase of 22.3 per cent year-on-year. Revenue Passenger Kilometres (RPKs) – measuring passenger journeys – increased by 23.6 per cent to 68.6 billion (55.5 billion), while Available Seat Kilometres (ASKs) – representing capacity – grew by 21.8 per cent to 86.6 billion (71.1 billion). The growth in passenger demand and revenue over the 12-month period continued to outstrip Etihad Airways’ capacity increase, highlighting the strength of its long-term growth strategy.

    Passenger numbers were strengthened by the continued enhancement of Etihad Airways’ global network last year.

     

     

     

  • 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.

  • Ecobank grows net profit by 179%, declares one for 15 bonus

    The board of directors of  Ecobank Transnational Inorporated (ETI) Plc has recommended a bonus issue of one share for every 15 shares already held by shareholders as return for the immediate past business year ended December 31, 2014.

    The bonus recommendation came as the financial services group announced that its net profit rose by 179 per cent in 2014. Key extracts of the audited report and accounts showed that net profit after tax jumped to N65.68 billion in 2014 as against N23.57 billion recorded in 2013. Pre-tax profit rose by 144 per cent from N35.37 billion to N86.44 billion. Gross earnings had grown by 19 per cent from N319.56 billion in 2013 to N379.32 billion in 2014.

    Further analysis showed that the total assets of the group grew by 25 per cent to N4.50 trillion in 2014 compared with N3.6 trillion recorded in 2013. Loans and advances also improved by 25 per cent from N1.82 trillion to N2.29 trillion. Customer deposit increased by 23 per cent to N3.24 trillion in 2014 as against N2.63 trillion in 2013. Total shareholders’ funds jumped by 45 per cent to N493.02 billion in 2014 as against N341.01 billion in 2013.

    Group chief executive officer, Ecobank Transnational Incorporated (ETI), Albert Essien said the performance in 2014 was a great example of the benefit of the group’s diversified business model.

    According to him, in what was a tough operating environment, the group remained focused on the importance of serving the financial needs of its customers across Middle Africa. He noted that the group grew customer loans by $890 million or eight per cent, and deposits by $947 million or six per cent, particularly in core current account deposits, despite the adverse impact of dollar’s appreciation to the group’s key functional currencies.

    He said all geographic clusters increased revenues higher than operating expenses and improved their cost-income ratios while the group further strengthened its capital base with group-wide Tier 1 capital increasing of approximately $981 million. The group Tier 1 capital ratio was 18.3 per cent as against 13.0 per cent in the prior year and total capital ratio was 20.4 per cent.                             “Going forward, we remain confident in the prospects for growth in Africa and in our dedicated staff, and are positioning the company for long-term success to achieve outstanding results for all our stakeholders, “ Essien said.

    Ecobank recently signed a one-year senior unsecured loan facility of $50 million arranged by Deutsche Bank AG. The facility will be used for general corporate purposes. The new $50 million loan facility brought total funding arranged by Deutsche Bank to $250 million. ETI had successfully raised $200 million loan facility from Deutsche Bank in December 2014.

    Altogether, in recent months, Ecobank had raised approximately $1 billion in combined equity and debt capital for its parent company and its businesses in Nigeria, the largest of the group’s affiliates.

    ETI had in December 2014 signed a loan facility agreement with the European Investment Bank (EIB). The dollar-denominated loan facility agreement involved $100 million and will have a tenor of seven year.

    Ecobank plans to use the loan to provide some of its subsidiaries with additional lending capacity as well as finance some of its group strategic capital expenditures.

    The loan deal, according to the group, also demonstrated its commitments to contribute positively to the African economy by increasing the levels of credit available to businesses while at the same time generating long-term value for its shareholders.

    Essien said the group would use the fund to consolidate its operations across Africa.

    “This funding continues our relationship with the European Investment Bank. It will allow us to continue to consolidate our expanded operations and translate our scale and geographical footprint into added value for our customers. We shall use the financing to maintain credit provision in key economies in Africa thus contributing to the development of the continent,” Essien said.

     

     

  • Computer Warehouse Group’s profit drops by 91%

    Computer Warehouse Group (CWG) Plc witnessed major slowdown in performance in 2014 as revenue and profit dropped by 26 per cent and 91 per cent.

    Audited report and accounts of CWG for the year ended December 31, 2014 showed a top-down decline in the performance of the company. Turnover dropped from N20.67 billion in 2013 to N15.36 billion in 2014. Gross profit also dipped to N3.05 billion as against N3.91 billion.

    Profit before tax dropped by 90.7 per cent from N618.46 million in 2013 to N57.64 million in 2014. Profit after tax slumped by 91.4 per cent from N612.85 million in 2013 to N52.80 million in 2014. Earnings per share thus dropped from 24 kobo to 2.0 kobo.

    The board of directors of the company said the earnings shortfalls were principally driven by one-off provision for currency depreciation of not less than N380 million. In a statement, the directors said the currency depreciation was due to exemption of the group from participating in the official foreign exchange market, where it hitherto sourced Dollars for its imports.

    The noted that the situation may continue to impact the company warning that the fluctuations may persist.

    “Shareholders and potential investors are advised to note that exchange rate fluctuations are expected to persist in 2015. In addition, the ongoing electoral processes scheduled to be completed by second quarter 2015, are also expected to take significant toll on macroeconomic indices, with resulting impact on business operations for the remaining part of the year,” the company stated.

    CWG however expressed optimism that it expects improved performance on the back of its current CWG2.0 initiatives, which are expected to significantly reduce the company’s exposure to foreign components for its services.

    Audited report and accounts of CWG for the year ended December 31, 2013 had shown that turnover rose from N18.76 billion in 2012 to N20.67 billion in 2013. Gross profit increased from N3.75 billion to N3.91 billion. Profit before tax rose to N618.46 million as against N339.23 million while profit after tax increased from N339.23 million to N612.85 million. The company had paid a dividend per share of 8.0 kobo.

    The performance in 2014 fell below analysts and management’s projections. The management of the company had outlined that turnover could rise to N16.5 billion by the end of 2014 as the company moves to consolidate the income streams from its traditional business.

    In a review of the business outlook of the company, Chief Executive Officer, Computer Warehouse Group (CWG) Plc, Mr Austin Okere, said the company plans to optimise and recognise revenues from its traditional brick and mortar business which shall see a 46 per cent increase in revenue in the fourth quarter to close 2014 at about N16.5 billion.

    Okere, who founded CWG, said the company could end the year with a net profit of N300 million, some 61 per cent increase on its third quarter performance.

    According to him, the group has made great strides in the introduction of its new subscription based business lines and its profit outlook is a reflection of continuing improvement in margins driven by greater efficiency and good focus on the growth of managed services.

    “The company is firmly focused on scaling her new subscription businesses, under the CWG 2.0 umbrella, in order to see a change in the profitability trend by half of 2015,” Okere said.

    He outlined that the first among these new businesses is the SMERP, a cloud based ERP product that is ready for roll out and is currently being tested by a few organisations while there are also on-going discussions with multilateral organisations that are focused on SMEs and inclusive growth in Nigeria to collaborate on the roll out of this product.

    He added that there is also the flagship e-commerce technology platform, Openshopen.ng, a  product, that has been running a beta test with a few organisations, with the plan for a mass rollout in the first quarter of 2015.

    “There is also the free to air services which the group will be offering in collaboration with the second largest satellite provider in Europe. This service would launch with 30 TV channels and is planned to be launched in quarter 4, this year. CWG’s smart grid solution to Electricity distribution Companies (DISCOS) is at POC stage with two of the largest Discos in Nigeria and we expect that this new line of business will be at implementation stage by Q3 2015,” Okere said.

    According to him, CWG will continue to focus in growing the brand through initiatives directed towards empowering the African entrepreneur.

    “The declining sale is partly reflective of some changes in procurement pattern for ICT goods generally.  As part of seeking efficiencies in ICT procurements, users’ procurement processes are increasingly stretched, to find best value from competing offers,” he said.

    He said in spite of the challenges, the financial position of the group remains strong with adequate liquidity, leverage and efficiency ratios.