Standard Chartered Plc has released its results for the year ended 31 December 2018. The bank’s operating income stood at $15 billion, representing an increase by five per cent, while its Risk Weighted Assets (RWAs) down by eight per cent.
The result showed that the bank’s broad-based by product, with transaction banking growth was particularly driven by cash management which grew by three per cent. Similarly, net interest income increased by eight per cent and the net interest margin improved three basis points to 1.58 per cent.
“We have made tremendous progress securing the foundations of the business since 2015, resulting in a third successive year of underlying profit growth. “Our refreshed priorities announced today will help realise the true value of the franchise. We will measure this not only in monetary terms with double-digit equity returns and significant shareholder distributions targeted by 2021, but also in the positive impact to our clients, stakeholders and communities.
“We are determined to drive commerce and help our clients achieve prosperity, while doing everything that we can to make the world a cleaner, safer and more sustainable place,” bank’s Group Chief Executive, Bill Winters said in a statement obtained yesterday.
The results also showed significant improvement in profitability driven by higher quality income growth with cost and asset origination discipline. The Group delivered $3.2 billion in gross cost efficiencies, exceeding the target it had set in November 2015. The UK bank levy was $324 million; in 2021 it would be chargeable on only the Group’s UK balance sheet.
Its asset quality also improved due to a continued focus on higher quality origination within a more granular risk appetite, while its credit impairment of $740 million was 38 per cent lower. Meanwhile, Standard Chartered Plc has announced refreshed strategic priorities that build on the significant progress made by the bank over the last three years.
The refreshed priorities and related actions are expected to deliver a return on tangible equity (RoTE) of at least 10 per cent for the bank by 2021 and generate significant surplus capital that is intended to be distributed to shareholders if not deployed to fund additional growth. The refreshed priorities focus on investing to accelerate growth in the Group’s differentiated network and affluent client businesses, optimising performance in lower-returning markets, driving productivity, and building on existing digital credentials to innovate.
These actions would position Standard Chartered as the leading bank for clients based or doing business in Asia, Africa and the Middle East. The Refreshed actions and priorities for 2019 to 2021 includes to invest to accelerate growth in our differentiated international network and affluent client businesses; eliminate residual drags on returns from low-returning markets, including India, Korea, the UAE and Indonesia; streamline operations to enhance client satisfaction and drive productivity; and embrace digitisation and partnerships to reinforce competitive advantage and profitably disrupt
It also embeds a performance-orientated and innovative culture emphasising conduct and sustainability. Winters, was quoted in a separate statement to have said: “Over the last three years we have fundamentally overhauled the bank. It is now a solid platform off which we can grow profitably and sustainably to deliver a double-digit return on tangible equity by 2021.
“We will achieve this through relentlessly focusing on where we have a distinct competitive advantage, attacking the residual causes of lower returns and ramping-up innovation and productivity. “We view the profound technology-driven changes in banking as an opportunity: we are big enough to be relevant to our most complex clients and partners, yet nimble enough to be a profitable disrupter.”
Dangote Cement Plc Wednesday announced its audited results for the year ended December 31, 2018, showing a revenue of N901.21 billion.
Its Nigerian operations accounted for N618.30 billion, representing an increase of 11.9 percent over N552.36 billion in 2017.
Pan-African operations recorded revenues of N263.26 billion, an increase of 9.6 percent over N258.44 billion posted in the corresponding period in 2017. Profit after tax stood at N390.32 billion, up from N204.25 billion while earnings per share rose from N11.65 to N22.83. The company directors are proposing a dividend of N16 per share.
A further analysis of the performance showed that Dangote Cement maintained its dominance of the Nigerian market, accounting for 65 percent of the total volume sold in the domestic cement sector in 2018. The company also exported 800,000 metric tonnes (MT) of cement to West African countries, strengthening Nigeria’s position as a cement exporting country, creating jobs in the economy, and earning foreign exchange.
Dangote sold a total of 23.54 MT of cement across Africa indicating an increase of 7.4 per cent over 21.92 MT sold in 2017. Nigerian operations accounted for 14.18 MT representing an increase of 11.4 per cent over the volume of 12.72 metric tonnes sold during the preceding year. The increase in the Nigerian volume is attributable to higher building activities as the economy recovered from recession.
The sales volume in Nigeria is quite significant given the turbulent marketsituation as the election period approached and people usually hedge in the construction industry during such periods.
Commenting on the results, Group Chief Executive Officer, Dangote Cement, Joe Makoju, said: “This is a record financial performance by Dangote Cement, driven by a strong increase in our home market, Nigeria, despite heavy rains and uncertainties about the election. Although Pan-African volumes were unchanged in 2018, I am confident that we will see an increase in 2019, driven by higher volumes in Tanzania, Ethiopia, Congo and Sierra Leone. Now that we have gas turbines operating in Tanzania we will also see increased profitability in the Pan-Africa region and this will help to improve overall Group margins.”
Dangote Cement is Africa’s leading cement producer with nearly 46metric tonnes per annum (mtpa) capacity across Africa. It is a fully integrated quarry-to-customer producer, with a production capacity of 29.3mtpa in the home market, Nigeria. The Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.3 mpta of capacity across four lines; Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12 mtpa, while Gboko plant in Benue state has 4mpta.
Zenith Bank Plc last week became the first lender to announce its audited financial results for the year ended December 2018. The bank showed significant resilience, ending the year with higher bottom-line and delighted shareholders with high dividend. According to the results, gross earnings stood at N630.344 billion compared with N745.189 billion in 2017. It grew its net interest income and operating income by 15 per cent and eight per cent respectively as it was able to ensure improved cost efficiencies across the business. This focus on cost efficiencies is yielding tangible benefits as the group recorded its lowest ever cost-to-income ratio at 49.3 per cent from 52.8 per cent in 2017. Net interest income improved to N295.594 billion compared with N257.991 billion in 2017.
The bank’s risk-centric approach also ensured that cost of risk reduced significantly from 4.3 per cent in the prior year to 0.9 per cent in 2018. This was reflected through the major drop in impairment charges by 81 per cent, from N98.29 billion to N18.372 billion. In the same breadth, coverage ratio increased by 34.2 per cent from 143.4 per cent to 192.4 per cent over the same period, reflecting a prudent disposition to credit risk management. Cost of funds also moved in the positive direction, declining by 41 per cent from 5.2 per cent in 2017 to 3.1 per cent for the year, supported by a 33 per cent decrease in interest expense over the same period, demonstrating a robust treasury and liquidity management. As a result, profit before tax (PBT) rose by 16.2 per cent from N199.319 billion to N231.685 billion, while profit after tax (PAT) grew by 11.3 per cent to N193.424 billion from N173.791 billion in 2017.
According to the bank, record PBT was achieved through the group’s optimisation of its cost of funds, cost-to-income ratio and cost of risk, ensuring that earnings per share strengthened by 11 per cent to N6.15. Based on the improved performance, the directors have recommended a final dividend of N2.50 per share which in addition to the N0.30 per share paid as interim dividend amounts to N2.80 per share, compared to N2.70 in 2017.
Customer deposits grew by seven per cent led by an increase ofN109 billion in savings and an increase of N122 billion in current accounts providing it with a platform to rebalance its deposits mix. Zenith Bank explained that in 2018, expensively purchased deposits were foregone in favour of cheaper and more stable deposits resulting in a reduction of expensive and shorter dated deposits by N110 billion. On the asset front, this increased by six to close the year at N6 trillion.
Also, the group’s efforts to deepen its roots in the retail segment have started yielding benefits. This has resulted in a remarkable increase in the volume of transactions across various electronic platforms as well as significant customer acquisitions. This growth in transactions on its digital channels continues to support its retail push as fees from e-products increased by 44 per cent over 2017 with retail deposit balances also growing by 25 per cent. The bank’s balance sheet remains shockproof as loan to deposit ratio, liquidity ratio and capital adequacy ratio were 44.2 per cent, 72 per cent and 25 per cent respectively and all above the regulatory threshold.
Management’s outlook is positive for 2019, supported by a fairly stable inflation rate, converging foreign exchange market and near target oil production. The Group will continue its investment in the retail segment of the market to consolidate its leadership position in both the retail and corporate segments while it maintains its shock proof balance sheet.
Consistent with this superlative performance and in recognition of its track record of excellent performance, the bank was recently ranked as the Most Valuable Banking Brand in Nigeria in 2018, by The Banker Magazine. Also, Zenith Bank was recognised as the Best Corporate Governance Bank in Nigeria by The World Finance for the sixth time just as Ethical Boardroom, a Europe based Boardroom watchdog reaffirmed this recognition by naming the bank as the Best Bank in Corporate Governance in 2018.
In addition, the bank was recently named as the Best Institution in Sustainability Reporting in Africa 2018 (SERAS Awards) and the Bank of the Year 2018 (BusinessDay). Zenith Bank Plc became the first Nigerian bank to successfully integrate and launch Unstructured Supplementary Service Data (USSD) payments on Point of Sales (USSD on POS), enabling customers to pay for goods and services via POS terminals in merchant locations or on ecommerce websites without the use of cards.
The innovative payment solution, which is powered by CoralPay, allows Zenith Bank customers to use the *966# Eazy Banking (USSD) to pay for goods and services on POS terminals in merchant locations or on ecommerce websites through the generation of a payment code on the POS terminal which is then confirmed by the customer using their USSD pin. Commenting on the launch of the new payment solution, the Group Managing Director and Chief Executive Officer of Zenith Bank Plc., Mr. Peter Amangbo, noted that the bank had always been at the vanguard of technological innovations geared towards creating value for its customers.
“This solution is an exciting and highly innovative initiative in promoting financial inclusion, facilitating payments by customers either remotely in the comfort of their homes/offices or at merchant locations without the use of a payment card. With this solution, customers in remote locations plagued with challenges of poor Internet access can now carry out transactions easily using their feature phones,” Amangbo said.
Analysts’ assessment Assessing the results, analysts at WSTC Securities Limited, said gross earnings declined due to seven per cent and 30 per cent recorded across interest and non-interest income, respectively. They explained that interest fell as a result of lower interest accruing from loans and advances and treasury bills.
“ While we attribute the decline in interest income from loans and advances to management risk aversion to risk assets which saw loan books shrunk by 10 per cent, management blamed the decline to early repayment of short-term borrowings (bank overdraft facilities) as customers lean towards longer-term loans. “Also, we noted a decline in interest from treasury bills despite the increase in value by seven on account of lower yields on government securities during the reporting period which has declined by 600bps relative to 2017 levels,” they said.
However, the analysts added that on the flip side, interest expense declined faster than interest income by 33 per cent from N216.6 billion to N144.5 billion in 2018 mainly driven by the sharp decline of 61 per cent recorded in interest on time deposits from N108.7 billion to N42.3 billion in 2018 as well as a surge of 28 per cent on customers savings deposits, reaffirming management strategic shift from expensive to cheaper deposit mix.
“As a result, net interest income rose by 15 per cent from N258 billion to N295.6 billion leaving the net interest margin flat at nine per cent. Cost of funds for the period eased by 210 basis points (bps) from five per cent in 2017 to three per cent in 2018,” they added. WSTC Securities noted that Zenith Bank recorded a significant decline of 81 per cent on its impairment loss charged for the period due to the enhanced assets quality on the back of the impact of IFRS 9 implementation on its 2018 opening balances. According to them, on the expense front, the aggregated operating expense for the group rose slightly by one per cent despite the 12 per cent increase in AMCON levy from N25.6 billion to N28.5 billion.
On the strength of lower interest expense and impairment loss charged for the period, the cost-to-income ratio for the group declined from 53 per cent to 49 per cent. Consequently, PBT rose by 16 per cent from N199.3 billion to N231.7 billion, while PAT settled at N193.4 billion, an 11 per cent increase from N174 billion in 2017.
Recommendation WSTC Securities said despite the challenging macro-environment, Zenith Bank remain resilient in maximising value for its stakeholders. In their recommendation, they said: “We expect the cost optimisation strategy of the company to continue to support the company’s profitability even as it deepens root in the retailing segment of the business.
“Also, we expect the group to leverage the improving macro environment to drive loan growth, thus impacting on future performances. We have a revised forward EPS of N6.29 and a fair value estimate of N34.82. “At the current market price of N25.30, the stock is trading at a discount of 37.63 per cent to our fair value estimate. Thus, we revised our recommendation on the stock to a buy.”
The Nigerian equities market closed negatively last week following investors’ reaction to the postponement of general elections and profit taking. The market had maintained a positive performance since the beginning of February as investors were hopeful that the political risk would be reduce after the elections on February 16. The market rallied 6.6 per cent within two weeks, rising 3.7 per cent the previous week.
However, the postponement of the elections last week affected demand for shares as investors remained on the sidelines while others locked in profits.
Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 0.61 per cent to 32,515.52, while market capitalisation closed lower at N12.126 trillion. Similarly, all other indices finished lower with the exception of the NSE ASem, NSE Banking, NSE Insurance NSE-AFR Bank Value and NSE Oil/Gas indices which rose by 0.96 per cent, 0.68 per cent, 0.02 per cent 0.95 per cent and 0.13 per cent respectively.
According to Afrinvest (West Africa), at the start of the week, investors reacted negatively to the postponed presidential election before recalculating the political risk and subsequently re-positioning in bellwethers on Tuesday.
“We had anticipated the market to maintain a positive position till Friday based on improved sentiments on Tuesday, but this was short-lived as we observed more cautious trading in terms of volumes and higher sell-offs before the close of the week. We believe most investors stayed on the sidelines during the week as the uncertainty regarding the elections heightened by mid-week,” Afrinvest said.
Market operators had said the postponement was not good for the stock market. For instance, Chairman of Association of Stockbroking Houses of Nigeria (ASHON), Partick Ezeagu said the postponement led to more uncertainty in the stock market in particular and economy in general.
According to him, uncertainty is the greatest phobia that afflicts any market and even more applicable to the capital that is very sensitive to uncertainty in the political fate of a sovereignty.
“The delay in the conduct of our national election and the fact that it happened less than six hours before the election was to commence, investors will react negatively unless a very credible reason is adduced and effectively disseminated urgently,” Ezeagu had said.
Similarly, the Group Chief Executive Officer of Emerging Africa Capital Group, Mrs. Toyin Sanni, had said the postponement lengthened the waiting time for investors who had already adopted wait and see approach to prospects of investing in Nigeria.
“In investments, the longer the waiting time for any outcome, the higher the perception of risk. Also, the postponement indicates that we may not as a country have all our act all together thus increasing concerns about the possibility of the election process being smooth and hitch free,” she had said.
Sanni had added that the development could also raise, in some quarters, fears that the process itself may be being manipulated.
“Anything that reduces the perception of transparency affects our attractiveness and credibility and investment destination,” she said.
Another stockbroker, Mr. David Adonri of Highcap Securities Limited, had also said the postponement of the election at the dying minute was an insult to the electorate.
“Every sector of the economy including the capital market will be disastrously affected. It will further erode investor confidence, which is already at a low ebb,” Adonri said.
Also, Mr. Sola Oni of Sofunix Investment, said the postponement is a sad commentary that will deepen Nigeria’s political risk with dire consequences on investment decision.
“The shock caused by the announcement may jolt foreign portfolio investors who have been apprehensive of the presidential election . It is not unlikely that trading on the stock market may be moderated by this development as it is capable of further eroding investor confidence in our market. Every political decision has direct or indirect impact on the financial market. I think the time has come for our leaders to stop making Nigeria a laughing stock before the international community,” he said.
However, Garba Kurfi of APT Securities and Funds Limited said the postponement may not have much negative impact on the market given the growth the market has recorded in the last two weeks.
“Although it has a cost to the economy but may not affect our market due to expectations of companies’ results which have started coming into the market. We are expecting the market to continue to rise in anticipation of good results to be declared by companies,” he said.
But despite the announcement of corporate earnings with dividends last week, most investors remained on the sidelines, leading to a decline in the market.
Apart from the decline in the NSE ASI, market turnover also declined last week as investors traded 1.481 billion shares worth N17.647 billion in 20,449 deals, down from 2.834 billion shares valued at N28.138 billion that exchanged hands two weeks ago in 28,739 deals.
However, the Financial Services Industry remained the most active recording 1.038 billion shares valued at N10.170 billion traded in 12,232 deals, thus contributing 70.07 per cent and 57.6 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 193.204 million shares worth N306.521 million in 1,330 deals. The third place was Consumer Goods Industry with a turnover of 72.042 million shares worth N4.381 billion in 2,990 deals. Trading in the top three equities namely, Transnational Corporation of Nigeria Plc, Sterling Bank Plc and Access Bank Plc accounted for 421.500 million shares worth N1.274 billion in 2,979 deals.
Also traded during the week were a total of 23,701 units of Exchange Traded Products (ETPs) valued at N3.020 million executed in four deals compared with a total of 1.271 million units valued at N9.782 million that was transacted the previous week in seven deals. A total of 5,845 units of Federal Government Bonds valued at N6.158 million were traded last week in 18 deals compared with a total of 1,460 units valued at N1.472 million transacted two weeks ago in nine months.
Price Gainers and Losers
Meanwhile, 34 equities appreciated in price during the week, lower the 60 in the previous week, while 38 equities depreciated in price, higher than 21 equities of the previous week. Japaul Oil & Maritime Plc led the price gainers with 25 per cent, trailed by Associated Bus Company Plc with 23.8 per cent. Ikeja Hotel Plc garnered 13.6 per cent, just as MCNichols Plc and Dangote Flour Mills Plc 13.3 per cent and 9.8 per cent respectively.
Other top price gainers included Beta Glass Plc(9.2 per cent); The Initiates Plc (8.9 per cent), UACN Property Development Company Plc (8.3 per cent) and Oando Plc (8.3 per cent).
Conversely, Livestock Feeds Plc led the price losers with 19.4 per cent, followed by Wema Bank Plc with 18.4 per cent. Vitafoam Nigeria Plc and Transcorp Plc shed 16.3 per cent and 15.2 per cent in that order. Unity Bank Plc and Neimeth International Pharmaceuticals Plc 13.1 per cent and 12.8 per cent in that order.
Other top price losers include: Linkage Insurance Plc (10 per cent); C & I Leasing Plc (9.8 per cent); Cadbury Nigeria Plc (9.5 per cent); International Breweries Plc (9.4 per cent).
Fidson Healthcare Plc will begin shopping for N3 billion from existing shareholders from March 6, 2019. The healthcare firm would be offering 750 million shares of 50 kobo each at N4.00 per share to existing shareholders on the basis of one new share for every two shares already held. The company had planned to raise N4.5 billion through the issuance of 900 million shares at N5.00 per share on the basis of three shares for every five shares already held.
However, the company got the approval of Securities and Exchange Commission (SEC) to reduce the size of the issue to 750 million ordinary shares of 50 kobo each at N4.00 per share on the basis of one new ordinary share for every two ordinary shares held as at Friday, December 28, 2018.
In notification to the market operators yesterday, the Nigerian Stock Exchange (NSE) said the rights issue will open on March 6 and close on April 9, 2019.
Shareholders of Fidson Healthcare had in 2017 approved a plan by the company to raise N6 billion in new capital to boost its working capital and support its expansion plan.
The shareholders had also increased the authorised share capital of the company from N1.2 billion to N1.5 billion by the creation of additional 600 million shares of 50 kobo each. According to the company, the new capital would be used to boost working capital that had been negatively impacted by the depreciation of Naira.
The company had also explained that its new factory that came on stream at the tail end of 2016 needed additional capital to realise the full potential and utilise the new factory to full capacity.
Fidson Healthcare had recorded improved performance for the 2017 financial year as revenue grew by 84 per cent to N14 billion, from N7.6 billion in 2017. Profit before tax rose from N443 million in 2016 to N1.57 billion in 2017.
Hence, the board of directors of Fidson Healthcare recommended a dividend of 20 kobo per share, which was 300 per cent higher than five kobo that paid the previous year.
Meanwhile, trading at the stock sustained its positive trend as the NSE All-Share Index rose 0.64 per cent to close at 32,614.05, while market capitalisation added N77.5 billion to be at N12.2 trillion. Also activity strengthened as volume and value traded advanced 22.4 per cent and 35.6 per cent to 442.8m units and N5.6bn respectively.
Returns on investments in the stock market come in two major forms. It comes either in the form of capital appreciation or dividend pay-out. Capital appreciation occurs when the price of a stock rises and this can happen at any time of the year. On the other hand, dividend benefit comes when companies record profit and part of it is shared among the shareholders. And this occurs at the end of every financial year.
Hence, most investors look towards the end of the financial year of companies with high expectations and enthusiasm. That time is here again as companies announce their financial performance for the year ended December 31, 2018.
Analysts’ Projections As the results begin to pour in, analysts at Vetiva Capital Limited have projected mixed fortunes for investors. According to Consumer Goods Analyst at Vetiva, Ifedayo Olowoporoku, “Driven by the seasonal nature of the industry, we expect stronger topline performance across consumer goods companies for the fourth quarter period, majorly supported by volumes amid stronger consumption levels in the festive period and also mildly buoyed by stronger commercial activity during electioneering season.”
Expatiating on the impact of the aforementioned factors, Olowoporoku, said: “For the full year (FY) 2018 period, however, we expect mixed performance across the top names in the market, with weaker profits to be reported by the brewers, food commodity and agro-allied producers, while much stronger bottom line figures are projected for the packaged foods and home and personal care players.”
Speaking on the Industrial Goods sector, Onyeka Ijeoma said: “We expect volumes to come in slightly weaker in the final quarter of the year, pressured by extended heavy rainfall in fourth quarter (Q4) as well as a heightened political environment.”
Although that profits in Q4’18 are expected to come in lower quarter on quarterq/q, the report highlighted that FY’18 figures will still come in stronger than in the previous year, driven by a sturdier performance recorded in the earlier quarters of the year. For the Agriculture sector, which is majorly represented by the oil palm producers listed on the Nigerian Stock Exchange, Vetiva is forecasting a largely unexciting performance for FY’18 numbers.
“We expect lower top-line for the crude palm oil sector in Q4’18, with global Crude Palm Oil (CPO) prices falling five per cent in the quarter. With CPO prices also generally lower through the year (19 per cent down y/y), we also expect a slowdown in FY’18 top-line across the industry.”
Reporting on the expectations on the banking sector, Vetiva said Tier I Banks will continue to outperform lower tier players, leveraging on their stronger balance sheets and liquidity positions to drive stronger margins.
“On a broader industry level, however, gross earnings for the banking sector in FY’18 will be majorly driven by growth in non-interest income, as interest income remains constrained by negative credit growth. Bottom line is also expected to be buoyed by significant y/y moderation in loan loss provisions amid the implementation of IFRS 9,” it said.
Early Results The results have started to come in and shareholders have begun to record dividend recommendations and payment dates. Transcorp Hotel Plc, Transnational Corporation of Nigeria Plc, Nigerian Breweries Plc and Newrest ASL Nigeria Plc released their results as at Monday. All of them recommended dividends for the shareholders.
Transcorp Hotel Plc recommended a dividend of 15 kobo per share compared with 12.4 kobo paid the previous year. Transcorp Plc recommended three kobo, up from two kobo the previous year. Newrest ASL Nigeria Plc is to pay 20 kobo dividend, while Nigerian Breweries Plc recommended a total dividend of N2.43, which is lower than the N3.13 paid the previous year.
A look at the results showed that Transcorp Hotel Plc, Transcorp Plc and Newrest ASL Nigeria Plc overcame the challenging operating environment to put smiles on the face of shareholders. For instance, Transcorp Hotels Plc reported revenue of N17.424 billion in 2018, up from N13.843 billion. Profit before tax (PBT) rose 35 per cent from N3.7 billion to N5.0 billion while profit after tax(PAT) jumped 37 per cent from N2.7 billion to N3.7 billion. The directors of the company have recommended N1.14 billion as dividend, which translates to 15 kobo per share.
Commenting on the results, Managing Director/CEO of Transcorp Hotels Plc, Mrs. Owen Omogiafo said: “We are pleased with the overall performance of our company as evident in the year on year growth. This demonstrates the strength and quality of our business strategy to consistently provide world-class luxury services to all our guests and redefine the hospitality standards in Africa.”
According to her, the impressive growth in revenue can be attributed to the sale of the newly upgraded rooms in Transcorp Hilton Abuja. “We keep up the pace with global advancements in technology and are proud to say that Transcorp Hilton Abuja is the first hotel in Nigeria to launch the “ICE app” a digital application that delivers personalised experiences to guests,” she said.
Similarly, Transcorp Plc, which is the parent firm of Transcorp Hotels Plc recorded revenue of N104.163 billion in 2018, up from N80.284 billion in 2017. PBT jumped by 82 per cent to N22.4 billion, from N12.3 billion in 2017, while PAT rose faster by 94 per cent to N20.6 billion, from N10.6 billion in 2017. Commenting on the results, Chief Executive Officer of Transcorp Plc, Mr. Valentine Ozigbo, said they are proud to have ended the year on a high note.
“We are proud to have ended the year on a high-note while sustaining a strong performance, which is a reflection of our sound business strategy. We will continuously strive to deliver significant value to our stakeholders while achieving our long-term goals,” he said.
According to him, “This result was achieved due to the increased revenue from the power and hospitality segments of the group. In addition, we were able to cut down on our loss from forex arising from financing activities by 30 per cent year-on-year as we experienced a relatively stable exchange rate during the fiscal year-ended 2018, this no doubt impacted our Profit before tax as it soared 82 per cent year-on-year.”
Ozigbo explained that Transcorp Power Limited has continued to explore opportunities created by the eligible customer framework initiated by the federal government. “We are at an advanced stage of negotiations with a number of eligible customers, which will translate into transactions in the months ahead. Our hospitality subsidiary, Transcorp Hotels Plc, also maintained its history of profitability in 2018, displaying the impact of our recent $100 million upgrade at the Transcorp Hilton Abuja and the immense value placed on the hotel’s best-in-class hospitality services,” he said.
In his comments, the Chairman of Transcorp, Mr. Tony Elumelu, said: “We remain committed to our purpose of improving lives and transforming Nigeria by powering our industries and businesses while providing our local and international guests with unrivalled hospitality services. This is our way of creating sustainable value for all our stakeholders.” Newrest ASL Nigeria Plc ended the year with a revenue of N5.425 billion, showing an increase of 38 per cent, as against N3.92 billion in 2017. PAT soared by 285 per cent from N386 million to N1.48 billion.
However, Nigerian Breweries Plc recorded a decline in revenue and PAT. The company recorded a revenue of N324.4 billion, down marginally from N344.5 billion in 2017, while exercise duty rose from N21.271 billion to N25.837 billion. Cost of sale reduced from N201 billion to N197 billion, bringing gross profit to N126.9 billion compared with N143.5 billion the previous year. Marketing and distribution expenses rose from N66.863 billion to N70.052 billion, while administrative expenses reduced from N21.748 billion to N20.785 billion. Similarly, Net finance cost fell to N7.529 billion compared with N10.491 billion in 2017.
The company ended the year with PBT of N29.4 billion, down 36.9 per cent from N46.6 billion in 2017 and PAT of N19.4 billion as against N33 billion the previous year. The company explained that the 2018 results were adversely impacted by the increased excise duty rates that came into effect during the year and a challenging operating environment.
Impact of results It is believed the harvest season will attract more investors to the stock market as they move in to enjoy dividend being declared. Also, the performance of companies is one factor that is expected to dictate the direction of the market this year.
According to analysts at Afrinvest (West Africa), after the conclusion of the elections, investors will place a premium on investment decisions based on fundamental analysis of companies as opposed to speculative trading.
“Hence, we believe that performance of corporates will be a major consideration in 2019. Our expectation for corporates’ performances varies across sectors, with our optimistic expectations tilted towards the Banking sector, especially the Tier-1 players that have historically demonstrated resilience amidst tougher operating conditions. We also anticipate improved performances from consumer goods companies –as economic conditions improve –and oil & gas companies –as earnings are projected to be buoyed by increased oil production and prices,” they said.
Zenith Bank Plc has reported a growth of 16. 2 per cent in its profit before tax (PBT) as well as 11.3 per cent growth in profit after tax (PAT) for the year ended December 31, 2018.
According to the audited results made available yesterday, the lender recorded a decline in gross earnings from N745.189 billion in 2017 to N630.344 billion in 2018. Net interest income improved to N295.594 billion compared with N257.991 billion in 2017.
However, impairment charges were reduced from N98.29 billion to N18.372 billion. Similarly, the bank reduced operating expenses from N144.893 billion to N137.897 billion. Consequently, PBT improved from N199.319 billion in 2017 to N231.685 billion, while PAT rose from N173.791 billion to N193.424 billion in 2018. The directors have proposed a final dividend of N2.50 per share which in addition to the N0.30 per share paid as interim dividend amounts to N2.80 per share, compared to N2.70 in 2017.
A further analysis of the results showed that Zenith Bank Plc was cautions in loans advancement to customers in 2018. Loans and advancements fell from N1.823 trillion, as against N2.1 trillion in 2017. But customers deposit increased from N3.437 trillion to N3.690 trillion in 2018.
The stock market reacted positively to the Zenith Bank Plc ‘s results as its share price gained 5.6 per cent to close higher at N25.35 per share. In all, the stock market rebounded yesterday with the Nigerian Stock Exchange (NSE) All-Share Index rising 0.7 per cent to close at 32,406.18 compared with a decline of 1.61 per cent the previous day.
Similarly, market capitalisation added N80.6 billion to close at N12.1 trillion.
In all, 16 stocks appreciated led by Japaul Oil and Maritime Services Plc and Sovereign Trust Insurance Plc with 9.5 per cent apiece, trailed by Associated Bus Company Plc with 9.0 per cent. Academy Press Plc chalked up 8.1 per cent, while Oando Plc garnered 6.2 per cent.
Conversely, First Aluminium Nigeria Plc led the price losers with 10 per cent, trailed by Transcorp Plc with 9.7 per cent. Unity Bank Plc and Union Diagnostic and Clinical Services Plc shed 9.6 per cent and 6.9 per cent in that order.
Meanwhile, activity level also strengthened as volume and value traded improved 55.4 per cent and 23.7 per cent to 361.8 million shares and N4.2 billion respectively. TRANSCORP (Transcorp Plc (120.2 million shares),Zenith Bank (37.3 million shares) and FBN Holdings Plc (31.2 million shares) were the top traded by volume while Dangote Cement Plc, (N951.6 million), Zenith Bank Plc (N925.5 million) and Guaranty Trust Bank Plc (N778.0 million) led the top traded by value.
Investors in the nation’s stock market lost N196bn on Monday as equities listed on the Nigerian Stock Exchange declined following the sudden postponement of the general elections.
Financial experts and capital market operators had on Sunday predicted that the stock market would react negatively to the postponement of the elections.
They said the decision would rattle investors, though the postponement marked the third consecutive time that elections would be shifted in the country.
As of 12:02pm on Monday, the stock market had fallen by 1.92 per cent, by 2:00pm it fell further by 2.53 per cent, but as of the close of the trading, the losses moderated to a 1.61 per cent decline.
The All Share Index shed 525.13 basis points to close at 32,190.07 bps on Monday, while the market capitalisation of equities dropped from N12.2tn on Friday to N12.004tn on Monday.
A total of 233.424 million shares worth N3.363bn exchanged hands in 4,134 deals.
A former Chief Executive Officer, African Finance Corporation, Andrew Alli, in an emailed response to questions from Bloomberg, said the personal costs of the delayed elections would be high.
He said, “But as long as it doesn’t portend some major election dispute after the voting, I don’t think the ultimate effect will be that major.”
Performance across sectors was largely bearish as all sectors closed in the red.
The banking sector was the biggest loser, down by 3.21 per cent, while the oil and gas sector was the second biggest loser with a 2.92 per cent decline.
The consumer goods sector lost 1.54 per cent, while the industrial and insurance sectors declined by 1.16 per cent and 1.13 per cent respectively on the back of sell-offs.
At the end of trading on Monday, 12 gainers emerged, while 37 emerged losers.
Transnational Corporation of Nigeria Plc emerged the major loser for the day, down by 9.94 per cent.
Other losers were C & I Leasing Plc, Livestock Feeds Plc, Wema Bank Plc, and Nigerian Breweries Plc, whose respective share prices shed 9.82 per cent, 9.72 per cent, 9.71 per cent and 9.64 per cent.
The top five gainers were Presco Plc, Beta Glass Plc, Cap Plc, AG Leventis Nigeria Plc and Vitafoam Nigeria Plc, which gained 10 per cent, 9.27 per cent, 6.92 per cent, 6.90 per cent and 5.82 per cent, respectively.
The board of directors of Nigerian Breweries Plc has recommended that 100 per cent of the N19.401 billion profit after tax (PAT) recorded for the year ended December 31, 2018 be paid out as dividend to shareholders. The recommendation is contained in the company’s audited financial reports made available to the Nigerian Stock Exchange (NSE) yesterday.
According to the results, NB Plc’s PAT fell by 41.2 per cent from N33 billion in 2017 to N19.4 billion in 2018. However, in its characteristics of paying all earnings as dividend, the board has recommended that a total dividend of N2.43 per share for the year be paid.
The company recorded a revenue of N324.4 billion, down marginally from N344.5 billion in 2017, while exercise duty rose from N21.271 billion to N25.837 billion. Cost of sale reduced from N201 billion to N197 billion, bringing gross profit to N126.9 billion compared with N143.5 billion the previous year.
Marketing and distribution expenses rose from N66.863 billion to N70.052 billion, while administrative expenses reduced from N21.748 billion to N20.785 billion. Similarly, Net finance cost fell to N7.529 billion compared with N10.491 billion in 2017.
The company ended the year with profit before tax of N29.4 billion, down 36.9 per cent from N46.6 billion in 2017 and PAT of N19.4 billion as against N33 billion the previous year.
Based on the performance, the directors have recommended to the Company’s Shareholders at the annual general meeting(AGM) coming up on the 17th of May, 2019, the declaration of a total dividend of N19.4 billion, that is, N2.43 per share representing a hundred per cent dividend pay-out ratio. The company had earlier, in 2018, paid an interim dividend of N4.8 billion which translated to N0.60k per share before the final dividend of N1.83 that will be N14.6 billion.
In the statement signed by the Company Secretary/Legal Director, Uaboi Agbebaku, NB Plc said the 2018 results were adversely impacted by the increased excise duty rates that came into effect during the year and a challenging operating environment.
NB Plc last year got commendation from the NSE for its commitment to corporate governance standards. The commendation came when the managing director of the company, Mr. Jordi Borrut Bel visited the exchange shortly after his appointment.
Borrut Bel had restated the company’s the commitment to sustaining its relationship with the NSE, adding that over the years, the company had excelled in compliance and corporate governance matters.
The Nigerian Stock Exchange (NSE) yesterday lifted the trading suspension placed on the shares of Goldlink Insurance Plc for not filing the company accounts in accordance with the post-listing requirements of the exchange.
According to the NSE, “ pursuant to Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange , which provides that if an issuer fails to file the relevant accounts by the expiration of the cure period, the exchange will: send to the issuer a second filing deficiency notification within two business days after the end of the cure period; suspend trading in the issuer’s securities and notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension, trading in the shares of the companies six companies have been suspended effective today, 8 October.”
The exchange had explained that in accordance with the rules set forth above, the suspension of any company will only be lifted upon the submission of the relevant accounts and provided the exchange is satisfied that the accounts comply with all applicable rules of the exchange.
In a notification to market operators yesterday, the NSE said Goldlink Insurance Plc has now filed its outstanding audited and interim financial statements to the exchange.
“In view of the submission of the company’s accounts and pursuant to Rule 3.3 of the Default Filing Rules, which provides that the suspension of trading in the issuer’s securities shall be lifted upon submission of the relevant accounts provided the exchange is satisfied that the accounts comply with all applicable rules of the exchange. The exchange shall thereafter also announce through the medium by which the public and the SEC was initially notified of the suspension, the general public is hereby notified that the suspension placed in the trading of the company’s shares was lifted on February 18, 2019,” the NSE said.
Meanwhile, 37 stocks depreciated at the stock market as investors dumped shares. The NSE Share Index fell 1.61 per cent to close at 32,190.07, while market capitalisation shed N196 billion to close at N12.004 trillion.
Transcorp Plc led the price losers with 9.9 per cent trailed by C & I Leasing Plc with 9.8 per cent. Livestock Feeds Plc and Wema Bank Plc went down by 9.7 per cent apiece.
On the positive side, Presco Plc led the price gainers with 10 per cent, trailed by Beta Glass Plc with 9.2 per cent. CAP Plc and A.G Leventis Nigeria Plc added 6.9 per cent apiece.