Archives April 2019

Stock Market Rebounds on Bargain Hunting in Bellwethers

The stock market pared losses Wednesday as investors embarked on bargain hunting after days of bearish run. The persistent bear run had pushed the Nigerian Stock Exchange (NSE) All-Share Index (ASI) to a 52-week low two days ago.

However, some investors moved in to take advantage of low valuations. Consequently, the NSE ASI appreciated by 0.15 per cent to close at 29,202.54, while market capitalisation added N16.5 billion to close at N10.965 trillion.

Buying interest in Dangote Cement Plc, Zenith Bank Plc, FBN Holdings Plc among other contributed to the market rebound. In all, 25 stocks gained compared with 18 that declined.

However, Livestock Feeds Plc led the price gainers with 10 per cent, trailed by Custodian Investment Plc with 9.8 per cent, while Learn Africa Plc and Transnationwide Express Plc garnered 8.9 per cent and 8.7 per cent respectively. NPF Microfinance Bank Plc and Law Union & Rock Insurance Plc chalked up 8.1 per cent and 5.8 per cent in that order.

Meanwhile, market analysts said the renewed interest in Zenith Bank Plc shares could be traced to the announcement of a new managing director for the bank effective June 1, 2019. The bank has on Monday announced the current deputy managing director, Mr. Ebenezer Onyeagwu as the incoming MD.

The bank had said that the appointment was consistent with its tradition and succession strategy of grooming leaders from within. Onyeagwu, who is a graduate of accounting from Auchi Polytechnic, began his career at the defunct Financial Merchant Bank in 1991 and later held several management positions in the erstwhile Citizens International Bank Limited until 2002 when he joined Zenith Bank. He obtained a postgraduate diploma in Financial Strategy and a certificate in Macroeconomics from the University.

Market operators said the succession plan has impressed many investors, hence the increased demand for the shares. Zenith Bank close 2.2 per cent higher at N20.60 per share. The demand for Zenith Bank, Access Bank Plc and FBN Holdings Plc made the NSE Banking Index to close as the lone gainer. It appreciated by 0.8 per cent.

On the negative side, the NSE Industrial Goods Index led decliners down 1.3 per cent, followed by the NSE Insurance Index and NSE Consumer Goods Index that fell by 0.6 per cent and 0.4 per cent respectively. The NSE Oil & Gas Index closed flat.

Source:© Copyright Thisday Online

 

First Aluminium Opts for Voluntary Delisting from NSE

First Aluminium Nigeria Plc has explained its decision to delist from the Nigerian Stock Exchange (NSE), saying its shareholders were not benefiting from the continued listing and were not getting exit opportunities, while the company’s shares have continued to trade at a significant discount to the intrinsic value.

First Aluminium Nigeria Plc was listed in the daily official list of the Nigerian Stock Exchange in 1992. ALUCON Holdings S.A. holds about 75.48 per cent of the current shareholding with minority shareholders holding about 24.52 per cent.

However, in a notification to the NSE yesterday, First Aluminium said over the last seven years, there has been little or no trading activity on the shares held by the minority shareholders.

“The share price was stuck at 50 kobo for about six years between June 2011 and June 2017, and thereafter experienced further diminution, both in share price and trading volumes. Over the last 18 months daily average volume ranged between 2,815 to roughly 2,918 units during the period July 2017 to December 2018. Shareholders are not benefiting from the continued listing as they are not getting exit opportunities and their investments have been locked up, thereby finding it difficult to dispose of their shareholding. Neither the company nor its shareholders have benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value,” the company said.

Furthermore, rationalisation of operational expenses to support the company’s business and to meet the needs of various stakeholders as the attendant cost required to comply with its listing requirements including filing fees, penalties or sanctions, are not commensurate with the benefits to the company.

Also, the increasing competitive environment and the struggle to defend market share have resulted in market pressure to reduce price and this might significantly impact operating margin.

According to the company, the delisting will afford the company to carry-out an imminent corporate restructuring exercise to take advantage of emerging opportunities and may consider re-listing the company in the future if the market conditions are favourable.

“The voluntary delisting will not occasion loss of business opportunities as there are similar unlisted aluminium companies who are commanding significant share of the aluminium market. Also, minority shareholders will not lose their shares because of the voluntary delisting and such shareholders may retain their membership in the unlisted company.

The majority shareholder are the promoters of the transaction and offer other shareholders the opportunity to either remain shareholders of the unlisted company or accept a consideration for their shares which the majority shareholders are willing to purchase.

Source:© Copyright Thisday Online

Oando on Steady Recovery

Goddy Egene writes that the N29 billion profit after tax recorded by Oando Plc for the 2018 financial indicates a steady recovery expected to lead to payment of dividend in no distant time

“We remain confident in our ability to deliver significant value to shareholders in the years ahead as well as resuming our dividend payments.”
The above were the words of the Group Chief Executive Officer, Oando Plc, Mr. Wale Tinubu while speaking on the prospects of the integrated energy firm to start the payment of dividend very soon, following improvement in the company’s fortunes.

Tinubu stated this after the company released its audited results for the year ended December 31, 2018, showing a growth of 46 per cent in profit after tax (PAT).
Oando Plc had a rough patch years back, recording losses and unable to pay dividend. However, the company has bounced back to profitability and recording steady recovery, thereby raising the hopes of shareholders of receiving dividend in the not too distant future.

Financial performance
Following the negative fallout from the plunge in oil prices in 2014, the company has successfully executed strategic initiatives that has enabled continued growth across all financial performance indices three years in a row. In 2018, Oando Plc posted a turnover of N679 billion, indicating a growth of 37 per cent from N497.4 billion in 2017. Cost of sales rose from N409 billion to N683.2 billion, bringing gross profit to N96.274 billion, up from N88.081 billion in 2017. The increase is primarily driven by higher revenue as a result of higher commodity prices and higher oil production.
The company reduced its administrative expenses to N70.457 billion from N72.558 billion. Net finance cost declined from N33.784 billion to N32.441 billion. PAT rose by 46 per cent from N19.8 billion to N28.8 billion in 2018. The PAT was buoyed by higher revenue as well as income tax credits.
The company has also reduced its debt and liabilities, decreasing 55 per cent from N473.3 billion in 2014 after the acquisitions of ConocoPhillips to N210.9 billion in 2018.

Analysts said the company’s 2018 results are further evidence that its management team is focused on maintaining a strong balance sheet, profitability, value creation and a business that is indeed here for good.
According to them, the third year of strong financial performance is evidence that the company is back to business as usual, thus rebuilding stakeholder confidence in the brand as a viable business to invest in.

Company explains performance
Speaking on the results, Tinubu said: “Our 2018 results demonstrate the solid foundation we have built across volatile commodity price cycles, and our ability to deliver profitability despite a challenging local operating environment. Over the last few years, we have developed a reliable platform for future growth through the execution of a corporate strategy designed to streamline our operations, reduce our debt and optimize our asset portfolio.”

Commenting on the significant reduction in borrowings, he said: “Our asset base is delivering strong free cash flows as evidenced by a 70 per cent reduction in our Upstream Borrowings since the closure of our landmark acquisition of ConocoPhillips’s Nigerian assets in 2014.”

Operational highlights
In addition to an impressive financial statement, the company recorded operational highlights. In the Upstream, Oando recorded a two per cent increase in proven oil reserves to 479.8 Million Barrels of Oil Equivalent million barrels of oil equivalent (mmboe) from 470.7mmboe while net revenues in 2018 increased to $407.0 million from $333.7 million in 2017.
According to the company, during the 12 months ended December 31, 2018, production was in line with prior year at 40,023boe/day, compared with 40,188boe/day in the same period of 2017. Oil production in particular increased by 10 per cent from 15,492bbls/day in 2017 to 16,967bbls/day in 2018.

“Working interest proven and probable (2P) reserves, as assessed by an independent reserves evaluator, stood at 479.8mmboe as at December 31, 2018 compared to 470.7mmboe in the comparative prior year period. This represents an increase in overall 2P reserves of two per cent year on year in line with the group’s reserve replacement ratio,” the company said.
Oando recorded capital expenditure of N38.0 billion in 2018 compared N17.1 billion in 2017.
In 2018, Oando Trading traded over 14 million barrels of crude oil under various contracts with the Nigerian National Petroleum Corporation (NNPC) as well as delivering 739,876 metric tonnes of refined products, acting as a key source of liquidity to the Oando Group. Oando Trading continues to solidify its relationships with leading international and local banks, maintaining a sizeable and well diversified structured Trade Finance facilities required to support future growth.

Looking ahead
According to the company, its upstream business will continue to pursue production growth initiatives through strategic alliances, whilst ensuring operational efficiency and fiscal prudence.

“Our trading business will continue to solidify its position in Nigeria and carry out growth initiatives, whilst exploring opportunities for expansion across Africa. The group as a whole remains focused on driving profitability via growth in our upstream business and achieving further reduction of borrowings to ensure value accretion to shareholders,” it said.
Oando streamlined its portfolio in 2016, by focusing on its dollar denominated businesses in the upstream and downstream trading sector to drive profitability and ensure value accretion to shareholders as a mechanism to navigate the crash in oil prices which negatively impacted all players in the oil and gas sector. Since the successful implementation of its corporate strategic initiatives the company has recorded its third consecutive year of profit.

Divestment from power and gas
Oando fully divested from gas and power business by selling its residual 25 per cent interest in Axxela Limited (formerly Oando Gas & Power Limited) to Helios Investment Partners. The leading private equity firm with a focus on investments in Africa had in 2016 had acquired the initial 75 per cent interest in Axxela for $115.8 million.
However, Oando Plc last week announced the divestment of the remaining 25 per cent for $41,500,000, thereby optimising value from a non-core business activity of the group.

According to the company, the net proceeds of the transaction will be applied in partially prepaying the group’s medium term loan. Tinubu said:”The completion of this divestment signifies another win for the company.We pioneered the development of Nigeria’s foremost natural gas distribution network which has subsequently grown to become the largest private sector gas distributor in Nigeria creating a lasting impact on both the sector and the Nigerian economy.

The divestment further reinforces Oando’s ability to create value that can be monetised and the company’s status as the indigenous partner of choice for international companies looking to invest in Nigeria. This transaction favorably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.We will continue to maintain significant presence in the Midstream as well as grow our gas aspirations via our upstream gas assets in our NAOC Joint Venture wherein we have four gas projects within the NNPC’s Seven Critical Gas
Development Projects (CGDPs), which are responsible for almost 50 per cent of the 42 TCF that will be delivered by the seven CGDPs by 2020.”

Also commenting, CEO, Axxela Limited, Bolaji Osunsanya said: “As we position to become the preferred and fast-growing gas and power portfolio across sub-Saharan Africa, we pay homage to our origins, legacy, and storied history as an Oando portfolio company. As we commence a new journey, our audacious growth initiatives across Nigeria and the sub-region will leverage our industry expertise, experience, and longevity; while our affiliation as a full-fledged Helios company will improve our access to capital. The continued growth, robustness, and stability of our business enterprise, enables Axxela provide required efficient and environmentally-friendly energy solutions for industrial and commercial clients, leading to positive socio-economic impact in our markets of operation.”

Source:© Copyright Thisday Online

Wema Bank Posts N4.8bn Profit

Wema Bank Plc has released its audited financial results for the full year ended 31 December, 2018, which showed that the bank’s profit tax grew by 59 per cent to N4.8 billion, up from N3.01 billion the previous year.

The results also showed that the Wema Bank Group recorded gross earnings of N71.53 billion, which was a 9.6 per cent increase over the 2017 figure.

Its profit after tax also climbed to N3.33 billion in the year under review, up from N2.26 billion in 2017.

The growth resulted from a 8.59 per cent increase in interest income and a 13.95 per cent increase in non-interest income.

The bank also recommended to its shareholders a dividend payout for the first time in 14 years as it has proposed a dividend of three kobo per share in line with the board approved dividend policy.

In the year under review, the bank continued to improve on its deposit mobilisation while at the same time working down its cost of funds.

“ALAT (Nigeria’s first fully digital Bank) launched in May 2017 has improved the bank’s retail liabilities and customer base as the bank now onboards over 1,000 new customers daily on the digital platform and continues to grow its partnership profiles.

“The digital bank continued to receive several accolades in 2018, including the World Finance Awards for Most innovative Bank Africa and the Asian Banker Awards for Best Digital Bank Africa,” a statement explained.

Commenting on the results, the Managing Director/CEO, Ademola Adebise said: “Our vision is to get ALAT to become the premier digital platform in Nigeria. This will be driven by our expertise in the Digital space and our retail partnerships.”

Wema Bank recorded other notable achievements during the year. These include its successful tier-2 capital raising of N17 billion, even as it retained its Investment grade ratings from Fitch, GCR and Agusto.

Source:© Copyright Thisday Online

Access Bank Lists M15bn Green Bond on FMDQ OTC, NSE

Access Bank Plc yesterday listed its N15 billion Green Bond on the FMDQ OTC Securities Exchange and the Nigerian Stock Exchange (NSE). The Bond is the first of its kind to be issued by an African corporate and represents a major milestone in the development of the local green finance market. It is a 5-year 15.5 per cent Fixed Rate Senior Unsecured Green Bond due 2024.

Speaking on the occasion of this landmark listing, the Group Managing Director/CEO of Access Bank Plc, Herbert Wigwe, said: “At Access Bank we are a pioneer in both domestic and international capital markets, leading the way with our commitment to sustainable banking. We hope that this bond issuance inspires other African companies to support the long-term development of the green finance market whilst simultaneously realising the growth potential of the fast-developing low carbon economy.”

Speaking on the listing, Associate Executive Director, Capital Markets, FMDQ, Ms. Tumi Sekoni, congratulated the issuer for the successful issue of the pioneer Climate Bond Certified Green Bond in the Nigerian DCM.

According to her, the green bond would help address climate and environmental challenges in a sustainable manner to deliver prosperity for Nigerians and further deepen the domestic DCM by increasing the range of investible debt securities in the markets, invariably contributing to Nigeria’s development. She reiterated FMDQ’s commitment to continue to create awareness and drive education for green financing, thereby facilitating the development of the green bond market in Nigeria.

Also speaking, Managing Director, Chapel Hill Denham Advisory Limited, sponsor of the issue the registration member (Listings) of FMDQ, Mrs. Kemi Awodein, said “Chapel Hill Denham is proud to have acted as lead arranger and financial adviser to Access Bank on Nigeria’s and Africa’s first climate bond.

“This is another first-of-a-kind deal for both Access Bank and Chapel Hill Denham, and this demonstrates our leadership in debt capital market innovation and our commitment to doing work that delivers positive impact for Nigeria’s future. A commitment to advancing sustainable development goals is imperative in Nigerian and debt markets provide us many solutions,” he said.

On its part, the NSE said will continue to provide a unique platform to support both the federal government and businesses to access capital for sustainable initiatives.

“The NSE, in collaboration with Federal Ministry Environment, Federal Ministry of Finance and Debt Management Office hosted a high profile conference themed: “Green Bonds: Investing in Nigeria’s Sustainable Development” in 2016 that provided an opportunity for the government to engage the capital market stakeholders. The conference was a major step towards the issuance of Nigeria’s first sovereign green bond currently listed on the Exchange,” the exchange said.

Source:© Copyright Thisday Online

FCMB Records N177.4bn Revenue, 73% Profit Growth

The FCMB Group Plc has released its financial results for the year ended December 31, 2018, which showed a gross revenue of N177.4 billion. This represented an increase of 4.3 per cent, compared to the N169.9 billion recorded same period in 2017.

In addition, profit before tax (PBT) rose by 73 per cent to N18.4 billion as against N11.5 billion in the preceding year.

Owing to this, the financial institution has recommended a dividend of 14 kobo per share to shareholders.

The Group, a holding company divided along three business groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited) as well as Asset & Wealth Management (FCMB Pensions Limited, First City Asset Management Limited and CSL Trustees Limited) also reported appreciable growth in key operating areas going by the audited results.

According to a statement, net interest income as at the end of 2018 rose by three per cent year-on-year (YoY) to N72.6 billion.

In demonstration of the enhanced confidence of customers in FCMB, deposits also increased by 19 per cent year-on-year to N821.7 billion, while loans and advances stood at N633 billion. Total assets went up by 21 per cent year-on-year, to N1.43 trillion, just as capital adequacy ratio was 15.9 per cent.

The statement added: “the Commercial and Retail Banking Group (which includes First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited) grew its profits by 76 per cent, driven by improved performance in retail lending and increase in fees and commissions. Our banking franchise continued to grow as reflected by a 19 per cent in deposits and our customer base also grew by 20 per cent to 4.8 million customers.”

The Group further reported that, “the pre-tax profits of our Investment Banking businesses (FCMB Capital Markets Limited and CSL Stockbrokers Limited) grew by 18 per cent in 2018. This performance was driven by higher conversion of our investment banking deal pipeline as well as cost efficiency.

“Our stockbroking business also maintained its position as a top-tier player in its sector. Our Asset & Wealth Management businesses (FCMB Pensions Limited, First City Asset Management Limited and CSL Trustees Limited) increased combined assets under management by 24 per cent to over N310 billion.”

Source:© Copyright Thisday Online

Caverton Posts N5.75bn Profit in 2018

Caverton Offshore Support Group Plc, (COSG), one of the leading providers of marine, aviation and logistics services to local and international oil and gas companies in Nigeria, has announced its audited year end results for 2018.

The results showed a profit before tax of N5.75billion, compared with the N3.9 billion recorded in 2017.

Also, its after-tax profit climbed to N4.3billion, up from N2.62 billion the previous year.

Its revenue jumped by 56 per cent, while direct operating costs increased by 43 percent supporting the earnings per share which also increased by 64 percent when compared to 2017 financial year.

Commenting on the recent events, COSG’s Chief Executive Officer, Bode Makanjuola said, “The brownout incident during the 2019 Presidential campaign which resulted in the hard landing of our aircraft conveying the Vice President of Nigeria further goes to show why safety must always remain paramount in our operations.

“We are thankful there were no injuries or fatalities and we express our profound gratitude to the Presidency, Nigerian aviation regulatory authorities and the general public for their thoughts and prayers; Special commendation must go to our pilots and supporting staff for their continued professionalism, dedication and support.”

He added, “the implementation of our strategy to increase service offerings is at an advanced stage. Our Maintenance Repair and Overall (MRO) facility, is nearing completion and work has already commenced on the training school hangar which will house our recently acquired Thales built helicopter flight simulator.”

Caverton was issued Approved Training Organisation (ATO) Certificate by the Nigerian Civil Aviation Authority (NCAA) in August 2018.

Revenue for 2018 was N32.1billion, (N20.54billion December 2017), operating profit, (excluding other income), is N7.98billion, (N4.22billion December 2017).

EBITDA for the period is N10.25 billion, (N6.24bn December 2017). Profit before tax is N5.75

Source:© Copyright Thisday Online

SEC Extends Issuance of Dividend Warrants to December 2019

The Securities and Exchange Commission (SEC) has extended the deadline for the discontinuation of the issuance of dividend warrants to December 2019.

The move, according to the Commission, was to enable relevant stakeholders deliberate on and address all outstanding issues.

SEC announced the extension via circular on its website, saying the decision was also in furtherance of its mandate to ensure that all categories of shareholders and investors are adequately protected.

According to the Commission, the extension of the deadline for discontinuation of issuing of warrants does not stop investors to continue with the registration for electronic-dividend.

It stated that the e-dividend initiative remains critical to the complete elimination of the phenomenon of unclaimed dividend and management of the commission encourages all shareholders who are yet to do so, to get mandated on the e-dividend platform before 31st December 31, 2019.

The Commission said it recently conducted a strategic assessment of the implementation of the e-dividend initiative across the country and reviewed feedback/observations received from stakeholders and the general public.

“The assessment revealed that while remarkable progress has been recorded in concerted efforts through robust enlightenment campaigns to mobilise more shareholders to get mandated on the e-DMMS platform, there remain a few pertinent issue that need to be resolved as a precursor to the total discontinuance of the issuance of dividend warrants by Registrars” it said.

The regulator believes that when investors receive dividends electronically it would reduce unclaimed dividends. It also believes that when investors who used multiple accounts to buy shares in the boom days consolidate their accounts and begin to claim accumulated dividends, the amount of unclaimed dividends would be reduced.

The Acting Executive Commission, Corporate Services, SEC, Mr. Adekunle Rolands, recently said only 2.7 million investors had mandated their e-dividend accounts.

He had explained that since SEC asked investors to pay a token of N150 for the e-dividend registration, investors have been reluctant to enroll for e-dividends.

According to him, no investor would be asked to pay at the point of registration but the N150 will be deducted once the account has been mandated, stressing that it is just token of N150 irrespective of the fact whether the dividend is N200,000, N1 million or more.

He said SEC, registrars and banks would review the process and see how to entice investors to embrace the e-dividend registration.

Similarly, the Acting Director General of SEC, Ms. Mary Uduk said the multiple account regularisation was extended to December 31, 2019 as part of commitment to reduce the quantum of unclaimed dividends in the market.

“Through this exercise, some Nigerian investors in Diaspora have been able to consolidate their shareholding accounts. Similarly, several local investors with numerous accounts have also been able to consolidate their investments.

“We therefore enjoin the general public to take advantage of this initiative to regularise their shareholding accounts before the December 31, 2019 deadline,” she said.

Uduk, recently said SEC was still awaiting the formal application of telecommunication giant, MTN to list its shares on the Nigerian Stock Exchange (NSE). The telco had said its shares would be listed before the end of first half of the year.

However, Uduk, said even though the regulator has had some discussions on the planned listing of the telco, MTN was yet to present a formal application.

“I know that MTN has decided to come to the market through listing by introduction and I know they working hard towards it and have visited the commission. But there has not been any formal application from the company,” Uduk said.

The Chief Executive Officer, MTN Nigeria, Mr. Ferdi Moolman, recently disclosed that save for the disagreement the company had with the Central Bank of Nigeria (CBN) last year, it would have gone ahead with its listing plan.

According to him, they had done a lot of work on the listing and their target was to list in 2018.

Source:© Copyright Thisday Online