The stock market opened February on a bearish note yesterday as investors’ sentiments remained dampened by weak corporate earnings by some companies. The Nigerian Stock Exchange (NSE) All-Share Index fell by 0.51 per cent to close at 25,903.55, extending the loss of the previous day.
Market operators said investors are being cautious as they await more corporate results for 2016 full year and quarterly performance. Already, Guinness Nigeria Plc, a leading brewing firm had announced a loss of over N4.6 billion for the half year to December 31, 2016. Similarly, Seven-Up Bottling Company Plc, declared a loss of N4.8 billion for the nine months ended December 31, 2016.
Forte Oil Plc, which announced its full year results ended December 2016, posted a drop of 50 per cent in profit after tax and did not declare a dividend for the year.
“These results are serious concerns for shareholders who are not enthusiastic about increasing demand for stocks for now until positive results begin to come in to the market,” a stock dealer said.
In all, only nine stocks appreciated while 25 stocks depreciated yesterday led by Forte Oil with 5.0 per cent to close at N67.66 per share. Guinness Nigeria Plc and Unilever Nigeria Plc trailed with a decline of 4.9 per cent apiece.
Forte had posted a revenue of N148.6 billion in 2016, up by 19.3 per cent from N124.6 billion in 2015. However, profit before tax fell by 24 per cent to N5.3 billion, from N7.0 billion, while profit after tax declined by 50 per cent to N2.9 billion, compared with N5.8 billion recorded in 2015.
While operating expenses declined by 2.9 per cent to N13.3 billion compared with N13.7 billion in 2015, net finance cost soared by 154.9 per cent from N1.7 billion to N4.3 billion, a development that affected the bottom-line.
Similarly, a jump of `166 per cent in net finance cost from N1.723 billion to N4.578 billion led to the loss of N4.6 billion recorded by Guinness Nigeria.
However, the Managing Director/Chief Executive Officer of Guinness Nigeria Plc, Mr. Peter Ndegwa, said there are many bright spots for the company but that the challenging economic environment and high finance charges impacted results.
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