Lafarge Africa Plc, a sub-Saharan African building materials company, on Monday announced a loss after tax of N34.601 billion for the year ended December 31, 2017, compared with a profit after tax of N16.898 billion in 2016. The audited results showed that Lafarge recorded revenue of N299.153 billion, up 36 per cent from N219.714 billion in 2016.
Gross profit stood at N50.759 billion in 2017, compared with N40.662 billion in 2016. Administrative expenses jumped from N23.737 billion to N41.595 billion in 2017, while finance cost rose from N38.216 billion to N43.216 billion due to high charges on over draft and bank borrowings. Lafarge Africa’s total loans and advances increased to N256.546 billion, from N104.709 billion in 2016.
The company ended the year with a loss of N34.601 billion as against a profit of N16.898 billion. Despite the loss, the directors have recommended a dividend of N13.010 billion, which translates to 150 kobo per share, up from 105 kobo paid the previous year.
According to the company, a detailed review of key projects in Nigeria such as the Road in Calabar and of mothballed assets in South Africa led to an impairment of N19.1 billion.
“The combination of these impairments and the net loss in South Africa of N187b billion led to a group net loss of N34.6 billion compared to a profit of N16.8 billion N in 2016,” the company said.
However, the Chief Executive Officer of Lafarge Africa Plc, Michel Puchercos attributed the strong margins in the Nigerian business to cost initiatives and more favorable pricing.
According to Puchercos, Lafarge Africa Plc’s industrial operations in 2017 were stable with plants operating at high reliability levels.
He also noted that the energy optimisation plan for the company has been successful with increased use of Alternative Fuel and Coal to offset gas shortages in operations in the West while plant operations in the eastern and northern part of the country relied mainly on gas and coal. He said these logistic, commercial and operational initiatives helped to sustain market share in the year under review.
“The South African business thrived in a challenging business environment, operations are set to stabilize in year 2018. The Lichtenburg plant returned to normal operations in the course of the year. A turnaround plan was initiated in order to transform the company’s operations,” the company said.
Looking ahead, Puchercos said: “In 2018 we shall implement a continuous improvement programme that will see us building on EBITDA margins above the 35 per cent benchmark.”
May & Baker Nigeria Plc recorded significant growths in sales and profitability in 2017 as the healthcare company continued to implement its medium-term strategic plan aimed at enhancing shareholders’ value.
Highlights of the audited results showed that turnover rose by 10.39 per cent from N8.47 billion in 2016 to N9.35 billion in 2017. Gross profit grew by 29.13 per cent to N3.28 billion in 2017 as against N2.54 billion in 2016. Operating profit jumped by 51.04 per cent from N820.87 million to cross the billion naira mark to N1.24 billion in 2017. Profit before tax leapt by 75.07 per cent from N345.94 million in 2016 to N605.62 million in 2017, while net profit stood at N370.87 million in 2017 compared with net loss after tax of N41.09 million recorded in 2016.
The board of directors of the company has recommended distribution of N196 million as cash dividend for the 2017, representing a dividend per share of 20 kobo. This represents an increase of 233.3 per cent compared with six kobo paid the previous year.
The management of the company attributed the 2017 performance to the success of efforts to harness the potential of recent investments and reduce related costs.
According to it, despite the macroeconomic challenges, the company’s sales growth has continued to improve considerably above industry average, showing continuing efforts to retain and grow market share.
Managing Director/Chief Executive Officer of May & Baker, Mr. Nnamdi Okafor said the improvement in margin validated management’s tight cost control measures and continuing efforts to harness synergies within the group to reduce costs and improve shareholders’ value.
“Our results show our main focus of satisfying our customer and enhancing our shareholders’ value. Our steady implementation of many growth initiatives are paying off as can be seen in the latest results. We are also happy that the investing public is taking note of these improvements with the performance of our stock as one of the best-performing stocks at the market,” he said.
He noted that the recent inauguration of the board of Biovaccines Nigeria Limited has raised the prospects that the subsidiary will soon begin to impact positively on the group performance.
Okafor said with the company’s world-class manufacturing facility in Ota, Ogun State, growing into a hub of pharmaceutical manufacturing in West Africa, the imminent commencement of operations by Biovacccines Nigeria Limited will open up a new vast vista of growth for the group.
Shareholders of UACN Property Development Company (UPDC) Plc, a member of the UAC of Nigeria Group, will have to wait longer before getting dividend as the company has recorded further loss for the year ended December 31, 2017.
The company had slipped into the red in 2016 with a loss of N1.551 billion, which it attributed to recognition of losses on certain projects and impairment of investments in one joint venture project, foreign exchange losses and negative performance of its hotel asset.
Although the company had assured stakeholders of efforts being made to ensure better performance in 2017, the audited results of the property development firm, showed that its loss position has worsened.
UDPC recorded revenue of N3.983 billion in 2017, down 20 per cent from N4.994 billion in 2016. While the company reduced administrative expenses from N1.256 billion to N859 million, finance cost soared due to huge interests paid on bank borrowings and overdrafts. Net finance cost jumped by 78 per cent from N2.835 billion in 2016 to N5.030 billion in 2017.
Consequently, UPDC ended 2017 with loss of N2.947 billion, compared with a loss of N1.551 billion in 2016. Chairman of UPDC Plc, Mr. Larry Ettah had last year told shareholders at the annual general meeting (AGM) that despite the challenging business terrain, the company continued its ongoing project developments in 2016 and commenced new ones in 2017.
“A key strategic imperative for 2017 is to deleverage the company. This is being achieved through deployment of an aggressive sales strategy, one for one Rights Issue that is about to be launched, and divestment from low yielding investment properties. The fundamentals of the company are strong and the brand remains positioned to deliver value to all stakeholders,” he said.
Ettah had said the Nigeria’s real estate market still presents substantial opportunities as well as a number of challenges for property investors and developers.
He said: “Cumbersome and time-consuming processes for land acquisition, insecure land title, infrastructure deficiency are few of the challenges of the sector. Existing concerns such as underdeveloped mortgage market, paucity of medium to long term infrastructure and financial institutions with reasonable interest rates are areas the federal government would need to pay particular attention to in the near future in order to move the sector forward.”
United Bank for Africa Plc recently showed resilience in its performance for the year ended December 31, 2017. Although expectations have been mixed about what the performances of banks would be in 2017, stakeholders remained bullish that UBA would deliver improved results. And when the financial institution unveiled its audited results last week, it showed positive trends in the performance. Growth in the contribution and market share from its pan-African subsidiaries was significant. The pan-African financial institution gross earnings of N462 billion, indicating a growth of 20 per cent from N314 billion recorded in 2016.
Interest income stood at N325.66 billion, up by 23.3 per cent from N263.97 billion, while net interest income improved by 25.6 per cent to N207.63 billion from N165.2 billion in 2016. Loan impairment charges also rose by 18.8 per cent from N27.6 billion to N32.9 billion, bringing the net interest after impairment charges to N174.74 billion, from N137.5 billion in 2016. Net operating income increased by 20.8 per cent from N257.2 billion to N310.84 billion.
UBA ended the year with profit before tax (PBT) of N105.26 billion, indicating a growth of 16.1 per cent, while profit after tax (PAT) stood at N78.59 billion, showing an increase of 8.7 per cent from N72.26 billion in 2016. The bank’s subsidiaries outside Nigeria contributed a third of the Group’s top-line and 45 per cent of the profit for the year, a remarkable improvement from 31 per cent contribution made by the ex-Nigeria offices in 2016. This, market analysts said is the success of the bank’s expansion strategy, with target of 50 percent contributions by 2020.
The bank’s contributions to support the economy in terms of loans and advances also increased. Specifically, loans and advances rose by 9.6 per cent from N1.505 trillion to N1.651 trillion. Customers’ confidence in the bank equally improved, leading to an increase of 9.9 per cent in deposits from customers to N2.733 trillion, up from N2.486 trillion. The bank’s total assets peaked at N4.07 trillion, translating into 16.1 percent year-on-year growth from the figure of N3.50 trillion recorded as at 2016 financial year.
Reflecting a strong internal capital generation, the bank’s shareholders’ fund also soared 18.2 per cent to N529.4 billion in the 2017 financial year. Based on the performance, the Board of UBA Plc proposed a final dividend of 65 kobo per every share of 50 kobo each. This final dividend proposal is in addition to the 20 kobo per share interim dividend paid after the audit of the 2017 half year financial statements, thus putting the total dividend for 2017 financial year at 85 kobo per share.
Bank Explains Performance Speaking on the results, the Group Managing Director/CEO, UBA Plc, Kennedy Uzoka, said: “The results, underlines the success of our strategy of expanding across Africa, diversifying revenues and capturing the broader business opportunities inherent in Africa’s growth. The results reinforce the sustainability of our business model and the capacity to deliver superior long-term return to shareholders, as the economic and business environment improve.”
“In 2017, we made strong progress in our strategic initiative of dominating transaction banking across all our countries of operation, gaining market share in all lines of our business. Even as the non-oil sectors of our largest country of operation, Nigeria, remained relatively weak, we still grew earnings by 20 per cent to N462 billion, a third of which is attributable to non-funded income,” he further noted.
Speaking in similar vein, the Group Chief Finance Office, Ugo Nwaghodoh said: “In a period of high interest rates, we achieved a relatively low 3.7 per cent cost of funds. This operational efficiency reflects the benefit of our rich pool of stable savings and current account deposits. The net interest margin stabilised at seven per cent, even as yields on treasury assets dropped in the last quarter of 2017. Our core transaction banking offerings gained strong momentum, with income from these business lines growing by double digits.” He said the bank remain committed to its responsible approach to balance sheet management, with focus on growing risk asset and broader balance sheet in a profitable and prudent manner.
“Amidst a subdued Nigerian credit market, we grew our loan portfolio by 10 per cent, leveraging our robust liquidity and capitalisation to support good businesses through this challenging economic cycle. We closed the year with a Basel II capital adequacy ratio of 19 per cent and a liquidity ratio of 50 per cent, well ahead of 15 per cent and 30 per cent regulatory requirement respectively. Our disciplined approach to lending and broader risk management continues to uphold our asset quality.”
Apart from the strong financial performance in 2017, UBA Group proved its leadership on the continent as the Banker Magazine crowned the Group, “African Bank of the Year 2017”. To further demonstrate the group’s strength and dominance in the financial sector on the continent, four of UBA Group’s operations in Africa also led contenders in their respective countries to emerge the Best Bank of the Year 2017 in their respective markets. UBA Congo, UBA Tchad, UBA Gabon and UBA Senegal emerged the Best Bank of the Year in Congo, Tchad, Gabon and Senegal, reinforcing the strong franchise of the Group across its chosen markets in Africa.
Analysts’ comments Assessing the results for the fourth quarter (Q4), analysts at FBN Quest, said the results were better-than-expected. According to them, while PBT beat their forecast by 64 per cent , the surprise in PAT was greater at 108 per cent. “The positive surprise in earnings was mainly driven by a better-than-expected performance in non-interest income which came in around 49 per cent higher than our forecast. Relative to consensus, Q4 PBT also came in around 28 per cent higher. However, in terms of y/y trends, PBT declined by 15 per cent year-on-year(y/y) mainly because provisions and opex increased by eight per cent and 15 per cent respectively, and base effects (Q4 2016 non-income was also strong for similar reasons to Q4 2017). In contrast, PAT grew by 19 per cent y/y to N27.6 billion, thanks to a positive result of N13.2 billion in other comprehensive income (OCI),” they said.
According to FBN Quest, sequentially, PBT and PAT grew by 30 per cent q/q and 35 per cent q/q respectively, because of a healthy growth of 42 per cent q/q in non-interest income. “On a full year basis, PBT expanded by 16 per cent y/y to N105.2bn. However, PAT fell by 24 per cent y/y because of a higher income tax rate of 25.3 per cent (vs. 20.3 per cent 2016) and a 58 per cent y/y decline in OCI. The 2017 PAT translates to an ROAE of 21.1 – this is amongst the highest in our coverage universe,” they said.
Some investors in the stock market are looking back at the first quarter (Q1) of 2018 with smiles as their investments closed with higher value. The market, which recovered from a three-year decline to close last year on positive note, maintained the momentum in the beginning of 2018. That bullish trend was sustained and boosted the market to a record high on February 2, 2018 when the Nigerian Stock Exchange (NSE) All-Share Index hit 44,639.99, while market capitalisation stood at N16.019 trillion. On that date, the year-to-date growth was 16.7 per cent.
However, profit taking, portfolio rebalancing by institutional investors combined with other factors to later attract the bears. That bearish trend persisted throughout March to reduce the YTD growth 8.5 per cent at the end of the first quarter (Q1) last week.
THISDAY checks showed that despite the reduction in the YTD growth, some stocks still fetched investors significant capital growth, thereby making them not to regret their investments in the equities market. For instance, Unity Bank Plc recorded a gain of 130 per cent in the Q1, just as Caverton Offshore Support Group Plc appreciated by 106 per cent. Investors in Cement Company of Northern Nigeria Plc gained 96.8 per cent, while Wema Bank Plc recorded a growth of 90.3 per cent. NPF Microfinance Bank recorded a growth of 69.6 per cent, just as N.E.M Insurance Plc, Eterna Plc and Sterling Bank Plc chalked up 65 per cent, 63.7 per cent and 62 per cent in that order.
Other top price gainers for the quarter included: FCMB Group Plc (60.8 per cent); Glaxosmithkline Consumers Nigeria Plc (57.3 per cent); Skye Bank Plc, Fidson Healthcare (54 per cent apiece);Beta Glass Plc (47.5 per cent); FBN Holdings Plc (42 per cent); Cutix Plc (39 per cent); Unilever Nigeria Plc (34.1 per cent); C & I Leasing Plc (33.3 per cent); Dangote Flour Mills Plc (31.2 per cent);Flour Mills of Nigeria Plc (28.6 per cent) and Jaiz Bank Plc 28 per cent). Although the market witnessed a decline in the last month of the Q1, the 8.5 per cent recorded for the whole quarter was still in line with the projections made by analysts.
Analysts had said the market would close the year with a growth. According to analysts at Afrinvest West Africa, “Our near term outlook for the equity market remains positive due to improving fiscal and current account balances – supported by rising oil prices – which is expected to have positive knock-on impacts on FX market stability and earnings. However, a major downside risk is the upcoming general elections which could weigh on polity stability and lead to more short-term thinking in economic policymaking.”
Similarly, analysts at Vetiva Capital said: “Despite the 2017 equity market rally driven by a partial liberalisation of the country’s exchange rate regime, the Nigerian Stock Exchange remains relatively undervalued.” They have therefore projected further gains for the equities market in 2018, with an estimated full year return of between 15 per cent and 20 per cent.
Transnational Corporation of Nigeria Plc, Nigeria’s foremost investment conglomerate has announced its financial results for the year ended December 31, 2017, showing improved revenue and return to profitability.
The company recorded revenue of N80.28 billion in 2017, up 35 per cent above the N59.42 billion in 2016. Foreign exchange loss dropped from N18.70 billion in 2016 to N4.55 billion, while net finance cost declined from N26.64 billion to N13. 73billion in 2017.
Consequently, profit before tax grew N12.31 billion compared to a loss before tax of N5.93 billion in 2016, while profit after tax was N10.61 billion in 2017, as against a loss after tax of N1.13 billion in 2016.
Shareholders’ fund rose by 11p per cent from N86.45 billion in 2016 to N95.71 billion in 2017, just as total assets improved by 23 per cent from N232.16 billion in 2016 to N285.52 billion in 2017.
Commenting on the results, the Chief Executive Officer of Transcorp, Mr. Adim Jibunoh said the profit reported in the year was largely a result of increase in power generation by Transcorp Power Limited due to improved gas supply and increased generation capacity.
According to him, available capacity increased from 505MW to 701MW during the year, noting that capacity increase was achieved through carefully planned maintenance programme for our power generation assets and tactical engagement with stakeholders.
Jibunoh said: “Also, our hospitality business remains resilient, posting stronger year-on-year performance. Specifically, we continue to maintain market leadership with occupancy levels that are way ahead of competition. In addition, our second Hotel, Transcorp Hotel Calabar continues on strong performance achieving profitability for two consecutive years. We are confident of improved fundamentals going forward, as we increase our available generation capacity to above 800MW by year-end taking advantage of improving gas situation.
We equally expect to benefit from the upside of the new improved infrastructure upon completion of our upgrade project in Transcorp Hilton Abuja. The upgrade project is currently on track.”
Transcorp had last year said the federal government’s guarantee of N700 billion to the Nigerian Bulk Electricity Trader(NBET), through the Central Bank of Nigeria (CBN), would help ease liquidity challenges in the power sector and incentivise further investment in power generation.
“With this laudable initiative, the risk of not getting paid for power supply has been mitigated and should thus improve our cash-flow and appetite for further investment, as against current situation where we have notable outstanding receivables for our supply. We are now encouraged to generate more, especially as gas supply improves. It is noteworthy that we have also recently invested in additional turbine, which should come onboard and add to our power generation in the second quarter of the year,” the company had said.
After reporting improved performance for the 2017, Guaranty Trust Bank (GTBank) is set to unveil its unaudited first quarter ended March 31, 2018. The bank in a notification to the Nigerian Stock Exchange (NSE), GTBank said its board of directors would meet on April 18, 2018 to consider financial statements.
GTBank had reported gross earnings of N419.2 billion, up marginally from N414.6 billion in 2016. Net interest income rose from N195.4 billion to N246.66 billion, while impairment charges reduced from N65.290 billion to M12.169 billion in 2017. Profit before tax stood at N200.2 billion, representing a growth of 21.3 per cent over N165.1billion recorded in 2016, profit after tax grew faster by 29 per cent from N132.281 billion to N170.469 billion in 2017.
A further analysis of the results showed that the bank’s loan book dipped by 8.9 per cent from N1.590 trillion to N1.449 trillion while customer deposits increased by 3.8 per cent to N2.062trillion from N1.986trillion in December 2016.
The bank’s balance sheet recorded a 3.9 per cent growth in total assets and contingents to N3.845 trillion and shareholders’ funds of N625.2 billion.. In terms of assets quality, non-performing loan (NPL) ratio increased to 7.7 per cent compared with 3.7 per cent in 2016 largely as a result of classification of a single exposure 9mobile.
The bank proposed a final dividend of 240 kobo per share. This will bring the total dividend per share to 270 kobo have paid an interim dividend of 30 kobo last year.
Commenting on the financial results, the Managing Director/CEO of GTBank Plc, Mr. Segun Agbaje, said: “2017 was a pivotal year for the bank. We delivered a strong result in a challenging environment, achieving record growth in earnings, carefully managing cost margins and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”
According to him, the performance demonstrates the fundamental strength of the bank’s franchise as well as the progress they are making in transforming the organisation into a platform on which their customers could build their businesses, connect with their consumers and access all the resources that they need to make their lives better.”
Caverton Offshore Support Group Plc (COSG), a provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria has announced increases in profit before tax (PBT) and profit after tax (PAT).
The audited results showed revenue of N20.5 billion in 2017, up from N19.3 billion in 2016. Operating profit (excluding other income) stood at N4.2billion, compared with N2.2 billion in 2016. PBT rose from N1.1 billion to N3.9 billion in 2017, while PAT improved from N2.6 billion, from N612 million in 2016.
Gross margin was 35 per cent in 2017, down from 40 per cent in 2016, while earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin improved to 28 per cent, from 17 per cent in 2016. Similarly, net profit margin improved from three per cent to 13 per cent.
Commenting on the results, the Chief Executive Officer of COSG, Mr. Bode Makanjuola said that the company remains the leader in offshore support logistics in Nigeria. He stated that part of our strategy to weather the current challenging business environment of the past couple of years is to continue to focus on cost efficiency without compromising on our safety standards.
He added that the company will shortly commence its five- year Chevron contract from April and is confident of securing and renewing support contracts with new and existing clients alike.
“The implementation of our strategy to increase service offerings is also ongoing as the construction of the Maintenance, Repair and Overhaul facility in Ikeja Lagos is at an advanced stage. We continue to explore other innovative solutions in support of deep and shallow water operations in both marine and aviation business,” he said.
Makanjuola disclosed that they have been able to contain the administrative expenses arising majorly from the impact of the government intervention in stabilising the foreign exchange rate market as well as consistent paying down of their loan which resulted in lower finance charge.
He said that as Nigeria gradually moves out of recession, the firm remains optimistic for an improved business operating environment.
“The impending commencement of our helicopter service contract for Chevron, as well as the completion of our MRO in Lagos are just some of the positive developments we are looking forward to. Meanwhile we are doubling efforts to refocus our marine business strategy and are confident of positive results going forward,” he said.