Guaranty Trust Bank Plc (GTBank) thursday became the first bank to release its financial performance for the first quarter ended March 31, 2018. According to the results made available through the Nigerian Stock Exchange (NSE), GTBank Plc recorded a profit after tax (PAT) of N44.670 billion, up by from N41.471 billion in the corresponding quarter of 2017. The bank ended the period with net interest income of N59.689 billion, down from N66.129 billion in 2017. Loans impairment charges fell from N3.412 billion in 2017 to N1.639 billion.
Fees and commission income improved from N13.68 billion to N15.22 billion, while profit before tax (PBT) grew from N50.392 billion to N52.624 billion in 2018. A further breakdown of the results showed that deposits from customers rose from N2.062 trillion to N2.214 trillion. However, loans and advances fell marginally from N1.449 trillion to N1.354 trillion.
Commenting on the results, analysts at FBN Quest said the single-digit in PBT growth was driven by a 52 per cent y/y reduction in loan loss provisions and a 41 per cent growth in non-interest income.
“The growth in non-interest income was largely underpinned by foreign exchange (FX) revaluation gains of N5.5 billion (vsN306.4 million Q1 2017). In contrast, funding income declined by 10 per cent. Further down the PAT grew by eight per cent to N44.4 billion, thanks to a lower effective tax rate of 15.1 per cent vs. 17.7 per cent Q1 2017. Sequentially, PBT grew five per cent quarter on quarter (q/q), again, the reduction in loan impairment charges was the major driver. However, PAT fell by 13 per cent q/q because of a 50 per cent q/q spike in taxation. Compared with our forecasts, PBT and PAT beat by six per cent and eight per cent respectively, because non-interest income surprised positively.
They explained that in terms of balance sheet trends, GTBank’s loan book declined by around seven per cent q/q, while deposits grew by seven per cent q/q.
“On its Q4 conference call, management had guided to loan growth of around 10 per cent year-on-year (y/y), underpinned by improvements in macro-economic fundamentals. As such, we had expected to see some level of loan growth in Q1 2018. Management had also guided to subdued PBT growth of around 2.4 per cent for 2018E. The Q1 2018 results suggest that it may be tracking slightly ahead of guidance and imply a 2018E Return on average equity (ROAE) of more than 25 per cent,” FBN Quest said.
The Minister of Finance Mrs. Kemi Adeosun and aggrieved shareholder groups yesterday were at daggers drawn over the events in the last one week pertaining to the lifting, reinstatement and lifting again of the technical suspension placed on Oando’s shares traded on the Nigerian Stock Exchange (NSE) and the minister’s subsequent removal of the acting director-general of the Securities and Exchange Commission (SEC), Dr. Abdul Zubair over the fiasco and his replacement with Ms. Mary Uduk at the weekend.
While the shareholder groups have accused Adeosun of “unwholesome interference” in the nation’s capital market and meddling in the operations of SEC, and demanded her immediate sack, the minister has denied the allegations, saying the shareholder groups were speaking out of ignorance.
According to Adeosun, she had to suspend Zubair at the weekend because she had pointedly asked him not to lift the technical suspension on the energy company’s shares the week before last until a committee comprising representatives from her ministry, SEC, the NSE and the Johannesburg Stock Exchange (JSE), where Oando has a dual listing, had reviewed the report of the forensic audit submitted by the team of professionals appointed by SEC to investigate the company.
She said in spite of her directive, SEC still went ahead to issue a memo to the NSE lifting the technical suspension the market regulator had placed on the shares of Oando since October last year.
But in a joint statement in Lagos yesterday, the shareholder groups – Proactive Shareholders’ Association of Nigeria (PROSAN), Trusted Shareholders’ Association of Nigeria (TSAN) and the Oando Shareholders’ Solidarity Group (OSSG) – alleged that in the minister’s desperation to shield Oando from probe, “Adeosun has inevitably caused untold harm both to the independence of SEC and the Nigerian capital market”.
The statement was issued after SEC penultimate week said it had concluded its forensic audit of Oando without making public the outcome of the audit on the energy firm, following which the capital market regulator lifted, reinstated and again lifted the technical suspension placed on the company’s shares in a space of 24 hours last week, culminating in the removal of Zubair by the finance minister, and his replacement with Ms. Uduk.
Oando has been under investigation by the SEC after two major shareholders of the company, in separate petitions submitted last year to the capital market regulator, accused Oando’s management of financial mismanagement, violation of corporate governance tenets and running the company aground.
Following its preliminary investigation of the petitions, SEC appointed a team of professionals to carry out a forensic audit of Oando.
But before the forensic audit could proceed, Adeosun had suspended the substantive director-general of SEC, Mr. Mounir Gwarzo over his alleged award of contracts to firms tied to him and his wife and for approving and paying a severance package of N104 million to himself.
The panel she set up to investigate him subsequently pronounced him guilty of the allegations and recommended his sack and further investigation and prosecution by the anti-corruption agencies.
In his place, she appointed Zubair to act as the director-general of SEC, only for the latter to be ousted for “miscommunication” on lifting the technical suspension on Oando’s shares.
In the statement signed by the National President of TSAN, Alhaji Mukhtar Ismail Mukhtar, the National Coordinator, PROSAN, Mr. Taiwo Oderinde, and the Coordinator, OSSG, the shareholders yesterday criticised the minister for what they described as her “unwholesome and unpatriotic” actions with regards to the probe of Oando and therefore urged President Muhammadu Buhari to as a matter of urgency relieve her of her position in order to prevent further damage to the Nigerian capital market.
“We wish to bring the attention of President Muhammadu Buhari, Vice-President Yemi Osinbajo and all Nigerians to the unwholesome, unpatriotic and strange actions of the Minister of Finance, Mrs. Kemi Adeosun with regards to the probe of Oando Plc.
“You may recall that since early last year, Oando has been enmeshed in a series of crises bordering on abuse of corporate governance and alleged gross financial mismanagement.
“The internal auditors of Oando Plc, Messrs Ernst & Young, in the company’s financial report last year expressed doubts over its ability to continue as a going concern because its liabilities exceeded its assets.
“As concerned shareholders, we sent petitions to the Securities and Exchange Commission (SEC) and to the House of Representatives Committee on Capital Market and Institutions.
“The committee mandated SEC to investigate these allegations, culminating in the setting up of a committee by SEC to carry out a preliminary investigation of the company’s affairs.
“SEC’s preliminarily investigation, as disclosed by the commission in a letter dated October 17, 2017 and signed by its Head of Legal Unit, Braimoh Anastasia, unearthed several malpractices in the company.
“These included insider trading, declaration of dividends from unrealised profits, release of false financial statements to the public, and the disposal of assets without the knowledge of the regulatory body in contravention of the Investment and Securities Act (ISA) 2007, among several other infractions.
“These weighty findings compelled the suspension of Oando shares on the floor of the Nigerian Stock Exchange (NSE) and the Johannesburg Stock Exchange (JSE) to pave way for a more thorough investigation via a forensic audit ordered by SEC,” the shareholder groups recalled.
They alleged that the forensic audit has been stalled due to the unwholesome interference by the finance minister to the detriment of Oando shareholders and the entire Nigerian capital market.
They also alleged that Gwarzo and Zubair were removed by Adeosun because they resisted her plan to shield the management of Oando from probe.
“It must concern Mr. President, Mr. Vice President and all Nigerians that Mrs. Adeosun has now removed two SEC DGs from their positions all in a desperate attempt to shield Wale Tinubu and the present management of Oando from probe.
“These men have been sacked from their positions because they refused to stop the probe of Oando.
“Zubair was sacked because he initially resisted Adeosun’s attempt to forcefully remove the suspension placed on the shares of Oando to preserve investors’ funds.
“Unfortunately, she had her way and the lifting of the suspension is part of a grand plan to sweep the weighty allegations against Oando under the carpet.
“This is clearly a negation of the anti-corruption stance of the present administration and a systematic destruction of the Nigerian capital market.
“The show of shame exhibited last week where the Nigerian Stock Exchange was made to implement three different directives with regards to the suspension of Oando shares within 24 hours should worry the federal government and well-meaning Nigerians.
“It sent very bad and negative signals to investors all over the world. The attendant negative impact of Adeosun’s meddlesomeness to protect some entrenched interests will haunt the market for a long time to come.
“Consequently, we believe the sack of the minister by President Muhammadu Buhari is the only way to show that the federal government remains committed to the fight against corruption in all sectors of the economy,” the shareholders added.
When contacted on the issue, Adeosun, in a phone interview from London yesterday, denied the allegations by the shareholder groups.
She informed THISDAY that she was aware of the attempt to lift the technical suspension on Oando’s shares penultimate Friday but instructed Zubair not to do so until a committee comprising representatives from her ministry, SEC, NSE AND JSE had seen the report.
She said Zubair complained at the time that the professional team led by the audit firm Deloitte had not released the report because they had not been paid their fees, following which she gave approval that the fees amounting to N60 million be paid from the Capital Market Development Fund and not by Oando as it was an interested party and the company under investigation.
“However, much to my shock, while I was at the FEC (cabinet) meeting last week where our phones are not with us, an aide came to me to inform me that the technical suspension on Oando shares had been lifted.
“On getting the information, I contacted Zubair, who blamed a deputy director for releasing the letter to the NSE despite my instruction that the technical suspension on the shares should not be lifted.
“That was what led to the lifting, reinstatement and then final lifting of the technical suspension placed on the shares of Oando last Wednesday,” she revealed.
When asked why she did not insist that trading on the shares should remain suspended when she discovered that SEC officials had flouted her instructions, Adeosun said the damage had already been done.
“I am certain some officials of SEC had been induced and went behind my back while I was at the FEC meeting and incommunicado to lift that suspension, and when they heard I had been informed, they rushed again to reinstate it.
“But because of the terrible signals this had already sent to local and international investors, it was decided that the technical suspension should be lifted on Oando’s shares.
“What happened that day was that we had been outplayed because they went against my directive and waited for me to be at the FEC meeting, hence my decision to remove Zubair.
“This, however, will not stop us from the reviewing the report of the forensic audit of Oando, following which the findings will be made public and actions taken against any party found wanting in the management of the company,” she said.
Adeosun also revealed that the SEC deputy director who sent the initial letter on Wednesday to NSE lifting the technical suspension on Oando’s shares, had been sanctioned.
The Securities and Exchange Commission (SEC) yesterday said it would hold deeper discussions on the implementation of the 10-year capital market master plan as well as other initiatives for Nigeria’s capital market with stakeholders at its forthcoming Capital Market Committee (CMC).
A statement from the SEC in Abuja explained that the CMC meeting scheduled to hold in Lagos would be expanded to accommodate a diverse group of relevant stakeholders in Nigeria’s capital market.
According to it, the 10-year master plan for the Nigerian capital market is expected to refocus the market and help double its size over time as well as grow the economy.
It noted that since it unveiled the masterplan in November 2014, it has vigorously implemented some initiatives in it with the aim of attracting more investors to the market.
“The SEC is set to host the first CMC meeting for 2018. The meeting is scheduled to hold at the Federal Palace Hotel and top on the agenda would be the capital market master plan implementation and other capital market initiatives,” said the statement.
SEC equally explained that some of the initiatives in the masterplan which it has implemented include direct cash settlement; dematerialisation; and e-dividend registration, which it added have promoted transparency; protect and enhance investors’ confidence in the capital market.
“The SEC therefore enjoins all shareholders to take advantage of the initiatives introduced in the capital market aimed primarily at strengthening the market and accelerating economic development.
“This is in consonance with the present administration’s economic strategy focused on deepening the capital market as a vehicle for encouraging a private sector-led economy with enhanced productivity,” it explained.
On the stakeholders expected at the CEC meeting, SEC stated: “Those who have been invited to attend the expanded session are CEOs of all registered capital market firms, i.e. broker dealer capital market solicitors; custodians; fund managers; issuing houses; rating agencies; registrars; reporting accountants; trustees; and consultants.
“Others are Chief Executive Officers of the Nigerian Stock Exchange (NSE); National Association of Securities Dealers (NASD); the Financial Markets Dealers Quotations (FMDQ); Africa Exchange Holdings (AFEX); Nigeria Commodity Exchange (NCX); Central Securities Clearing System (CSCS); Chartered Institute of Stockbrokers (CIS); as well as representatives of relevant financial services’ agencies; among others.”
Indigenous pharmaceutical firm, Fidson Healthcare Plc has reported a 235 per cent growth in profit after tax (PAT) to N1.1 billion for the year ended December 31, 2017, from N317 million in 2016.
Details of the audited financial results showed that Fidson reported a revenue of N14.056 billion, up growth 84 per cent from N7.655 billion in 2016.
Similarly, cost of sales increased by 91 per cent from N3.6 billion in 2016 to N6.9 billion in 2017. There was an increase of a 53 per cent in total overhead (administrative and selling and distribution expenses) from N3.1 billion in 2016 to N4.7 billion in 2017, which is due to an increase in the marketing and distribution expenses. Finance cost also increased by 45 per cent from N690 million to N1 billion in 2017.
According to the company, the increase in finance cost is mainly due to increased working capital to drive growth and a hike in interest rates from financial institutions.
Despite the rise in total cost, the company recorded a 127 increase in operating profit which grew from N1.1 billion in 2016 to N2.5 billion in 2017.Profit before tax (PBT), rose by 256 per cent from N443 million in 2016 to N1.57 billion in 2017, while PAT grew from N317 million to N1.1 billion. This growth led the company to close the year with an earnings per share 71 kobo, up from 21 kobo in 2016.
Following this impressive result, the company would be proposing dividend per share of 20 kobo which is 300 per cent higher than the five kobo paid the previous year.
According to the company, the significant competitive advantage of its World Health Organisation(WHO) certifiable plant is already evident after one full calendar year in operation.
“Products from the new facility as well as volume increase from existing products were largely responsible for this remarkable growth. The plant increased the company’s factory-based revenue by over 200 per cent in 2017, primarily due to an increase in production volumes and the introduction of new product lines. A portion of its new products are medicines that cater to low income earners, with the quality consumers have come to expect from Fidson,” it said.
Fidson said it is highly focused on extensive brand building as part of its long-term strategy and aims to expand its Intravenous fluid lines in order to meet demands.
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.
