The new, enlarged Cement Company of Northern Nigeria (CCNN) is a stronger platform to capture significant synergies and create value for the benefit of the shareholders in the form of stronger competitive position, economies of scale, enhanced operations and administrative efficiencies which are expected to accrue.
The above were the words of assurance by the Chairman of BUA Group and CCNN, Alhaji Abdul Samad Rabiu after shareholders of CCNN and Kalambaina Cement Company Limited approved the merger of both companies last year. Both firms have BAU Group as parent company but were operating separately before they decided to merge their operations last year.
Rabiu had assured stakeholders of improved benefits post merger. And going by the first quarter(Q1) financial results of CCNN ended March 31, 2019, the shareholders are in for better days.
First financial performance
A look at the performance of CCNN three months after its merger has shown that revenue jumped by 213 per cent from N5.394 billion in the corresponding period of 2018 to N16.886 billion in 2019. This was the highest in the history of the company and it reflected the impact of the increased combined capacity and the gradual realisation of the synergies following the successful completion of the merger with Kalambaina Cement Company Limited.
Volumeincreased by 233 per cent to 411,945 metric tons(mt). Increase in volume sold based on the increased plant capacity from 500,000MT 000metric tonsto 2,000,000mt and improved capacity utilization of the new plant, showing a combined capacity utilisation of 82 per cent.
Also, a strong domestic demand and a ready growing export market to neighbouring countries remain a positive driver for the increase in sales volume experienced in Q1.
Gross profit rose by 239 per cent to N7.689 billion, from N2.263 billion in 2018. In the past four years, CCNN has been spending less on input cost to produce each unit of products. This was maintained in Q1 of 2019 as cost of sales ratio fell to 54.45 percent in March 2019 from 58 percent in the corresponding period of 2018, and 62.50 percent in 2017.
Equally, the improvement in operating performance is due to the new cement plant for which energy costs is cheaper due to coal usage.
CCNN recorded a surge of 255 per cent in profit before tax (PBT) to N5.348 billion in 2019, compared with N1.504 billion in 2018, while profit tax followed same growth trajectory, rising by 235 per cent to N3.636 billion, from N1.083 billion in 2018.
In last five years, CCNN’s profit has been growing steadily with some little slowdown. For instance, between 2015 and 2016,profit after tax fell to N632.04 million to N242.52 million. However, profit began to rise after the country. Hence, CCNN has recorded a surge 236 per cent to N3.636 billion in Q1 of 2019, as against N1.08 billion the previous year.
A further analysis of the performance indicated that the cement firm has been able to turn each Naira invested in sales into higher profit as net margin increased to 21.50 per cent in March 2019 from 20.10 per cent in March 2018, 11.80 percent in 2017, and 6.80 percent in 2016.
Pre-tax profit margin also followed the similar pattern, increasing to 31.70 percent in March 2019, from 27.90 percent in 2018, 15.70 percent in 2017, and 9.40 percent in 2016.
Operating profit margin increased to 31.90 per cent in March 2019 from 26.30 per cent in March 2018, 16.40 percent in 2017, and 10.60 percent in 2016.
CCNN is liquid and it can easily pay off its current liabilities as current ratio improved to 1.5 7 times in March 2019 from 1.50 times the previous year. This implies that CCNN has 1.57 more current assets than current liabilities.
Besides, CCNN has reduced debt in its capital structure as total debt (long and short term) fell by 33.90 percent to N348.61 billion in March 2019 from N52.43 billion the previous year.
Also, the company has CCNN has enough cash to pay debts, reward shareholders in form of dividend, and fund future expansion plans as net cash flow from operating activities surged by 1,881 per cent to N7.31 billion a year ago.
Bright future outlook
Many market analysts have expressed high optimism that CCNN has huge potential to deliver sustainable growth and increase shareholders’ wealth going forward. According to them, there many benefits the manager has brought.
Before now, Rabiu had said the expanded CCNN would remain the market leader in its regional market of North West Nigeria, which is the third largest market for cement in Nigeria by consumption, whilst continuing to explore the huge opportunities that exist in the export markets of Niger, Burkina Faso and the west African region.
“Traditionally, the huge cost of transportation to CCNN’s home region from other cement plants in Nigeria – the nearest being about 900km away – has always given us a strategic advantage in that region over competing cement companies and brands. The expanded entity will leverage on the cost and energy efficiency of the newly commissioned Kalambaina Plant whilst providing additional value through its products in terms of better quality, higher yields and a stronger cement than competing premium cement brands,” he said.
The merger brought the total installed capacity of the new firm to two million metric tonnes per annum(mtpa) and is expected to bring the total capacity of BUA’s cement operations to eight million mtpa as the group has completed its three million metric tonnes per annum Obu II Cement Plant in Okpella, Edo State.
The merger also provides the company other energy sources and broadens its energy mix. CCNN is the only cement plant in Nigeria that relies solely on LPFO and diesel.
Also, merger has provided opportunities for CCNN to expand into new markets, some with export potential such as Burkina Faso, and the Republics of Niger and Benin.
Rabiu had assured that the company’s commitment towards Nigerian economy remains strong, noting that the merger would further boost that commitment.
He said: “Our commitment towards the Nigerian economy remains strong and this new entity further deepens the capital market and is a pointer to the continued resurgence of the Nigerian economy. We remain committed to delivering exceptional value to stakeholders at all times. Innovation, efficiency and best-in-class technology will continue to be the key drivers of our cement business.”
Trading at the stock market remained bearish last week as a combination of profit-taking in bellwethers and negative reactions to financial results released by companies for the first quarter ended March 31, 2019, dominated sentiments of investors.
Consequently, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell by 1.78 per cent to close lower at 29,212.00, while market capitalisation shed N197 billion to be at N10.979 trillion. The year-to-date decline of the NSE ASI worsened to 7.1 per cent as last Friday.
Just like the previous week, the market traded for four days and the bears and bulls controlled two days each. But the bears had the upper hand, leading to a decline of 1.78 per cent at the end of the week.
Trading had started on Monday on a negative note with the NSE ASI falling 0.73 per cent following losses by Guaranty Trust Bank Plc, Stanbic IBTC Holdings Plc and Dangote Cement Plc. The negative trend was sustained on Tuesday with a higher decline of 1.23 per cent due to sell-off in Dangote Cement Plc, Nestle Nigeria Plc, Stanbic IBTC among others.
But the market rebounded on Thursday and Friday, appreciating by 0.04 per cent and 0.14 per cent in that order. However, the gains in the two days were not enough to offset the losses of Monday and Tuesday.
By the close of the week, three of the five major sectors declined led by the NSE Industrial Goods Index that fell 3.0 per cent. The NSE Banking Index trailed with 1.3 per cent, just as the NSE Consumer Goods Index went down by 0.3 per cent.
On the positive side, the NSE Insurance Index rose 1.3 per cent, followed by NSE Oil and Gas Index that appreciated by 0.02 per cent.
Commenting on the market, analysts at Afrinvest (West Africa) Limited said: “We view the market as lacking drivers for a sustained bullish run and so expect the market to continue to trade sideways, with profit-taking and bargain-hunting activities dominating an equal amount of trading session over the short term.”
In their analysis, analysts at Meristem Securities Limited said the negative performance last week was partly due, “to the string of negative first quarter results, which cut across the different sectors of the market.”
According to Meristem, the poor earnings performances were further pointers to weak consumer spending in the economy, even as many of the companies face different operating challenges.
“It is therefore cheery news that the National Assembly passed the 2019 Budget, which includes provisions for the implementation of the new minimum wage. This should strengthen consumer spending, which has been faltering since the exit from recession. On the downside, however, it portends upside inflation risks, with the possibility of constraining the Monetary Policy Committee’s easing posture,” they said.
Meanwhile, an analysis of the other markets in Africa, showed that Nigeria was the second highest loser following Ghana that recorded a decline of 2.4 per cent. Kenya’s NSE 20 went down by 0.6 per cent, while Mauritius’ SEMDEX shed 0.4 per cent. Morocco’s Casablanca MASI closed with a marginal decline and ending its four week’s bullish run. The Egypt EGX30 emerged as the lone gainer last week, rising by 0.3 per cent.
Among the BRICS markets, three of the tracked indices trended southwards. The two markets that closed in the positive territory are South Africa and Russia. The South Africa FTSE/JSE All Share rose 0.5 per cent after President Cyril Ramaphosa said government won’t cut jobs at state power utility Eskom. Similarly, Russia’s RTS marginally inched higher by 0.1 per cent.
Conversely, China’s Shanghai Composite and India’s BSE Sens shed 0.3 per cent following the expiry of Iranian Oil Sanction Waivers on May 2nd, 2019. Also, the Brazil Ibovespa closed the week 0.3 per cent lower.
In Asia and the Middle East, performance was mixed with the bears dominating. The Saudi Arabia’s Tadawul ASI led decliners with 0.7 per cent followed by Thailand’s SET Index and Qatar’s DSM 20 which dipped 0.3 per cent each.
On the positive side, United Arab Emirates ADX General Index led gainers up 2.8 per cent trailed by Turkey’s BIST 100 that added 0.3 per cent.
Following the United States(US) Federal Reserve Bank’s stance on interest rate, performance across the developed market was mixed. In the US markets, the S&P 500 and NASDAQ fell 0.3 per cent each. The UK FTSE All Share index dipped 0.5 per cent, while the France’s CAC 40 declined 0.5 per cent.
On the other hand, the Hong Kong Hang Seng led gainers, rising 1.6 per cent. Germany XETRA DAX followed with gain of 0.5 per cent, while Japan’s Nikkei 225 was flat.
Market turnover
Meanwhile, investors traded 1.470 billion shares worth N15.498 billion in 18,092 deals last week compared with 1.432 billion shares valued at N15.089 billion that exchanged hands in 15,342 deals the previous week. The Financial Services Industry remained the most active, leading the activity chart with 610.138 million shares valued at N5.828 billion traded in 8,012 deals; thus contributing 41.5 per cent and 37.61 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 227.766 million shares worth N777.211 million in 1,558 deals, while the third place was Consumer Goods Industry with a turnover of 154.760 million shares worth N4.496 billion in 3,622 deals. Trading in the top three equities namely, Transnational Corporation of Nigeria Plc, Cement Company of Northern Nigeria Plc and Japaul Oil & Maritime Services Plc accounted for 403.650 million shares worth N2.103 billion in 1,124 deals, contributing 27.46 per cent and 13.57 per cent to the total equity turnover volume and value respectively.
A total of 1.190 million units of Exchange Traded Products (ETPs) valued at N10.967 executed in 12 deals compared with a total of 4,800 units valued at N45, 578.70 transacted the previous week in nine deals.
A total of 14,589 units of Federal Government Bonds valued at N15.164 million were traded last week in 12 deals as against a total of 41,150 units valued at N43.977 million transacted the previous week.
Price gainers and losers
The price movement chart showed that 32 stocks appreciated higher than 30 stocks the previous week, while 44 equities depreciated in price, higher than 40 equities of the previous week.
Japaul Maritime and Oil Services Plc led the price gainers with 39.2 per cent, trailed by Julius Berger Nigeria Plc with 19.6 per cent, while Forte Oil Plc and Jaiz Bank Plc garnered 19.6 per cent and 12.5 per cent respectively. UACN Property Development Company Plc and Transcorp Plc chalked up 12 per cent and 11.6 per cent in that order.
Other top price gainers included: Caverton Offshore Support Services Plc (11.5 per cent); Courteville Business Solutions Plc, Veritas Kapital Assurance Plc (10 per cent apiece); and Dangote Flour Mills Plc (9.9 per cent).
On the contrary, Goldlink Insurance Plc led the price losers with 18.1 per cent, trailed by First Aluminium Nigeria Plc with 12.5 per cent, while Royal Exchange Plc and Total Nigeria Plc went down by 11.5 per cent and 10.9 per cent respectively.
Other top price losers were: Afromedia Plc (10 per cent); MCnichols Plc; Academy Press Plc (9.1 per cent apiece); NPF MFB Plc (9.0 per cent); Cutix Plc (8.7 per cent) and Oando Plc (8.4 per cent).
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 its unaudited results for the quarter ended March 31, 2019.
The results showed profit before tax of N1.22 billion and an after-tax profit of N793 million, as its revenue jumped by 83 per cent, a statement from the organisation disclosed.
Specifically, the unaudited first quarter of 2019 results indicated it realised revenue of N8.3 billion in the period under review, higher than the N4.6 billion recorded in March 2018; operating profit (excluding other income) was N1.88 billion, as against the N849.2 million recorded in March 2018; just as its earnings before interest, taxes, depreciation and amortisation (EBITDA) for the period climbed to N2.2 billion, higher than the N1.2 billion recorded at the end of the comparable period in 2018.
Profitable ratio also indicated gross margin of 43 per cent (40 per cent March 2018).
In the same vein, Caverton’s direct operating cost also climbed by 74 per cent, supporting its earnings per share which also increased by 170 per cent when compared with same period in 2018.
Commenting on the results, COSG’s Chief Executive Officer, Mr. Bode Makanjuola said, “With the 2019 general elections behind us we look forward to favourable government policies in the oil and gas, aviation and financial sectors that will enable us continue to provide the quality of service our clients have become accustomed to as well as positive returns for our shareholders.”
COSG is one of Nigeria’s leading oil services companies providing solutions for a range of multinational companies across aviation and marine services.
Oando Plc has raised investors’ hope for better returns as it posted improved results for the first quarter (Q1) ended March 31, 2019.
The company, which recorded higher profit in 2018 sustained the positive performance in Q1, posting a revenue of N168 billion, up by 12 per cent from N150.6 billion posted in the corresponding period of 2018. Profit-after-tax increased by 11 per cent to N4.6 billion compared with N4.2 billion in Q1 2018. The Group also decreased its total borrowings by five per cent to N200.9 billion compared to N210.9 billion in 2018 while its long term borrowing decreased to N75.8 billion compared to N76.8 billion.
Also, the figures reflected an increase in production by 11 per cent at 43,745boe/day compared to 39,556boe/day in the same period of 2018 in Oando’s upstream subsidiary.
Despite its partial divestment from its marketing subsidiary the company continues to increase its market share in the downstream sector through its trading business, Oando Trading which recorded an 11 per cent increase year-on-year, driven by a strong performance in its crude oil trading division and a three per cent increase in turnover to $312 million, from $301 million.
Commenting on the results, the Group Chief Executive of Oando Plc said: “Our results reflect the progress made over the last few quarters and provides an indication of our expectation for the year. Now that our debt profile is down by 78 per cent from $2.5billion as of December 2014 to $ 558 million, and our de – leverage programme is 90 per cent complete with most of our non-core operations divested for good value, we can now focus on steady growth in our upstream entity. ’’
In addition to its positive results Oando has recorded a few milestones in the quarter under review, notably its recent divestment of its 25 per cent residual interest in Axxela Limited to Helios Investment, a leading private equity firm with a focus on investments in Africa, signifying a complete divestment from its midstream business.
According to the company, the move speaks volumes of Oando’s willingness to restructure its business for increased revenue generation by focusing on its dollar earning businesses, Oando Energy Resources (OER), its exploration and production subsidiary, and Oando Trading its trading business.
Tinubu said: “The completion of this divestment signifies another win for the Company. 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 favourably positions us to significantly reduce our debt profile and remain focused on growth through our dollar denominated businesses.”
Shareholders of Fidelity Bank Plc have approved the payment of a total dividend of N3.19 billion declared by the board of directors for the financial year ended December 31, 2018.
The dividend, which translates to 11 kobo per shares was approved by shareholders at the bank’s 31st annual general meeting (AGM) held in Lagos at the weekend.
Speaking at the meeting, National Chairman, New Dimension Shareholders Association, Mr. Patrick Ajudua, commended the board and management for maintaining a good dividend policy. He also advised the board to adopt strategies that would lead to the sustenance of the growth and profitability of the bank.
Also speaking, President of the Nigerian Shareholders’ Solidarity Association, Chief Timothy Adesiyan, said the bank had maintained steady growth in spite of challenging environment.
He commended the bank’s effort in ensuring aggressive loans recovery which impacted positively on its non-performing loan.
“We have a solid bank handled by professionals and our bank is in good hands,” Adesiyan said.
Addressing the shareholders, the Managing Director/Chief Executive Officer of Fidelity Bank Plc, Mr. Nnamdi Okonkwo, assured them of consistent and enhanced dividend in future.
Okonkwo said the bank had paid consistent dividend in the last 12 years, noting that the trend would be maintained.
According to him, investment in the bank is the for future, stressing that, the current dividend policy was to prepare for rainy days.
“We want the bank to be here tomorrow as going concern and we need capital to continue to be strong,” Okonkwo said.
He stated that that bank would continue to invest heavily in technology in order to enhance activities through digital channels.
He added that the bank would continue to grow savings deposit, disclosing that savings deposits doubled in the last five years.
Speaking on the 2018 financial performance, he said: “Our 2018 audited financial statement shows a strong double-digit growth in earning assets, customer deposits and revenues.”
He explained that the bank was able to sustain cost discipline with growth in total operating expenses remaining below average headline inflation in 2018.
Also speaking, the bank’s Chairman, Mr. Ernest Ebi, assured the shareholders that the board and management’s focus was to build a very strong bank that they would proud of.
Ebi, said the bank would remain committed to corporate governance, risk management and strong capital in line with its five-year strategic plan aimed at delivering returns to all stakeholders.
Shareholders of Sterling Bank Plc Thursday restated their support for the board and management of the bank based on the improved performance recorded in the 2018 financial year.
Speaking on the performance of the bank at the 57th annual general meeting (AGM) in Lagos, President of the Nigerian Shareholders’ Solidarity Association (NSSA), Chief Timothy Adesiyan said the performance of the bank was highly commendable in view of the significant improvement in most of the indices.
According to him, although the bank is not paying any dividend to shareholders for the year, they are happy with the capital appreciation of the share price and the future bountiful dividends that await they.
Also commenting, National Coordinator Shareholders United Front (SUF), Mr. Gbenga Idowu, said the results reflected a very good start by Mr. Abubakar Suleiman as CEO of the bank, who took over from Mr. Yemi Adeola a year ago..
In his address, Chairman of the board of directors of the bank, Mr. Asue Ighodalo said:“Our financial results in 2018 reflect an even stronger business performance despite the impact of an ailing operating environment.”
He explained that the bank sustained earnings growth momentum in 2018 as gross earnings grew by 14 per cent to N152.2 billion from N133.5 billion recorded in 2017.
According to him, despite the fact that operating expenses increased by 26.4 to N66.9 billion due to investment in human capital and technology, the bank grew profit before tax by 17.1 per cent to N9.5 billion and profit after tax by 14.9 per cent to N9.2 billion.
Ighodalo said Sterling Bank ended 2018 with an improved balance sheet position as total assets grew steadily by about 2.9 percent to N1.1 trillion.
“We continued to sustain operational efficiencies and our focus in growing the bank’s retail franchise. This resulted in an improved deposit base and moderate growth in our loan book, specifically riding on the 108.3 percent growth in retail and consumer loans delivered mainly by SPECTA – Nigeria’s fastest digital lending platform,” he said.
The chairman said the bank was able to maintain the cost of funds at 7.4 per cent amidst high-interest environment which persisted for a significant part of the year.
Looking ahead, Ighodalo said the bank expects the first half of the year to be dominated largely by election activities at the expense of economic growth, heightened by subdued foreign capital inflows, increased pressure on the Naira and accelerated foreign exchange intervention programme while the second half would witness the likelihood of stronger consumer confidence.
Shareholders of pan-African Financial United Bank for Africa(UBA) Plc yesterday approved the N29.9 billion paid for the 2018 financial year, while hailing the consistent strong performance of the group.
The shareholders, who gave the approval at the 57th annual general meeting (AGM) in Lagos, commended the staff, management and the board on impressive performance of the financial institution.
For instance, the President, Association for the Advancement of the Rights of Nigerian Shareholders, Dr Faruk Umar, said the current management was fulfilling the vision of the founders and past leaders of UBA in creating a truly pan-African bank.
“I want to specially commend the management of UBA under the leadership of the Group Managing Director/CEO, Kennedy Uzoka, for a selfless commitment and hard-work towards building an enduring institution that we and future generations can be proud of. More so, I am impressed by the tenacity of this management in delivering on the vision of shareholders to create a leading and dominant pan-African financial service institution with global reputation and culture. Whilst it may have taken us some time to appreciate the cutting-edge vision of Chairman, Mr. Tony Elumelu, in expanding our group’s operation to Africa, we are today excited by the performance and contribution of these operations to our Group’s earnings,” he said.
Addressing shareholders, Elumelu, disclosed the upgrade of operations in the United Kingdom and formal opening of the Mali business, adding that the team in both countries were set to change the narrative of banking, and would thus strengthen the earnings growth trajectory of the Group, through their respective positive contribution.
He said: “We are optimistic about the policy environment in most African economies, where we operate, as we expect diligent implementation of fiscal policies to help stimulate inclusive economic growth, ease macro pressures and lower the cost of doing business. I am very optimistic that we will sustain the strong growth trajectory, as we continue to gain market share across Africa, leveraging our core values of Enterprise, Excellence and Execution.”
On his part, Uzoka, promised shareholders that the team remained poised to do more in the coming year.
According to him, UBA Group has one of the highest capital adequacy ratio in the industry, as its BASEL II CAR stands at 24 per cent as at December 31, 2018, thus reinforcing its capacity to support customers at all times and demonstrating the Group’s capacity to grow over the medium term.
“We are on a new cost optimisation journey and we are diligent in executing far-reaching cost-efficient initiatives, which will complement our revenue growth drive in moderating the cost-to-income ratio towards our desired target. Ultimately, we look forward to delivering superior returns to shareholders in the years ahead,” he said.
The Nigerian Stock Exchange has fined Access Bank Plc, Diamond Bank Plc and First Aluminium Plc a total of N8.12m for disclosure violations.
The NSE, in its latest X-Compliance report, said the Access Bank and Diamond Bank were fined for failing to disclose the resolutions passed at the meeting of their board of directors.
Access Bank was fined N4.41m, while Diamond Bank Plc was fined 3.23m, according to the report, which brings the total amount to be paid by the resulting bank from the merger to N7.64m.
First Aluminium was fined N476,280 for non-dispatch of the notice of its Annual General Meeting and annual reports to shareholders 21 days before the date of the meeting.
The NSE said every listed company was required to provide the Exchange with timely information to enable it efficiently perform its function of maintaining an orderly market.
It stated that in accordance with the provisions of Appendix III: General undertaking (equities), the rulebook of the Exchange, 2015 (issuers’ rules) and the Exchange’s circular no. NSE/LARD/LRD/CIR3/17/05/12 on publication of announcements or press releases via the issuers’ portal, listed companies were required to obtain prior written approval from the Exchange before publications that affect shareholders’ interest were made in the media or via the issuers’ portal.
The NSE said in addition, companies were also required to disclose material information to the Exchange and publish the information in their annual reports.
The report read in part, “Access Bank, Diamond Bank and First Aluminium breached certain provisions of the listings rules and were sanctioned accordingly.”
So far in the year, Only Access Bank, Diamond Bank and First Aluminium have committed disclosure violations and have been fined accordingly.
The stock market pared losses of many weeks as the Nigerian Stock Exchange (NSE) All-Share Index rose by 1.78 per cent to close at 30,086.31 last week, compared with a decline of 0.19 per cent the previous week.
Similarly, market capitalisation appreciated by same margin to close higher at N11.301 trillion. In the same vein, all other indices finished higher with the exception of the NSE Oil/Gas Index that depreciated by 2.12 per cent.
Market analysts said the recovery in the market could partially be attributed to investors’ reaction to the financial results declared by some companies which included dividends recommendation.
FBN Holdings Plc announced a dividend of 26 kobo for the year ended December 31, 2018, while Nigerian Aviation Handling Company Plc recommended a dividend of 25 kobo for the 2018 financial year. AIICO Insurance Plc declared a dividend of three kobo, while Prestige Assurance Plc and Regency Alliance Insurance Plc recommended a dividend of three kobo apiece.
FBN Holdings Plc’s results witnessed an improvement, showing a profit after tax (PAT) of N59.667 billion, which is a jump of 58 per cent compared with N37.708 billion posted in 2017.
A breakdown of the audited results showed that FBN Holdings recorded gross earnings of N583.477 billion, indicating a marginal decline from N595.446 billion recorded in 2017. Net interest income reduced from N332 billion to N284.168 billion, while impairment charges declined by 43 per cent from N150.424 billion to N86.911 billion.
In terms of first quarter (Q1) results, Access Bank Plc posted PAT of 86 per cent in 2019. Details of the results showed that net interest income rose to N56.838 billion, from N44.653 billion, while net fee and commission income stood at N13.068 billion as against N13.923 billion in 2018. Net impairment charges fell from N4.961 billion to N3.375 billion in 2019. The financial institution also reduced its personal expenses from N12.290 billion to N12.786 billion. PAT grew by 86 per cent from N22.116 billion in 2018 to N41.147 billion in 2019.
Commenting on the results, Group Managing Director/ Chief Executive Officer of Access Bank Plc, Mr. Herbert Wigwe said: “The group delivered solid earnings underscoring the value potentials of the newly expanded business model. Gross earnings showed a 16 per cent increase to N160.1bn from the prior year, comprising strong earnings on interest income and non-interest income of 69 per cent and 31 per cent respectively, whilst Profit before Tax (PBT) grew to N45.1 billion.
Similarly, Guaranty Trust Bank Plc’s PAT rose 10.37 per cent from N44.67 billion in 2018 to N49.302 billion in 2019. Customers’ deposits also rose by 6.0 per cent to N2.41 trillion in March 2019 from N2.274trillion in December 2018, whilst the bank’s loan book grew by 1.6 per cent from N1.262trillion as at December 2018 toN1.282trillion in March 2019. Its balance sheet remained strong with the bank closing the quarter with total assets of N3.556 trillion and shareholders’ funds of N627.2 billion. In terms of assets quality, non-performing loan (NPL) ratio and Cost of Risk closed 7.03 per cent and 0.05 per cent in March 2019 from 7.30 per cent and 0.34 per cent in December 2018 respectively.
According to the Managing Director/CEO of GTBank Plc, Mr Segun Agbaje, “Going into 2019, we knew that it would be a challenging year, but our strategy and unwavering focus on delivering value for our customers and shareholders continues to underpin our ability to consistently deliver solid results despite changing market variables. We carried on the momentum of the previous year, posting strong growth in earnings, effectively managing costs and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”
On its part, Zenith Bank Plc announced gross earnings of N158.1 billion in Q1 of 2019, down seven per cent from N169.2 billion in the corresponding period of 2018. However, net interest income rose 23 per cent from N69.997 billion to N86.137 billion in 2019. The bank reduced its operating expenses by four per cent from N61.701 billion to N59.404 billion. PAT rose seven per cent to N50.2 billion, compared with N47.79 billion in 2018.
According to bank, the growth in net interest income and operating income by 23 per cent and one per cent respectively mitigated the decline in gross earnings. It noted that the effective management of cost-to-income ratio, cost of funds and cost of risk offset top-line declines to deliver an enhanced operating income in the period.
“Our risk and asset quality continues to improve as cost of risk dropped significantly by 52 per cent from 0.9 per cent in the prior year to 0.4 per cent for the period. This was achieved as impairment charges declined by 54 per cent(N2.5billion year on year reduction). Our cost of funds also improved, declining by 25 per cent from four per cent Q1 2018 to three per cent Q1 2019. This was supported by a 22 per cent decrease in interest expense of N10billion over the same period, affirming the Group’s robust treasury and liquidity management. Our prudent cost management led to a five per cent decline in our cost-to-income ratio by five per cent from 53.3 per cent in 2018 to 50.9 per cent in the period with an absolute reduction in operating expenses by N2.3 billion year-on-year,” the bank explained.
Market Turnover
Meanwhile, a total turnover of 988.692 million shares worth N11.432. billion in 13,596 deals were traded last week by investors down from 1.770 billion shares valued at N15.264 billion that exchanged hands the previous week in 17,015 deals. The market opened for four trading days last week as the Federal Government of Nigeria declared Friday 19th April 2019 (Good Friday) and Monday 22nd April 2019 (Easter Monday) Public Holidays to mark the end of the End of the Lenten season and Easter celebrations.
The Financial Services Industry led the activity chart with 766.191 million shares valued at N7.261 billion traded in 7,820 deals, thus contributing 77.50 per cent and 63.51 per cent to the total equity turnover volume and value respectively. The ICT Industry followed with 74.769 million shares worth N24.600 million in 212 deals. The third place was Consumer Goods Industry with a turnover of 48.022 million shares worth N3.095 billion in 2,374 deals. Trading in the top three equities namely, Union Bank of Nigeria Plc, Access Bank Plc and Guaranty Trust Bank Plc accounted for 355.043 million shares worth N4.845 billion in 2,133 deals, contributing 35.91 per cent and 42.38 per cent to the total equity turnover volume and value respectively.
There was no Exchange Traded Products (ETPs) traded during the week compared with a total of 13,740 units valued at N215,010 that was transacted the previous week in two deals. A total of 14,246 units of Federal Government Bonds valued at N14.980 million were traded last week in 17 deals compared with a total of 787,527 units valued at N795 million transacted the preceding week in 26 deals.
Price Gainers and Losers
The price movement chart showed that 33 equities appreciated in price during the week, lower than 35 in the previous week, 33 equities depreciated in price, higher than the 31 equities of the previous week. Chams Plc led the price gainers with 28.5 per cent, trailed by First Aluminium Nigeria Plc with 28.1 per cent. Dangote Flour Mills Plc with 27.3 per cent, just as Access Bank Plc and AIICO Insurance Plc garnered 15.1 per cent and 10.2 per cent in that order.
Other top price gainers are: The Initiates Plc (9.5 per cent); Livestock Feeds Plc (9.0 per cent); Cadbury Nigeria Plc (8.9 per cent); Nestle Nigeria Plc (8.5 per cent); and Consolidated Hallmark Insurance Plc (8.3 per cent).
Conversely, Associated Bus Company Plc led the price losers with 17.5 per cent, trailed by Royal Exchange Plc with 12.0 per cent. C & I Leasing Plc shed 9.8 per cent. A.G Leventis Nigeria Plc, shed 9.8 per cent and 9.6 per cent apiece.
UACN Property Development Company Plc, John Holt Plc and Vitafoam Nigeria Plc went down by 9.6 per cent apiece. Julius Berger Nigeria Plc and Niger Insurance Plc depreciated by 9.0 per cent each.
Guaranty Trust Bank (GTB) Plc has recorded a profit before tax (PBT) of N56.984 billion for the first quarter (Q1) March 31, 2019, showing an increase of 8.3 per cent, compared with the N52.624 billion recorded in the corresponding period of 2018.
Profit after tax (PAT) rose 10.37 per cent N44.67 billion in 2018 to N49.302 billion in 2019. Customers’ deposits also rose by 6.0 per cent to N2.41 trillion in March 2019 from N2.274trillion in December 2018, whilst the bank’s loan book grew by 1.6 per cent from N1.262trillion as at December 2018 toN1.282trillion in March 2019.
The bank’s balance sheet remained strong as it closed the quarter with total assets of N3.556 trillion and shareholders’ funds of N627.2 billion. In terms of assets quality, non-performing loan (NPL) ratio and Cost of Risk closed 7.03 per cent and 0.05 per cent in March 2019 from 7.30 per cent and 0.34 per cent in December 2018 respectively. In addition, coverage for NPL stood at 90.12 per cent Commenting on the results, the Managing Director/CEO of GTBank Plc, Mr Segun Agbaje, said: “Going into 2019, we knew that it would be a challenging year, but our strategy and unwavering focus on delivering value for our customers and shareholders continues to underpin our ability to consistently deliver solid results despite changing market variables. We carried on the momentum of the previous year, posting strong growth in earnings, effectively managing costs and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”
He added that: “Whilst ensuring the long-term growth of our business is the greatest value that we can create for our communities, we are also leveraging our resources, expertise and network to help people thrive. That’s why, from April 28 to May 1, 2019, we are organizing the biggest food and drink festival in Africa to give small businesses in the food industry the platform, network and access to the markets that they need to grow.”
The bank explained that it had continued to be best in class in terms of profitability, efficiency and capital among peers and other financial institutions in Nigeria.
“This is evidenced by its earnings per share of N1.74, Return on Equity (ROAE) of 32.79 per cent, Cost to Income Ratio of 38.64 per cent and Capital Adequacy of 22.25 per cent. These metrics are a testament to the efficient management of the Bank. In recognition of the bank’s bias for world class corporate governance standards, excellent service delivery and innovation, GTBank has been a recipient of numerous awards over the years.
