Shareholders of Guinness Nigeria Plc, yesterday approved the plan by the board to raise a total of N40 billion by way of rights issue to the existing shareholders.
Rights issue is an issue of shares offered at a special price by a company to its existing shareholders in proportion to their existing shares. In a rights offering, the subscription price at which each share may be purchased is generally at a discount to the current market price.
This is the first offer in the market for the year, and already there are scepticisms about the ability of the shareholders to fully subscribe to the offer, given the prevailing economic recession. This is particularly so given the very high inflation of about 18.5 percent and weakening purchasing power, thereby compounding the illiquidity in the stock market.
For Guinness, the additional fund will come in handy to pull it out from current misfortune, haven reported a pre-tax loss of -N4.4billion in 2016 largely driven by increases in net interest expense The Guinness shareholders also authorised the directors to apply any outstanding convertible loan, shareholder loan, or other loan facility due to any person from the company towards the payment for any rights or shares subscribed for by such a person under the rights issue.
Guinness Nigeria, a subsidiary of Diageo Plc, had announced at the end of 2016, its intention to offer a Rights Issue as part of plans to optimise its balance sheet and improve its financial flexibility.
Speaking at the firm’s Extra-Ordinary General Meeting (EGM) held in Lagos on Tuesday, the shareholders stressed the need for the brewing company to ensure that the capital would impact on the financial performance of the Nigeria business and help mitigate the impact of increasing finance costs in its operations.
For instance, the former President, Independent Shareholders Association of Nigeria, Sunny Nwosu, said the rights issue was long overdue, urging shareholders to participate in it to enable them grow their dividend.
The President, Nigerian Shareholder Solidarity Association, Timothy Adeshiyan stressed the need for shareholders to take their rights to increase their holdings in the company.
“If you do not take the opportunity, the holdings of our technical partners will increase but if you want it to reduce, you have to take the rights.”
The Chairman of the company, Babatunde Savage, explained that the volatility of the economy has impacted negatively on the fortunes of the manufacturing sector.
Savage disclosed that Diageo, the parent company rescued Guinness with a soft loan to procure it’s raw materials, adding that the loan as of September 2016 stood at N9.8 billion.
“Some companies are closing down while others are retrenching their staff. To procure foreign exchange is a problem. Diegio gave us loan to procure raw materials in foreign currency and that is the advantage of being a multinational firm.
“We did an analysis of our five years cash flow and we decided that there was need for us to do a capital enhancement of the business. We would continue to ensure that there is fairness. The confidence is that we will fight for everybody. The money will be enough to get the necessary capital we required.”
Investors staked N2.434 billion on 190 million shares in 2,896 deals at the stock market yesterday even as the bulls reclaimed control pushing the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI) to close 0.09 per cent higher at 26, 240.45. The market had declined the previous day when investors reacted to the Central Bank of Nigeria (CBN)’s Monetary Policy Committee (MPC) decision to retain the Monetary Policy Rate (MPR) at 14 per cent. The MPC, which met on Monday and Tuesday voted unanimously to maintain status quo by retaining the: MPR at 14 per cent; Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.
Analysts had said retaining the MPR at 14 per cent would make the fixed income securities remain more attractive to investors than the equities market.
Analysts at Meristem Securities Limited, said: “Given that the MPC maintained the status quo on all policy variables, we expect the weak market mood will continue to dictate the direction of activities in the equities market. However, we advise investors to continually assess the market for opportunities to take positions in fundamentally justified stocks ahead of the full year 2016 earnings season,” analysts at Meristem Securities Limited had said.
However, the market recovered as some bargain hunters swooped on shares, making 21 equities to close higher while 16 declined. NASCON Allied Industries Plc led the price gainers with 4.9 per cent trailed by Neimeth International Pharmaceuticals Plc with 4.6 per cent. Custodian and Allied Plc appreciated by 3.3 per cent, just as Oando Plc chalked up 2.3 per cent.
Conversely, Honeywell Four Mills Plc, Livestock Feeds Plc led the price losers with 4.9 per cent apiece. A.G Leventis Plc and UACN Property Development Company Plc shed 4.6 per cent each.
Sectoral performance indicates that only the NSE Banking Index depreciated by 0.08 per cent. The NSE Oil/Gas Index appreciated by 0.49 per cent, while NSE Industrial Goods Index, NSE Insurance Index and NSE Consumer Goods Index grew by 0.41 per cent, 0.14 per cent and 0.04 per cent.
Commenting on the performance, analysts at MSL said: “We attribute the gains recorded in the market today to pockets of bargain hunting on fundamentally strong stocks. We expect the seesaw market mood to continue for the rest of the trading week.”
International ratings agency, Fitch Ratings yesterday revised the outlook on Nigeria’s long-term foreign and local currency issuer default ratings (IDRs) to negative from stable, putting it at ‘B+’.
By this, Fitch is telling international investors that the country’s debt offer is subject to speculations (uncertainty) and moving towards non-investment grade.
A credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of a country, thus there is a big impact on the country’s borrowing costs.
The last time Fitch rated Nigeria this low was shortly after unveiling of the flexible foreign exchange policy by the Central Bank of Nigeria (CBN) citing currency depreciation. According to the agency, the revision of the Outlook on Nigeria’s Long-Term IDRs reflected tight liquidity and low oil production, which have so far led to the country’s recession since 1994.
While the economy contracted through the first three quarters of 2016, Fitch now estimates a growth of -1.5 per cent in 2016 as a whole and expects a limited economic recovery in 2017, with growth of 1.5 per cent, which it said is well below the 2011-15 annual growth average of 4.8 per cent.
It added that gross general government debt increased to an estimated 17% of GDP at end-2016, from 13% at end-2015, lending a support to the rating.
Meanwhile, the CBN has said its foreign exchange utilisation records for banks showed a disbursement of $1.1 billion in November 2016.
However, of the 4,328 transactions in the period under review, five banks dominated the deals with 2,892, representing about 67 per cent of the total activity.
The banks with highest utilisation were First Bank of Nigeria, with 1,039 deals; Zenith Bank, 706; Stanbic IBTC, 397; Standard Chartered Bank of Nigeria, 389; and First City Monument Bank, 361.
Out of 25 financial institutions- commercial and merchant banks involved in the transactions, only 1,436 deals were left for the remaining 20 banks.
The apex bank yesterday asked banks to bid in a special currency auction due soon, in efforts to clear backlog of demands from businesses.
The backlogs were particularly for fuel importers, airlines, raw-materials producers, and makers of agricultural chemicals and machinery for manufacturers.
In December 2016, CBN sold about $1 billion on the forward market to tackle the backlog of dollar demands, in an effort to support production and fulfill its pledge to the real sector operators.
Research analyst at FXTM, Lukman Otunuga, noted that CBN is aware that the nation still remains exposed to both external and internal risks, particularly exchange rate, despite improved outlook, which should keep the CBN on high alert.
“It must be understood that the cause behind the incessant rise in consumer prices is the disparity between the official and black market exchange,” he said.
A Federal High Court in Lagos was informed tuesday that an Executive Director of First Bank of Nigeria Limited (FBN), Mr. Dauda Lawal, laundered funds on behalf of the former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.
The counsel representing the Economic and Financial Crimes Commission (EFCC), Mr. Rotimi Oyedepo, made the revelations while responding to a counter-affidavit submitted by Lawal.
Lawal is seeking to discharge an interim forfeiture order for the sum of N9.08 billion.
Justice Muslim Hassan had on January 6, issued an interim order of forfeiture of the said sum to the federal government, following an ex parte application by the anti-graft agency seeking similar relief.
The EFCC had initiated the ex parte application seeking an interim order for the temporary forfeiture to the federal government of the sum, which it claimed was linked to Alison-Madueke.
The court had also issued 14 days to any interested party to appear and prove the legitimacy of the monies, failing which the funds would be permanently forfeited to the federal government.
At the resumed hearing of the case yesterday, Mr. Charles Adeogun announced appearance for Lawal who was joined as the respondent in the suit.
On the other hand, Oyedepo announced his appearance for the EFCC.
He informed the court that in line with its interim orders of January 6, the EFCC had served same on Lawal.
He also informed the court that the order was also published in the Independent Newspaper of January 12, in compliance with the orders of the court.
In response, the counsel to Lawal, (Adeogun) confirmed the position, but added that he had filed a counter-affidavit deposed to by Lawal, challenging the said forfeiture order.
Arguing his application, he urged the court to issue an order, directing a refund of the sum of N9.08 billion to his client on the grounds that the amount was obtained by coercion.
He argued that before such forfeiture order can be made, two essential elements must be satisfied, namely: “That the property in question is unclaimed, and that such property or funds form proceeds of an unlawful act.”
He said: “We became aware of the forfeiture order when the interim order was served on us. My client was never confronted with these sets of facts during his incarceration at the EFCC.
“After the service of the order, I requested for the statement of my client to the commission, but same was never given to me.”
He argued that his client admitted having received the sum of $25 million in clear dispensation of his duties, but was coerced by the commission to further admit to receiving a total of $65 million.
According to him, the sum of $40 million was therefore taken as an over draft from his bank to offset the alleged extra sum.
He therefore urged the court to order the immediate refund of the sum to his client.
In his response, Oyedepo submitted that the tenure of Section 17 of the Advanced Fee Fraud and Other Related Offences Act makes a property which is reasonably suspected to be proceeds of crime, forfeitable to the federal government.
He queried: “Going by the facts and circumstances of this particular case, can it be said that the sum of N9.08 billion, which is the naira equivalent of $40 million, was not reasonably suspected to form the proceeds of a crime?”
He argued that Paragraph 4 of the applicant’s reply affidavit showed a meeting of the minds of some staff of the Nigeria National Petroleum Corporation (NNPC) as well as the respondent to launder funds.
“My Lord, Paragraph 4 of our reply affidavit shows a meeting of the minds of one Gbenga Komolafe, former Group MD (sic), Crude Oil Marketing Division, NNPC; Prince Haruna Momoh, former Group MD Petroleum Product Marketing Company; Umar Farouk Ahmed, Group MD, Nigerian Product Marketing Company, as well as Lawal, to launder funds on behalf of former petroleum minister, Diezani Alison-Madueke.”
According to Oyedepo, “It will amount to contesting the obvious for Lawal to argue that he had no knowledge of the said sums.
Oyedepo argued that it was uncommon for a law enforcement agency like the EFCC to detain a person in its custody in perpetuity without an order of the court, adding that the statement of Lawal was lawfully obtained.
“The respondent was duly cautioned before he voluntarily made his statement at the commission and his lawyer even appended his signature further attesting to the fact that the statements were obtained voluntarily.
“So having freely volunteered a statement, he cannot urge my lord not to attach full probative value to his statement.
“I submit that the appropriate order in the circumstances is for the court to order a final forfeiture of the sum of N9.08 billion already surrendered by the respondent to the federal government. I urge the court to so hold,” he said.
After listening to the submissions of both counsel, Justice Hassan fixed February 16 for judgment.
Desirous of revamping the country’s ailing power sector, the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) yesterday told commercial banks and other authorised dealers in the foreign exchange (FX) market to include electricity companies in its FX allocation policy, which provides that 60 per cent of total FX inflows from all sources (interbank inclusive) should be channelled to the manufacturing sector.
This is just as the MPC, at the end of its first meeting in 2017, resolved to retain its monetary policy instruments. The MPC kept the Monetary Policy Rate (MPR) unchanged at 14 per cent, the cash reserve requirement (CRR) at 22.5 per cent, held the liquidity ratio at 30 per cent, and retained the asymmetric corridor at +200 and -500 basis points around the MPR.
Briefing journalists in Abuja, at the end of the 111th meeting of the MPC, the CBN governor, Mr. Godwin Emefiele, urged operators in the power sector to take advantage of the priority FX allocation given to the real sector to enhance their operations.
“The 60 per cent that has been set aside for all FX that is available to all the banks to manufacturers, we did that for a purpose because we felt that there is a need to support the manufacturing sector.
“There is a need to ensure that FX is made available to those that will provide jobs and get manufacturing and industrial output to grow. And I am happy that the recent data released by the National Bureau of Statistics has started to show that the Purchasing Manager’s Index (PMI) is looking upwards.
“The 60 per cent that is set aside for the manufacturers, I dare say that those in the power sector also qualify for that because they are importing plants and equipment or components for their transformers and generators.
“However, I do not mean generators that people will put in their houses and generate electricity for themselves. So we will appeal to the banks to look in their direction increasingly,” Emefiele explained.
He also expressed satisfaction with level of accretion of external reserves, which according to him currently stands at $28.9 billion.
Furthermore, Emefiele said the central bank would continue to work to implement policies that would bridge the wide gap between the interbank and parallel market FX rates.
“It is exciting to see this happen. But is there a need to float the naira? It is important to note that we have to manage the reserves. That means from time to time we will intervene in the market to make sure the exchange rate does not go beyond our expectations and those interventions will be to moderate the rates as necessary.
“The fact that we have started to see some accretion in the reserves does not mean we have to be reckless. We will continue the policy of ensuring that FX is made available to those who are importing raw materials, plants and equipment, those supporting the agriculture sector and not those who want to engage in what I regard as less important sectors,” he stated.
Continuing, he added: “It is important that I must not gloss over some of the things I have heard and read in the press regarding multiple FX rates: I have heard about budget rate, I have heard about black market rate and parallel market rate, I have heard about pilgrims rate, I have heard about airlines rate and all that.
“It is unfortunate and it is unfair that some of those we have read discussing this issues are those who have direct access to the CBN. What we would have expected is that they would have talked to us. But I know that they know the objective that they are pursuing is best known to them.
“The budget rate is forecast rate. A forecast rate or budget rate has always been there from history and it is the rate that is used just to determine the budget and like you should know, a budget is a forecast. It is tentative.
“That is why I don’t understand why people would use the budget rate and say it determines the exchange rate in the market. The parallel and BDCs rates as far as I am concerned are one rate, and I don’t understand the duplicity about the rate.”
Earlier, while reading the MPC communique, Emefiele said the committee was of the view that the key undercurrents – that is scarcity of FX, low fiscal activity, high energy prices and the accumulation of salary arrears – could not be directly ameliorated by monetary policy actions.
He said the committee had also anticipated that the recent increase in oil prices would be complemented by production gains to provide the needed tailwinds to sustainable economic activity.
In that regard, the committee commended the commitment of the fiscal authorities to step up efforts to fill the aggregate demand gap through a speedy resolution of the domestic indebtedness of the federal government to states and local contractors.
The committee, he added, believed that doing so would aid the effort towards economic recovery.
“Total foreign exchange inflows through the CBN increased significantly by 82.45 per cent in December 2016, owing mainly to the increase in oil prices. Total outflows, however, spiked during the same period.
“The committee noted that the average naira exchange rate remained stable at the interbank segment of the foreign exchange market in the review period.
“The medium term outlook based on available data and forecast of key economic variables indicated a more resilient economy in 2017. Growth is expected to turn positive in fiscal 2017, as prior policy lags converge and the fiscal space becomes more accommodating.
“In addition, the agricultural sector is expected to play a bigger role in driving growth, given the expansion of the Anchor Borrower’s Programme, as well as other developmental initiatives of the government.
“Likewise, the prospects for moderation of price developments appear to be strengthening on the heels of positive developments in the food sub-sector.
“The committee re-assessed the headwinds which confronted the economy in 2016 and the opportunities for recovery in 2017. In particular, the MPC evaluated the implications of the rising wave of nationalistic ideologues across the West, the re-evaluation of trade agreements and the possibility of rapid monetary policy normalisation in the United States, with adverse consequences for other countries, including Nigeria.
“In recognition of the seemingly inevitable structural shift in the global economy, the committee reiterated the need to be more inward looking and hasten efforts towards economic diversification to support the domestic economy and improve life for the Nigerian people.
“Consequently, members acknowledged the imperative of sectoral policies and greater coordination of monetary and fiscal policy.
“The committee further noted that inflationary pressures would begin to subside as non-oil output recovers and the naira exchange rate stabilises. Until then, it stressed, a rate cut would worsen the inflationary conditions and undermine the current outlook for stability in the foreign exchange market.
“The committee also feels that doing so would further aggravate demand pressures while undermining existing income levels in the face of the already expansionary monetary policy and increasing inflationary pressure which will make the economy unattractive for foreign and domestic investments.
“Given these limitations, the committee was reluctant to lower the policy rate on this occasion but remained committed to doing so when the conditions permit.
“The MPC urged the management of the central bank to engage industry operators to discuss likely issues of asset quality, credit concentration and high foreign exchange exposures,” Emefiele added.
According to him, the MPC also urged relevant authorities to ensure the quick passage of the 2017 budget and to seriously consider using the public private partnerships in its infrastructure development programme.
Such a step, he said, would cushion the economy against any possible shocks in the event of a shortfall in budgeted revenue.
Responding to questions, he stated that importers of industrial raw materials, equipment and agricultural input would continue to be given priority in FX allocations.
The nation’s foreign reserves, he said, had risen to about $28.9 billion due to rising oil prices, noting that in spite of this, the CBN would continue to be prudent in managing the foreign reserves.
Analyst’s Reaction
Reacting to the outcome of the meeting of the MPC, the chief executive officer of Afrinvest West Africa Limited, Mr. Ike Chioke, yesterday said Nigeria’s present economic environment does not support a fully flexible exchange rate regime.
He also said it would lead to massive capital outflows, thereby leading to pressure on the FX market.
Chioke, who spoke in Lagos during the launch of the 2017 Outlook by his firm, said for a fully flexible exchange rate regime to be effective in the country, there was need for large scale reforms in sectors such as the oil and gas, power, mining, as well as significant improvement in the level of governance in the country.
“Actually, if you look at what the CBN has tried to do in the exchange rate environment, I believe they have tried given all the challenges they are faced with. If they were to go to a fully flexible exchange rate in the Nigerian economy today, I would probably be against that.
“You know why, it would be trying to solve the problem on the fringes. When you do that, all the capital would just fly out.
“To adopt a flexible exchange rate, you need to impose some massive reforms in some of the key sectors that would help to attract dollars. You can’t manage in one dimension. You have to remember that your problems are multi-dimensional.
“So, as you are trying to fix this one, remember that the other one might be opening up.
“So, a reform that focuses on large scale reforms is what the country needs before we can allow the exchange rate to float.
“Once upon a time, we were actually close to that. There was a time when between Soludo and Sanusi, we could have done that. We were getting to that sweet spot. The naira was even appreciating, but we lost that opportunity,” he said.
The sustained increase in the consumer price index (CPI), which is used to gauge inflation in the country has worsened misery index in Nigeria, a report by the Financial Derivatives Company Limited has stated.
Using the third quarter 2016 unemployment and underemployment rate of 13.9 per cent and 19.7 per cent (the most recent published figures), and December’s inflation of 18.55 per cent, Nigeria’s misery index is 52.15.
Due to nationwide job cuts (in the banking and oil sector especially) unemployment is estimated to have risen to 14.5 per cent in the fourth quarter of 2016. This is expected to bring the misery index of the fourth quarter, 2016, to a record high of 53.35. This would be 21.05 points higher than the fourth quarter 2014 figures.
Misery index is a measure of economic well-being for a specified economy, computed by taking the sum of the unemployment rate and the inflation rate for a given period. An increasing index means a worsening economic climate for the economy, and vice versa.
To this end, the research and investment company in its latest bi-monthly economic report for January 2017, pointed out that Nigeria’s misery index had risen for the last six quarters, stating that if the movement persists, consumers would be hit hard. In addition, it noted that consumer may be faced with deeper dwindling purchasing power, as their incomes would only be able to buy less of their usual consumption basket. Similarly, the poor will become poorer in real terms, and the middle class will thin out.
These factors are important because they pose economic and social costs to the average income earner. An increase in the misery index is triggered by an increase in either variable, and signifies economic discomfort and negative consumer sentiment.
“Additionally, climbing misery index implies declining economic activity and reduced consumption. This is because unemployed people are underutilised and rising prices will discourage rational consumers from spending. This can cause or complicate an economic slowdown or contraction. There will also be increased debt, as the federal government borrows money to increase social support schemes. In the end, the citizens will be left with high uncertainty and low morale.
“Furthermore, it is believed that consecutive rises in the misery index usually lead to a decline in the favourability ratings of the serving administration, and could result in a re-election loss for the incumbent. This was the case for U.S. President Ford and Jimmy carter, whose terms saw the misery index reach all-time highs. Likewise, Nigeria’s 2015 elections reflected this hypothesis,” the FDC report stated.
Leading the pack of high misery indexes in Africa is South Sudan, whose inflation rate of 457.20 per cent in November 2016 had sent its misery index through the roof. Other countries with high misery index include Angola (67.92), Congo (57.3), Libya (46.9), Kenya (46.3). On the other hand, some countries such as Cameroon (4.55), Ivory Coast (5.1) and Uganda (9.5), still maintain low misery indexes. At 52.15, Nigeria’s misery index is among the top in the continent.
Furthermore, the report noted that oil booms in the past engineered the significant increase in the revenues of net oil exporting countries, with dramatic changes felt in countries like Nigeria, where oil revenues per capita in the country increased from $33 in 1965 to $325 in 2000. With this oil windfall however came dramatic appreciations in the currencies of net oil exporters leading to the famous Dutch disease studies on the effects of oil bonanzas on currencies of countries especially but not exclusive to countries with under developed institutions.
“Natural resource curse hypothesis and empirical studies often characterise countries that fall prey to this state of inefficiency with deindustrialisation, bad growth prospects and currency disequilibrium. Our focus will rest mainly on the latter as forex market challenges and currency woes have contributed significantly to the astronomical hike in the price levels of net oil importers, Venezuela and Angola.
“Venezuela and Angola are oil producing countries that pull their weights in their respective continents. Venezuela currently produces 2.02 million barrels per day, 14.85 per cent higher than 1.72 million barrels per day that Angola produces. Oil revenue contributes about 45 per cent to the GDP of Angola and about 95 per cent to its total ex- ports. The same trend is observed in Venezuela where oil production and activities contribute 50 per cent and 95 per cent to its GDP and exports respectively,” it added.
The Nigerian equities market monday resumed the week on a positive note as the Nigerian Stock Exchange (NSE) All-Share Index (NSE ASI appreciated by 0.03 per cent to close at 26,231.37. The market had shed 0.39 per cent last week as highly capitalised stocks fell under the high sell pressure. However, as trading resumed yesterday, the market went up marginally to close higher. Market analysts at Meristem Securities Limited, attributed the positive trading to gains by large capitalised stocks.
“We attribute the day’s performance to the positive sentiments in the market, specifically on some large cap stocks. We expect this trend to continue into the week, as we anticipate more bargain hunting activities on counters trading below their intrinsic values,” they said.
A total of 19 stocks appreciated compared with 15 that declined in value. UACN Property Development Company (UPDC) Plc led the price gainers’ chart, advancing by 4.86 per cent to close at N3.02 per share.
UPDC is planning to raise about N5 billion from the capital market through a rights issue of 1.719 billion ordinary shares of 50 kobo each at N3.00 per share on the basis of one new share for every one share already held. The Chairman of UPDC, Mr. Larry Ettah had last year given indication for the raising of the funds to boost its operations.
Ettah had said the capital injection would be in form of rights issue, disposal of low performing assets and sell down of surplus stake in the real estate investment trust (REIT) among others.
“Our strategy for 2016 and beyond includes deleveraging the business through equity capital injection by way of rights issue, sell down of surplus stake in the REIT and disposal of low-performing assets, as well as leveraging on partnerships and alliances that are in sync with the company’s long term goals,” he said.
Cutix Plc closed as the second highest price gainer with 4.4 per cent, while Oando Plc appreciated by 3.9 per cent. Wema Bank Plc and Diamond Bank Plc garnered 3.8 per cent.
Wema Bank last week announced the appointment of Mr. Ademola Adebise as the deputy managing director of the bank in a move seen as establishing a stable succession plan.
A stockbroker, Mr. Ayo Oguntayo had hailed development, saying it will bring to the bank a stable succession plan that is capable of boosting investors’ confidence in the financial institution.”
The CEO Fidelity Bank, Nnamdi Okonkwo, was at the weekend presented with the eight awards won by the Bank’s ‘Tough Job’ campaign at the recently concluded 2016 Lagos Advertising and Ideas Festival (LAIF).
Tough Job won Silver for Radio, another Silver for Film, a Bronze for Best Use of Production Design & Art Illustration whilst the Bank’s logo unveil took home a Bronze in the Radio category.
Fidelity Bank’s (Our Word) campaign won Bronze in Radio under the Investment & Other Financials products category whilst ‘Tough Job’ picked bronze each for “Best Use of Film Editing” and Film prize, under the Bank & Investment category.
Speaking in Lagos, when the awards were presented to him at the Bank’s corporate Head Office, Mr. Nnamdi Okonkwo who dedicated the feat to the Bank’s esteemed customers said “to be recognized at LAIF validates the hard work that we have put into the development and execution of our new corporate identity”. According to Okonkwo, the new identity reinforces its overall transformation and also strengthens its focus on the youth segment and overall service excellence. He pointed out that the lender has not only raised the bar in the area of customer service delivery but also remains focused on attaining its renewed vision of becoming a vibrant and millennial brand.
Vitafoam Nigeria Plc, manufacturer of foam and an array of home product, posted an after tax profit of N412. 39m in 2016 as against N196.64m in the preceding year, representing an increase of 110 per cent year-on-year.
The firm’s total asset also grew by eight percent from N12.09bn to N13.098bn in the period under review.
A statement by the company indicated that a sum of N125m would be proposed as dividend of 12kobo per share to the company’s shareholders at the Annual General Meeting scheduled for March this year. The statement attributed the performance to the company’s board and management as well as internal efficiency.
The statement added, “No doubt the last financial year was indeed very challenging for the Nigerian Economy. The significant improvement in operating profit was majorly due to cost control measures which were preemptively taken during the year.
“In spite of the tough operating environment the company achieved a 110 per cent increase in the PAT from N196.64m in 2015 to N412.39m in 2016. The company’s total assets grew by eight per cent from N 12.09bn in 2015 to N13.09bn last year. This was supported by growth in our long-term investment and total current asset.
“The board has proposed a dividend payment of N125m representing 12 kobo per ordinary share at the next AGM.”
The company’s Group Managing Director and Chief Executive Officer, Mr. Taiwo Adeniyi, had earlier this month explained that Vitafoam would continue to operate optimally despite the high production cost and low purchasing power of customers. According to him the management had learnt how to operate within the confines of economic recession.
He explained that corporate organisations ought to be able to make realistic plan by now as some variables of production are becoming predictable.
Speaking on the dividend policy of Vitafoam, Adeniyi explained that no matter the challenges in the economy the firm would continue to place premium on the shareholder value
“Our shareholders are our pride. We have an obligation to work very hard to ensure that they consistently paid dividend. We shall pay dividend for 2016 despite recession. We have always sustained our culture of shareholder value. We shall continue to appreciate our shares’ advice on how to move the company forward,” Adeniyi said.
As crude oil producers seek to reduce oversupply and support prices, the energy ministers of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC countries yesterday stated that the two groups had made a strong start to reducing their oil output under the first such pact in more than a decade.
Eleven of OPEC’s 13 members along with 11 non-OPEC countries have agreed to make cuts for the first half of the year.
However, OPEC members – Nigeria and Libya, both suffering setbacks in production, were given exemptions.
Reuters reported that the ministers said 1.5 million of almost 1.8 million barrels per day had been taken out of the global oil market already.
“The deal is a success …All the countries are sticking to the deal …(the) results are above expectations,” Russian Energy Minister, Alexander Novak, reportedly said after yesterday’s first meeting of a committee set up to monitor the deal.
Countries involved in the deal could reduce their output by 1.7 million bpd by the end of the month, Interfax news agency quoted Novak as saying.
‘The Kingdom of Saudi Arabia has taken the initiative and other countries took part in very significant actions,” Saudi Energy Minister Khalid al-Falih told reporters following the meeting.
“Despite demand usually being lower in the first quarter in winter, the actions taken by the Kingdom and many other countries have impacted the market in a tangible way and we have seen the impact in spot prices,” al-Falih added.
Brent oil prices that fell to $27.10 a barrel a year ago have held above $50 per barrel since OPEC producers agreed on December 10, 2017 to lower output in the first half of 2017.
The cuts are aimed at reducing a global glut in oil that has weighed on oil prices for more than two years.
Falih said implementation of agreed cuts had been “fantastic” and he hoped for 100 percent compliance in February.
“We will not accept anything less than 100 percent compliance,” Kuwaiti Oil Minister, Essam Al-Marzouq, who chairs the five-member ministerial compliance committee, told a news conference.
The other members of the committee represent Algeria, Venezuela, Russia and Oman.
Venezuela has achieved more than half of its planned 95,000 bpd cut, Oil Minister Nelson Martinez told Journalists.
Full compliance could take global oil inventories back close to their five-year average by mid-2017, lowering oil in storage by around 300 million barrels, Falih said.
“[There are] no surprises so far in terms of demand or supply from other sources so there is no reason for us to suddenly come in January and say we need a bigger reduction or a longer period,” he said.
Saudi Arabia is producing slightly below 10 million bpd and has informed buyers of substantial cuts scheduled for next month, he said.
Russia has cut its oil output by around 100,000 bpd, Novak said, double what was originally planned. He said Russian oil production had averaged around 11.15 million bpd this month.
He told Journalists it was too early to talk about extending the current deal beyond the planned six months but that remained an option.
“Everyone sees that the agreements on oil production cuts have already have a positive effect on oil markets. The market has become more stable and predictable,” Novak said.
It was agreed yesterday that a technical joint committee (JTC) would be created comprising a representative for each of the five members of the monitoring committee and as well as the OPEC presidency, which is currently held by Saudi Arabia.
The JTC will cooperate with the OPEC Secretariat in compiling production data which will be presented to the ministerial monitoring committee by the 17th of every month, OPEC said in a news release.
The monitoring committee will communicate after the 17th of every month and plans two meetings ahead of the next ordinary OPEC meeting in Vienna on May 25.
