Investment banking and financial services group, United Capital Plc., has announced its 2016 Q1 profit before tax of N1.42bn, up from N0.89bn in Q1 2015. This represents a 59 per cent increase.
Its gross earnings stood at N1.85bn, up from N1.30bn in Q1 2015, representing a 42 per cent increase from the previous year.
The firm's profit after tax also grew by 61 per cent in Q1 2016, closing at N1.13bn, up from N0.71bn in 2015.
The company also held its Annual General Meeting in Lagos and declared a 35 kobo dividend to shareholders.
The group said despite the extended economic challenges in the market in 2015, it exhibited sustained growth throughout last year (reported 2015 full year earnings of N6.15bn, up from N4.68bn in 2014) and in to 2016.
Commenting on the results, the group's Chief Executive Officer, Oluwatoyin Sanni, said, "We entered the new year with a full understanding of what was ahead of us. Therefore, we prepared for and anticipated the roadblocks and adjusted accordingly.
"We adopted a group-wide operational approach of 'effectiveness and efficiency' in delivering superior services to our clients in order to achieve our goals. We believe this will help us maintain sustained growth through the remaining quarters of the year."
The company said its Q1 performance confirmed that it remained well positioned to play a strategic role in helping its clients achieve their financial and investment goals.
The performance in a period characterised by adverse macro-economic factors, it noted, was driven by the group's growing market share, efficient execution of key mandates and effective cost management driven by improvements in operations and Information Technology capabilities, thereby optimising value, while retaining a significant proportion of earnings.
The performance of the Nigerian equities market broadly improved last week despite the overall bleak short term outlook as bargain hunting and corporate releases drove market performance.
The market capitalisation appreciated by N45 billion to close at N8.548 trillion when compared with the N8.503 trillion posted the previous week.
Equally, the All-Share Index increased by 130.84 points or 0.54 per cent to close at 24,850.11 as against the 24,719.27 achieved the previous week.
During the week, both Banking and Consumer Goods first quarter results for the period ended March 31, 2016, except for Guinness that came in beat consensus, suggested better-than-expected start to 2016. Reviewing the results showed that Forte Oil’s profit after tax went up 21.85 per cent, Champion Breweries profit after tax (PAT) rose by 520.74 per cent and NEM Insurance’ profit up by 63.98 per cent. Others are UBA, UBN, Transcohot profits which rose by 18 per cent, 96.30 per cent and 35.20 per cent, respectively.
Meanwhile, some companies which results came in during the week showed a decline in their profit. Paintcom shed 50.76 per cent in PAT while CAP, Dangote Sugar and Guinness declined by 13.21 per cent, 71.06 per cent and 84.43 per cent respectively.
Market breadth was positive with 35 gainers versus 32 losers, compared to 26 gainers against 41 losers the previous week. Volume traded eased by 89.01 per cent to 885.37 million shares, worth N5.83 billion and traded in 13,798 deals, compared to the 8.05 billion shares valued at N13.33 billion that exchanged hands in 15,212 deals the previous week.
Speaking on the outlook for the market this week, analysts at Cordros Capital Limited said, “We expect market activities to be driven by the release of additional Q1-2016 earnings results in the coming week. Broadly better-than-expected earnings should be a plus for investors, and vice versa” while analysts at Afrinvest Limited added that “the positive performance and rebound in market sentiment last week was driven by better-than-expected corporate scorecards for the first quarter 2016 period. Sentiment is likely to switch to profit-taking mode in the week ahead as investors continue to speculate on weak macro fundamentals, but further declaration of impressive earnings results may counteract this.”
Dangote Sugar Refinery Plc. has recorded a group turnover of N101bn in 2015, a seven per cent increase over the turnover of N95bn in 2014.
Its profit before tax stood at N16bn and profit after tax at N15bn, while earnings before interest, tax, depreciation and amortisation rose to N21bn compared to N18bn in the previous year.
The Chairman of the group, Alhaji Aliko Dangote, at the 10th Annual General Meeting of the company in Lagos, said the company remained committed to delivering superior returns to its shareholders.
This commitment, he said, informed the recommendation of N6bn dividend for the year ended December 31, 2015.
He said 2015 was a very challenging year as the political transition and economic slowdown impacted consumer spending and the global oversupply of crude oil weakened the naira, leaving an average Nigerian consumer with less purchasing power than in the past three to four years.
The N6bn recommended by the Board of Director represented 48 per cent of the profit after tax.
“This translates to a dividend of 50 kobo per share for every ordinary share each held in the company. The board will continue on this prudent course of action in view of our investment requirement for the backward integration project and building of a sustainable financial future for the company,” Dangote said.
The shareholders commended the company and approved the dividend.
The naira is expected not to rise or fall significantly at the parallel and official foreign exchange market as the economy slows and demand for foreign exchange eases after President Muhammadu Buhari’s delayed signing of the 2016 budget.
The local currency was trading around 322 against the dollar at the parallel market on Friday, the same level as last week, and held steady around the official peg of 197.
“Some important decisions on investment and economic issues are being held back because of the continued delay in the implementation of the fiscal policy for this year,” a forex dealer told Reuters.
Zambia’s kwacha is expected to come under pressure next week after a credit ratings downgrade, while several other African currencies are likely to hold steady.
The kwacha is expected to remain under pressure against the dollar next week due to increasing demand for the US currency and following Zambia’s rating downgrade by Moody’s.
Kenya’s shilling is likely to face some pressure next week from the usual demand for dollars from companies seeking to meet end-of-month payments.
The Ghana’s cedi is expected to remain flat in the week, with traders citing adequate dollar supply to meet corporate demand.
The Tanzanian shilling is expected to hold steady with any demand from importers for dollars met by companies seeking shillings to make regular tax payments.
The Ugandan shilling is expected to strengthen next week, helped by inflows of foreign exchange and weak economic activity that is limiting corporate demand for dollars.
Ensure Insurance Plc, a composite insurance company in Nigeria, said it paid out the sum of N390.86m as claims to customers in the first quarter of 2016.
A statement from the firm on Sunday said the breakdown of the figure showed that the company paid out N170.2m on life insurance claims and a total of N220.64m on general business claims.
It stated that the Group Life claims topped the chart with a pay out of N84.44m while the individual life closed the quarter on N8090m.
In the general business category, the firm said engineering claims led with N64.61m pay out, followed by general accident and fire claims with a total of N42.10m and N39.28m, respectively.
Ensure also recorded significant figures in motor insurance claims, amounting to N38.46m; oil and gas, N21.63m; and aviation, N4.25m, among others.
“The significant increase in the figures for the first quarter of 2016 when compared to the N290m recorded in the first quarter of 2015 is largely due to an increased subscription to the company’s insurance solutions and prompt claims processing, resulting from the thorough review of the company’s product and internal processes,” the statement said.
The company reiterated its commitment to prompt claims settlement, adding that this remained the only way to gain the confidence of the insuring public while assuring all stakeholders that its financial strength, impeccable internal process and partnership with highly rated reinsurance companies both locally and internationally would guarantee customers’ satisfaction.
It stated that Ensure Insurance had also introduced a claims toll free line and a friendly website with claims reporting functionality for customers to report claims quickly, without hassle and still get paid.
“The company also has a strong customer service platform, supported by well trained personnel with a thorough understanding of insurance to promptly and satisfactorily resolve all inquiries and complaints,” the statement said.
Determined to checkmate activities of unregistered insurance brokers in the insurance industry, the National Insurance Commission (NAICOM) has released the list of 300 insurance brokers it has given approval to undertake brokerage business in the industry.
The names of the approved insurance brokers are published on the website of the commission. The commission in December 2015, had published the names of 108 insurance brokers for their failure to meet the regulatory requirements especially failure to renew their licenses.
Industry operators said that majority of the erring firms were sanctioned for violating certain provisions of the insurance Act 2003, such as late submission of their returns to the regulatory body, while some did not even submit returns for several years, non-renewal of operating licence, among other infractions.
When their names were made public, the commission said the affected insurance brokers would not be allowed to renew their operating licences, while those who are still interested to continue operating in the insurance industry would be required to apply for a fresh licence.
The commission through a circular, said an insurance broker whose licence has lapsed and wishes to re-register under the same name should submit a letter of appeal giving reasons why the last licence lapsed and payment of non-refundable fee of N250,000 for processing of the appeal. Moreover, it required the intending broker to equally submit application for re-registration, if appeal is sustained by the commission, adding that such interested broker must make payment of N250,000 application fee, submit Certified True Copy of CAC’s Form CO2 and CO7, evidence of payments of the fee and payment of all outstanding levies due before the licence lapsed.
Other requirements listed in the circular include: Nomination of qualified CEO and Executive Management for regulatory approval; submission of a management account/statement of account as at the last day of last month of the period since the last approved account and apply for NAICOM’s approval of the members of the board of directors.
The commission stated that there would be re-registration inspection of the brokerage firm to determine non-violation of the Insurance Act and payment of penalties for identified violation/non-compliance, while the interested brokers must attend and be successful at the re-registration interview. Besides, interested brokers are required to submit Professional Indemnity Cover Sworn Declaration, Tax Clearance for the expired period of licence, certificate on Oath from the external auditors and payment of licence fee of N2.250 million, after which the licence would be issued to those that fulfil all the listed requirements.
The Accountant-General of the Federation, Alhaji Ahmed Idris, has said that the over N2.7tn in the Treasury Single Account will not be shared by the three tiers of government.
Idris said in a statement issued in Abuja on Thursday that the funds belonged to agencies of the government for their operations and not for sharing as was being insinuated in some quarters.
The statement read in part, "The Accountant-General of the Federation has put the amount so far collected in the Treasury Single Account platform to be slightly above N2.7tn.
He further stated that the money belonged to the Federal Government's Ministries, Department and Agencies, and meant for their operations and not for sharing or for any other purposes as being reported in some media.
"Idris said that the TSA had helped the government to have a firm and full control of its resources, blocking leakages, helping it to reduce the cost of borrowing and to monitor spending in the Ministries, Departments and Agencies of government."
The AGF called on all organisations that had issues with the operations of the TSA to come forward with their problems, and assured them that his office was committed to resolving whatever challenges they might have in line with best practices.
On delay in paying workers' salaries, Idris gave an assurance that the Federal Government was working out modalities to ensure that the Federal Government workers were paid early, in line with the directive of President Muhammadu Buhari.
"There is a standing instruction from Mr. President for workers to be paid on or before 24th or 25th of every month," he said.
While stating that the compliance might be hampered by the limited resources available to the government, which could only be determined after the monthly Federation Account Allocation Committee meeting, he said the government had taken steps to make a provision that would accommodate salary payment even before the FAAC meeting.
MTN Group Limited's subscriber numbers fell during the first quarter as disconnections ordered by the government in Nigeria, its biggest market, curbed the growth of Africa's largest wireless operator.
MTN's customer base decreased by 1.4 per cent to about 229 million across 22 countries in the three months through March, compared with the previous quarter, the Johannesburg-based company said in a statement on Thursday. The company cut its guidance for the full year to 11.95 million net additions from 12.5 million.
"In order to mitigate any future regulatory challenges, the group took an exceptionally conservative stance by disconnecting all subscribers who could possibly be deemed to be non-compliant," Bloomberg quoted its Executive Chairman, Phuthuma Nhleko to have said in the statement.
"This has had a significant unfavourable impact on total subscriber growth and revenue" in the first quarter.
MTN was fined a record $5.2 billion in Nigeria last year for missing a deadline to disconnect subscribers, whom the government had deemed unregistered amid a crackdown on security. The company is still in negotiations about settling the penalty, which was later reduced to $3.9 billion. Nhleko returned to the company he used to run in November to handle the dispute after Chief Executive Officer Sifiso Dabengwa resigned.
The shares declined as much as 2.7 per cent before reversing to trade 2.2 percent higher at 151.11 rand by 9:29 a.m. in Johannesburg, valuing the company at 277 billion rand ($19 billion). The stock has lost about 21 percent of its value since the Nigeria penalty was announced in October,
"We expected a drop in subscribers in Nigeria during the first quarter, even though the drop was bigger than expected," Arqaam Capital analyst Tibor Bokor said by phone from Dubai. "We expect that numbers in Nigeria will improve during the second quarter, as the political landscape has changed in the country."
MTN Nigeria subscribers decreased by 6.9 percent after 4.5 million customers were disconnected in February. In South Africa, the company's second-largest market, customer numbers fell by 1.7 percent.
Shareholders of Dangote Cement Plc, yesterday, commended the company for increasing the dividend by 33.3 per cent from N6.0 dividend payout in 2014 to N8.0 in 2015.
The shareholders, who spoke during the company's seventh yearly general meeting in Lagos yesterday, lauded the company on its backward integration in the cement sector of the construction industry, especially the commencement of the construction of a $1billion cement plant in Okpella, Edo state.
Specifically, the National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie commended the management of Dangote on a 33 per cent appreciation in shareholders dividend from N6 in 2014 to N8 for the financial year ended 31st December 2015.
He pointed out that the dividend payout is the highest so far in the industry, urging him to continue to enhance its local capacity in the country,
Another shareholder, Mrs Bisi Bakare lauded the company for creating direct jobs through its various projects in the country and impacting positively on the host communities, its people and the state.
"I want to use this opportunity to thank our chairman and the board for their generosity towards the nation's development. As a giant of Africa, the financial support given to our subsidiaries by the company will go a long way in developing other countries we have interest.
"This is a total eradication of poverty and creation of more job opportunities all over. Our performance during the year is a successive growth and transformative, as our capacity increased by 24 per cent to 43.6 metric tonnes per annum (mtpa). Similarly, our sales volume also increased by 35 percent to 18.9 mtpa from 14.0 mtpa.
"From seven sites in 2014, we have grown to 11 sites, and we are projecting a growth of 24 sites by year 2020. In Employment, we have currently employed 14,289 people with a projected growth to 29,000 by year 2020.
"If we have five of you in the nation it will go along way in the total transformation of the continent. We commend you, may you live long to enjoy the fruit of your labour." She added.
The Chairman of the company, Alhaji Aliko Dangote assured the shareholders that the company would continue to deploy strategies that would increase profitability in spite of the prevailing harsh operating climate.
He pointed out that with the measures put in place, the foreign exchange volatility would not affect the operations of the company significantly more so when its other African plants are operating maximally and yielding positive results to cushion the effect of the scarce foreign exchange at home.
Dangote added that the company produces 44 million mtpa in eight countries with 14, 289 staff, and N491.7 billion in sales. "We have invested billions of dollar in building new capacity across Africa, creating thousands of jobs in factories, logistics, sales and support. We have single handily helped Nigeria become self-sufficient in cement.
"We have good strategy in place, the volatility of the foreign exchange will not affect our operations. I am not an advocate of devaluation of our currency, even if that had happened, it would not have affected your company "Looking back at 2015, we have shown that that our core Nigerian businesses is adaptable and robust in the face of serious external challenges. We have proved that we can enter new territories successfully and quickly achieve excellent market share. "We reduced the level of business risk we faced and reduce our overall net debt, while at the same time increasing our revenue and profitability. I think few of this great continent's major companies can claim to have matched these achievements.
"I hope our success in 2015 has rewarded the confidence you have placed in us over the past few years and trust you will continue to share our successes as we continue our expansion to become a global force in cement," he added.
The company declared a profit after tax of N181.3 billion for the financial year ended Dec. 31, 2015, against the N151.5 billion posted in 2014. The profit represented a growth of 13.67 per cent when compared with figure for 2014.
The company's profit before tax stood at N188.3 billion compared with N184.7 billion achieved in the corresponding period of 2014.Further breakdown of the result indicated that the company declared a revenue of N491.7 billion compared with N391.6 recorded in 2014, an increase of 26 per cent.
The board of directors recommended a dividend of N8 per share against N6 paid in 2014, a growth of 33 per cent. The company in 2015 announced plans to increase its capacity by 25 million metric tonnes across African countries including Ethiopia, Kenya and Zambia, as well as a new plant in Nepal.
Unilever Nigeria Plc grew its sales by 12.5 per cent in the first quarter of this year to N16.78 billion.
Unaudited report and accounts for the first quarter ended March 31, this year showed that the company grew by 12.5 per cent from N14.9 billion in first quarter of last year to N16.78 billion in first quarter of this year. Cost of sales increased by 9.1 per cent to N10.7 billion for the period ended March 2016 from N9.8 billion recorded in the corresponding period in 2015. Net finance cost reduced by 35 per cent to N488 million for the three months ended March 31, 2016 compared to N757 million reported for the corresponding period in 2015.
The report showed that net finance cost as a function of operating profit improved significantly to 26 per cent as against 47 per cent in first quarter 2015, reflecting sustained improvements in cash management. Profit after tax for the period increased significantly by 76 per cent from N590 million in first quarter 2015 to N1.04 billion in first quarter 2016.
Unilever Nigeria assured stakeholders of continued focus on key business drivers to ensure sustained growth in the company’s operations to improve returns on investments.
“Although the challenges in the operating environment are yet to ease, we have continued to see momentum behind recent initiatives taken by Management. We will continue to focus on driving cost efficiencies, growing market share across key categories and reinvesting behind our brands,” the company stated.
The management of the company said they were addressing the issue of finance costs through a number of initiatives and efforts are on-going to sustain the improvements coming through in first quarter.
Unilever Nigeria noted that the consistency in performance over the last two quarters demonstrates strong resilience and resolution to win despite the various economic challenges in the operating environment.
