HENATES

Stock broking in Nigeria will change significantly from tomorrow, December 1, 2015 as 31 new rules and regulations take effect. These new rules and regulations are principally aimed at improving on the dealing practices of stockbrokers and how they also relate to their investing clients. The new regulations were announced in a released signed by Tinuade Awe esq, the  Exchange's Head of Regulation and general counsel. In a nutshell, from tomorrow stockbroking will be more of stock brewing with brewing in this instance meaning state of preparing. gathering or forming for a desired end. In the first place. Stockbrokers will now maintain minimum net liquidity capital of 10% of shareholders fund with commuting guidelines determined by the Nigerian Stock Exchange (NSE). Once the parameters for computation are established by the NSE the onus lies on stockbrokers to include updated positions on each regulatory report issued and shall notify the NSE within 24hrs of net liquidity cap...

From tomorrow, December 1, you can no more walk into a Nigerian stockbroker's office with only your money or cheque book to open an account through which the broker can buy stocks and shares for you. According to an official notice signed by Tinuade T Awe esq. General Counsel and Head Regulation division of the Nigerian stock exchange (NSE) stockbrokers are now duty bound to take the finger prints and other biometrics before opening accounts for clients. This is contained in the 6th out of the 31 new regulations which take effect from December 1, 2015. Before even taking the biometrics. you must identify yourself with two of the following: International passport, National ID, Drivers license, Utility bill, Voters card, employees photo ID issued by an employer with tax identification number. The two documents should verify your full names, photo. current address and signature. However, how the rule change will apply to existing investment account owners is not clear. If it m...

The Nigerian Stock Exchange (NSE) has introduced new rules and regulations that will take effect from Tuesday December 1, 2015. The change involves a total of 31 articles either amending old provisions or introducing new ones. In all of the 31 rules and regulations. 17 were brand new articles that did not exist before while about 14 were amendments to existing rules. In a nutshell, the 31 rules and regulations are intended to engender more corporate dealing responsibility on the part of dealing members of the exchange and authorised clerks who deal on the floor on in their name and on behalf of the investing public. They try to address various present day issues like money laundering; and other equally relevant rules aimed at preserving the goodwill of the market; protecting investors from unprofessional conducts and establishing quite clearly proprietary and authority of the Exchange and the apex government overseer. the Securities and Exchange Commission (SEC). The 31 new r...

NEW CEO FOR FORTIS MICROFINANCE BANK. Mr Kunle Oketikun has resigned as the managing director CEO of Micro finance Bank PLC . He has been replaced in acting capacity by Mr Ugochukwu M Ezeh until a substantive chief executive is appointed. Mr Ezeh was Executive director, Business Development before his new appointment while Mr Oketikun remains on the board of directors as a non-executive director. NEW CHAIRMAN FOR COMPUTER WAREHOUSE GROUP. A new chairman has been appointed for Computer Warehouse Group PLC to replace Chief Willie Belonwu. He is Mr Abiodun Bamidele Fawunmi a technology expert with 35 years experience. Fawunmi has post graduate degrees in engineering, computer and business administration obtained from various African and European universities plus short term training in finance, Management and development economics. He has worked with various organisations including Shell, Unilever, Price Waterhouse. Coca cola and the United Nations. Currently, he is the ...

Tantlizers PLC revalued its assets in the nine months to September and ended up saving shareholders fund from being reduced by continued, even if lower, loss. According to the figures released by the company recently, revaluation of assets resulted in a surplus of N763.8m which was more than enough to save shareholders fund from dropping. Tantalizers had reported a loss of N462.4m within the period, far lower than the N771.6m recorded in full year 2014. On its own and given accumulated revenue losses from the past, this would have depressed shareholders fund from the N1787.8m it closed 2014 year. Instead. Tantalizers shareholders fund increased to N2089.4m by September. Unfortunately, that may not be the closing figure come 2015 financial year since the company looks set to record more losses. For one, its liquidity base remains very shaky as working capital deficit widened  to N1835.3m from N1753.1m and it depended more on overdraft and less on long term loans being repaid g...

All factors but one were against UACN Property Development Company PLC within the period to September 2015. That is according to the figures released recently. From the figures, the only item that did not help depress UPDC's profitability was direct cost which closed 50.8% down at N3269.8m from N6645.8m The good news was that this was ahead of 47.7% decrease in main line revenue from N8233.4m to N4306.8m which was itself depressing. However, more pressure was applied by drops in the expenses far below revenue decrease. Selling and distribution costs declined by 39.7% to N100.5m from N166.7m while administration expenses closed at N788.9m only 18.4% down on N966.8m previously. The back breaker, of course, was the investment loss of N2555.5m reported as against nothing like that previously. Thus, in spite of 23.5% increase in income from other sources to N297.6m, additional pressure came from 7.39% widening of the net finance deficit to N1513.8m from N1409.6m hitherto and 2...

Three girls from different secondary schools across the country have emerged winners of this year's edition of the Nigerian Stock Exchange essay competition. No boys. According to the Nigerian Stock Exchange, there were 4000 entries this year and ladies won all three prizes available. The first prize winner was Miss Chiamaka Loretta Nwajiaka from Sacred Heart College, Apapa Lagos. She went home with N500,000 scholarship for university education; N250,000 for equity investment and a laptop. The closing gong ceremony was also held in her honour. The first runners up was Miss Vivian Aneke of Government Day Secondary School, Gwagwalada while the second runners up was Miss Kindness Jehu of All Saints College, Gombe. In his address at the award ceremony, the Chief Executive of the Exchange, Mr Oscar Onyema recalled that the annual competition was started in 2000 to champion financial literacy amongst secondary schools. Since then, he said, the annual essay competition " ...

Finally the Central Bank of Nigeria has announced reduction in base interest rate in Nigeria from 13% to 11%. Of course, to some people going down by 2 percentage points is not good enough but that is not the issue. Minus 2% of even one million is something not to talk of as a  discount on one billion and above loan demand. But then, to expect that with the reduction all should now be well with businesses in Nigeria will amount to living in a fools paradise.  This is because, yes it should reduce the financing cost but if this is not accompanied very quickly by fiscal measures to reinforce the gains and help propel more productive capacity it will turn to be a wasted bullet. For example, one very high component of cost in Nigeria right now is energy cost. The cost of powering production machines, the mounting and increasingly unpredictable bill for running distribution vehicles and transporting work force to and from work; and cost of keeping in touch via communication channels t...

Honeywell Flour Mills PLC looks poised to close the year to March 2016 with little honey in the well if half year figures to September are anything to go by. According to the results released recently, there has been a slow down of profitable business in the second quarter after a better first quarter to June 2015. Based on total income within the periods, Honeywell ended the first quarter with N6.84 gain on N100 income compared to N5.94 previously. By September 2015 however, this had dropped to N4.28, that is below, not above in 1st quarter, the N4.9 by September 2014. Now because Honeywell then ended that year with only N2.88 gain on each N100 the possibility of even the September 2015 figure slipping to below the march 2015 year end figure exists. More so when by September 2014, the full year's profit was 95.5% earned. The pressure on the company came from drop in turnover; income from other sources and finance income. Additional pressure was from higher increase in ...

In today's Nigeria where fine has been discovered to be a very good way of keeping companies in line, perhaps we could learn a thing or two from how the US Securities and Exchange Commission handled its latest fine on an erring operator. http://www.sec.gov/news/pressrelease/2015-266.html

It looks like the profit before tax of Beta Glass PLC for the nine months to September was overstated in error. The figures down loaded from the Nigerian Stock Exchange web site recently, included profit before tax (PBT) that was most certainly overstated because finance cost within the period was wrongly added to finance income to arrive at net finance income instead of being subtracted from it. From the figures, operating profit before this error occurred was NN1869.4m within the nine months compared to N1738m at the same time in 2014. Then it was stated that finance income was N189.9m while finance cost was N173.7m obviously, as balance sheet figures confirm, this was because an overdraft of N934.9m was taken. However, both finance income and cost were subsequently added together to produce net finance income added to the operating profit to arrive at N2233.0m PBT instead of N1885.6m if the cost component was not taken as income in error. The same thing also occurred in th...

The Securities and Exchange Commission (SEC) may deregister some 94 capital market operators soon if they can not show cause why they should not be. According to SEC the operators were either inactive or on suspension and did not submit statutory returns to SEC by the deadline of September 15 2015 given to them to do so. They include about 35 dealing stockbrokers and sub-brokers; about 33 Fund and Portfolio managers; five issuing houses ; and six venture capital managers. Others include one rating agency. Corporate investment advisers and Registrar/underwriter. We did the above grouping by focussing on sole or first stated activity SEC said they were registered to be involved in. Very many of them are involved in more than one activity but only those registered as stockbrokers, sub-brokers, fund and portfolio managers have direct relationship with the investing public that could be affected by the withdrawal of their certificate of registration. Investors are particularly goi...

It is most certainly going to be a very bright financial year for E-Yranzact PLC. That is given the picture painted by the results for nine months released recently. According to the interim figures, E Tranzact was cruising on a very smooth track to very happy ending. First, its turnover from main business increased by 20.6% within the period to N6319.7m from N5241.1m. Next, the increase in direct costs came to only 11.7% to N4556.1m from N4081.3m thus guaranteeing hefty 52 .1% lift in gross profit. In a way, 25.3% increase in operating expenses to N1036.9m from N827.6m had poised to remove some shine from this but E Tranzacr's 185.5% rise in investment income to N126.2m came to the rescue. In the end, E Tranzact's overall income increased by 22% to N6445.9m and profit before tax closed the period at N852.8m, up 126.6%. Thus, its gain on each N100 income by September stood at N13.2 compared to N7.12 at the same time in 2014. Also, with so much going for it, E Tran...

Recently, President Muhammadu Buhari told the world outside the shores of Nigeria that the country is broke. Many criticized him for choosing to so demarket the country in such manner but the truth remains that His views, for now are the most authoritative on anything Nigerian. Funny too, the facts are coming out in favour of his view. In the first place  it is no longer news that the price of crude oil is at rock bottom yet revenues from this sector provide not less than 75% of the resources available to all governments in the land. Thus, while during recent political campaigns so much and so many was promised, many governments, including the federal government, are waking to the reality that in many sectors, can't pay won't pay, is becoming the only option. This option is what made the issue of petroleum subsidy removal the macabre dance it has become since, shortsightedly, Goodluck Jonathan was asked not to remove it in 2012 through country wide protests. It is also ...

It appears the Central Bank of Nigeria has soft pedalled on its recent policy to impose heavy fines on some banks for failing to transfer government agency treasury accounts with them by the September 15 deadline earlier given. According to a circular from the Director Other Financial Institutions dated November 12 and signed by Ahmad Abdullahi all such institutions under his watch were warned to do so immediately or risk being sanctioned. The circular was addressed to chairmen, non-executive directors, top management  and external auditors of primary mortgage banks and development finance finance institutions. This is hoping that in the same vein the CBN will take it easy with deposit taking banks fined recently for not transferring the same treasury accounts  to deadline. Somehow the amount imposed as fine and within a few days after the deadline looked too punitive to be healthy for the banking industry. More importantly, placed alongside recent similarly heavy fines impos...

The Central bank of Nigeria has raised an alarm over alleged selling of application forms to those who intend to access the N220bn intervention fund it had set up for micro, small and medium scale businesses. According to  a release signed by CBN's Director of Corporate Communications, Ibrahim Mu'azu it had come to the notice of the apex bank that some persons were selling forms for the fund at between 20,000 and 60,000 Naira as "..preconditions and/or guarantee for securing loans from the fund". Also, he said, they are "asking would be borrowers to contribute into  dedicated accounts certain sums as percentage of the loan they intend to access". Ibrahim Mu'azu  informed the public that the only form from the CBN is to be filled by participating financial institutions to access the fund on behalf of interested clients and it is free. Consequently, he advised any one approached or asked to pay money for the form or pay anything in order to access ...

It looks like 2014 business trend is repeating itself for NCR Nigeria PLC this financial year. That is, a sluggish start pepped up by the third quarter to a fairly good year. How far will it take NCR this year? The answer seems to be that it will not go very far this year because it looks like the slow start this year was really slow. First. according to the figures released for the period, even the third quarter ended up dragging overall turnover growth down to 4.73% at N5323.6m because it closed with 37.2% drop to N1291.6m. Beyond this though, the quarter came up with better grips on cost of sale and administration cost while slipping slightly over distribution and selling costs. As against the 37.2% decrease in the quarter s turnover, its cost of sale had dropped faster by 39.8% to N952.6m thus paving the way for gross profit increase. However, things had been so tough in the half year to June that the 7.86% increase in cost of sale recorded for the nine months to N4715.2m...

The belts that were tightened last year to help lift May & Baker Nigeria PLC from N93.5m loss by nine months to N101.2m profit at full year, seem to be intact. Or so figures for the nine months to this September show clearly. According to the unaudited figures, the company continues to keep good lid on its costs and to boot, is doing a fair job shuffling its liquidity to pay less interest. May & Baker's overall income had risen by 8.15% to N5308.3m mainly as main line revenue grew by 8.88% to N5283.8m from N4852.9m. The reduced gross income growth was as a result of 82.9% drop in income from other sources to N8.85m and in spite of rise in investment income to N15.6m from N3.6m previously. However, income from other sources turned out to be the only weak link in the chain as cost of sale increased by 8.2% to N3531m, distribution and selling costs remained unchanged  and administration expenses rose by only 2.3% to N444.5m from N434.5m. Then decisively, Finance cost...

WEMA BANK PLC: LICENSE UPGRADE. We understand that the operating license of Wema Bank has been upgraded back to full national coverage. According to an official letter from Wema's Chief Finance Officer Mr Tunde Mabawonku to the Nigerian stock exchange, the Central Bank Of Nigeria has approved the upgrade thus returning Wema to national operations as a commercial bank. Wema bank had opted for regional license years earlier during the restructuring of the industry. With this upgrade it can now reopen branches outside its former regional territory and operate across the country as a full fledged deposits taking commercial bank. ECOBANK: NEW MD SOON. A new managing director for Ecobank Nigeria PLC will be appointed soon to replace the current MD Mr Jibril Aku. According to a notice to the Nigerian stock exchange by the Board of directors of the parent body of the bank, Ecobank Transnational. Mr Aku will move on to a new assignment next year after completing his five year te...

Financial year 2015 is most certainly going to be a year of harvest of pressures for Unilever Nigeria PLC if the trend established by September holds through the third quarter. According to the figures released for the period recently, pressure on bottom line came from drop in turnover, cost increase or less than proportionate decrease, and above all, from more than doubled finance charges amidst still weak liquidity position. Within the nine months, Unilever Nigeria recorded 2.14% decline in turnover from N43632.1m to N42699.1m. This was accompanied by 3.95% increase in cost of sale to N27835.4m from N26873.8m. Then distribution and other costs decreased by 4.2% to N12569.7m. This was positive since it was a higher drop than the turnover one but certainly not enough to turn the tide. The back breaker, of course, turned out to be 100.4% growth in finance charges recorded to N2393.4m from N1194.3m. This was cushioned a little bit by the increase in finance income from  N97.5m ...

There are two major bridges Sterling Bank PLC will have to cross if it hopes to end financial year 2015 with bright colours. That is, given the figures to September released not too long ago. These are interest expense which drained a fair 11.6% increase in interest income all of it's shine and provision for loan loss. From the figures interest expense stood at N31124.1m by September compared to N24534.2m previously. Meanwhile, interest income' s rise to N61293.8m from N54927.2m had helped gross earnings to close 12% up at N81811.6m from N73032.8m. Added to this pressure. was the 50.4% provision for loan loss increase to N5237.9m from N3482m. If not for these two obstacles, the 3.39% rise in operating expense to  N37145.5m, being much lower than the gross earnings growth would resulted in higher profit helped of course by 11.4% increase in investment and other income to N20517.8m. In the end, Sterling Bank's Profit before tax by September dropped by 2.34% to N8304...

From the results released by DN Meyer PLC for nine months and third quarter to September, the obvious deduction is that the third quarter offered some ray of hope that year end figures may not look as bad as the nine months ones look. The first indicator to this effect was the fact that DN Meyer's loss came to N72m, that is 27.2% better than the N98.9m loss by September 2014. The other indicator was that a change in fortune trend occurred in the third quarter as turnover increased by 2.04% to N279.9m for the quarter and more importantly, a very modest profit of N0.52m was recorded  compared to N40.8m for the same quarter in 2014. A closer look shows that profit emerged as cost of sale dropped by 5.67% to N156.5m in spite of the turnover increase, as operating expenses grew by only 1.62% and finance cost dropped by 59.1% to N12.4m. In other words, it was 53.8% increase in distribution costs to N10.2m that gave room for concern. Interestingly, however, it became less a head...

As Portland Paints & Products PLC ( PPP) continues to hope to plot its way back to form through new capital injection, the route to loss became open and clear by nine months to September. According to figures for the period released recently, at issue is not just turnover decrease but also   stubborn cost components that refused to drop in tow with sales decline. Within the period PPP recorded 18.8% decline in turnover to N1664.5m from N2049.8m but none of its attendant costs went down that fast. The closest drop of 16.1% was reported in cost of sales from N1104.6m to N926.8m. The least decrease was in administration expenses which dropped by only 1.16% to N376.3m from N380.7m. One concedes though that main part of administration costs do not fluctuate that easily with turnover. Distribution cost closed September at N350.9m, down 7.85% on N380.8m previously. As if to point the route out more clearly, finance costs increased by 28.5% to N90.1m from N70.1m in spite of a m...

It looks like Con Oil PLC has developed muscles hidden in its nine months to September 16.2% drop in profit before tax that only few eyes may be able to see. According to the figures released earlier this month, on the surface it is a case of a major drop in revenue veiling the fact that attendant costs decreased at faster rates. There was 42.3% decrease in main line revenue from N104233.8m to N60156.7m and due more harvests from other sources, overall income decline then came to 41.2% at N62828.6m. Now, with good control over expenses incurred to generate this lower income, not only cost of sale dropped faster but also, administration costs too. While cost of sale declined by 45.2% to N51250m from N93427.9m, administration expenses went down by 65.7% to N1653.3m from N4817.3m previously. In the end, the only real spanner in Con Oil works was delivered by hefty 85.9% increase in finance charges from N1523.2m to N2831.9m. Hence, though Con Oil was not able to increase its pr...

So far a total if 81 posts have been featured in this blog and I beg to pause a while to satisfy one major curiosity since the dawn of the blog. First, the name Henates was coined from first three letters of my  two major names with an s added to sound better. That is HENry ATEnaga with an s. Secondly, for those online who have been itching for my photograph sorry I can't oblige yet but you can access NEW TELEGRAPH, a Nigerian newspaper on line for an interview with me recently. It is featured in today's edition on pages 34&35 with my picture. Meanwhile let us keep a date tomorrow as usual and thanks a lot for your page views and even private comments

When the figures of Paints & Coatings Nigeria PLC ( PCN ) for half year and nine months are laid side by side, it becomes obvious that the company is gradually taking control in spite of the tough times. According to the figures released simultaneously recently, PCN's main headache remains cost of sale. By half year this had increased by 9.4% to N902.2m and refused to slow down during the third quarter hence growth by September jumped to 19.8%. It thus ended nine months at N1189.2m. If not, even turnover growth responded better rising from 8.88% by June to 17% by September at N1946.1m compared to N992.5m a year earlier. An additional ache was of course slow down in decrease in selling and distribution costs from the drop by 62.4% recorded by June to only 6.85% decrease to N13.6m. But at least, it was still a drop at a time sales growth improved. Naturally, what selling and distribution ended up contributing to PCN bottom line could not be compared to 12.5% increase in administr...

When the piece titled Buhari:s cash cows? was written last week, one had hoped that the sudden birth of punitive fines was not really an attempt to build a nest from which the holier than thou President could keep his political promises. That hope still stands even though yet another fine notice recipient. Guinness Nigeria. surfaced within the week alleging that NAFDAC has imposed one billion Naira fine on it for destroying its raw materials without permission. Perhaps Guinness Nigeria was being economical with the truth. Perhaps the raw materials were bad and the company destroyed evidence in the dark after being caught. Indeed, perhaps all the fine notices flying around is an attempt to show everyone doing business in Nigeria that change has come; that breaking rules and regulations or bending them with impunity is no more good business; that what looked like government of Dangote and friends by Dangote and friends for Dangote and friends in the past had not transformed into a more d...

In the face of decreasing income and increasing expenses, by September it was obvious that Transcorp Hotels could do with more strength from new or revamped streams. According to the figures for the period released not too long ago, Transcorp Hotels invested N4106.1m on subsidiaries within the period. This no doubt, was in search of new income streams that could beef up, instead of dragging down main business inflow. Sure, by September the subsidiaries had helped narrow group gross income drop to 6.0% from 6.16% for the company but that was about it. In the first place, cost of sales for the company at N2295.5m down 4.79% was nearer the income decrease than 3.26% overall drop for the group to N2462.5m. The same with administration costs which at N5230.2m for the group was 2.15% up compared to 1.19% increase for the company. Also, the company virtually accounted for solid increase in finance income by 70.1% to N275.9m for the group and the fourfold rise in income from other ...

According to the half year figures to September released recently, 7up Bottling PLC is currently on a road hard to travel successfully. From the figures, 7up is taking more short term financial support in other to reduce long term borrowings; beef up inventories; increase trade receivables and prepayments substantially and then, bill up raw cash. Quite interesting really because it replaces more costly financial support for less costly ones or even for outright interest free outflows By September, 7up' overdraft stood at N2704.7m, though down from December 2014's N4619.7m, this was more than four times September 2014's N564.6m. In a slightly different fashion, current loans closed at N14022.7m thus continuing the increase apparent since December's 2014's N11032.8m and September 2014's N7916.5m. In contrast, non current borrowing dropped by 38.2% to N4893.8m although this September figure was lower than 2014's full year N4433.5m. On the other hand...

The times are tough especially for down stream oil industry of Nigeria but no cracks in Rak Unity Petroleum fortunes only threats at least by six  months to September. The good turn however took place more in the second quarter especially in terms of cost of sale 33.9% dropped to N1138.3m from N1770.2m ahead of 32.4% decrease in revenue to N1197.5m. This allowed full six months turnover decrease to come to 41.8% to N2320.2m closely followed by 41.7% drop in cost of sale. In view of this, mid year gross profit went down by only 9.59% despite the huge drop in turnover and as second quarter gross profit rose by 23.4% to N107.5m. However, second quarter 114.9% increase in personnel cost to N6.81m almost put spanner in the works. But in that same quarter, administration cost dropped by 0.93% to N21.4m. Thus in spite of the sharp decrease in six months revenue operating profit went down by only 19.3% to N54.5m and from there, profit before tax stopped at N55.5m down 18.1% as invest...

The nine months result released by African Prudential Registrars PLC recently unmasked a veil in the company's name. This is because names best indicate or stem from main business lines. By September, this was far from true since bulk income came from net investment income which closed the period 33.5% up at N1149.3m from N861m. In contrast main line. business chipped in only N597.8m, even down 1.22% on N605.2m by September 2014. In the end, the company's total income rose by 17% to N1762m from N1505.5m even as income from other sources decreased by 62.1% to N14.9m. In the case of African Prudential's profit margin, the threat came from 42.6% increase in personnel costs to N244m from N171.1m. This was well absorbed as other expenses grew by only 2.94% to N335.6m from N326m and so, closing profit margin came to 67.8% compared to 65.9% previously by September 2014 and 61.7% for last full year. SO: * Time to reconsider name change? May be not. * However no harm...

Fidelity Bank PLC appears set by nine months to September to taste the flip side of fidelity. After all, fidelity sometimes demand you clean up your stable while none is watching or applauding. According to the figures to September released recently, the major thing against the bank is its provision for loan loss which more than doubled to N3940m from N1898m thus significantly depressing profit growth to only 2.99%. Of course, the potential was there to increase at a much faster rate since firstly, growth in other income streams pushed gross earnings growth ahead of interest income increase and equally important, as interest expense growth stopped short of that of interest income. Gross earnings had risen by 11% to N106570m from N96023m as net income from trading instruments broke out of its 2014 loss yolk to chip in N497m profit; as other operating income rose by 23.5% to NN7733m and even net commission managed 1.11% increase to N13650m. All in addition to 10.2% rise in interest...

Apparently, UAC of Nigeria can kiss double digit goodbye this financial year as macro economic cookies continue to crumble. Or so indicates nine months figures to September released recently. One thing is sure though, UACN is still trying to stay in control. For example, growth in distribution and other expenses slowed to 15.6% in the third quarter compared to over all 28.6% to N3054m recorded for the full nine months. Also in the third quarter there were heartwarming increases in income from other sources ( from N3.04m to N414.1m) and share of profit from holding investments from N0.39m to N226.5m when compared to levels at the same time in 2014. However, none of these could stop nine months profit margin from sliding to 5.02% as the third quarter closed with 4.0%. At this point it was apparent that the 10.8% profit margin clocked by 2014 year end will be beyond reach this time around because by September then, the closing margin was 8.45%. The spoiler was less the 9.35% drop ...

Many companies do not really begin to feel the full impact of losses until what is reported amounts to cash loss and not just one due to book entries that do not involve cash outflow. For Ellah Lakes PLC the time for cash loss arrived in the year to July 31, 2015, according to figures released for the period recently. From these audited figures, it was clear that Ellah Lakes, the fish farmer, recorded N34.7m loss. This was not only 149.6% increase on the N13.9m loss reported in 2014 year, it actually was almost double the N19.9m provision made for asset depreciation. In 2014 year, the reverse was the case as depreciation came to N22.6m, well ahead of the full year loss recorded thus implying that no cash loss was involved. That of course, is life threatening because not only that there is increasing prospect of continued diminishing of N710.8m reserves built up years ago, the company's appetite for cash may also increase. In the case of 2015 year, trouble surfaced not onl...

Sometimes, it is not wrong to pity any leader of Nigeria at any point in time. This is because any attempt to really fix any problem has a way of coming up with or against Nigeria, the Pandora's box with unexpected and mostly negative contents. Take President Muhammadu Buhari's self appointed mission to clean up Nigeria after his first but short lived attempt way back as military dictator. Forgetting conveniently that he himself has the unexplained 53 suitcases hanging over his saintly body language, what has emerged so far is that there is hardly any one in Nigeria who can be depended on to be foot soldier for the war against corruption. Even teenagers have since been coopted to find a place in the quicksand called corruption, not talk of wives and friends who import their brand from meetings they attend while asleep. Now the president is talking about dealing with those who engaged or engage in election rigging. Unfortunately this too includes those who fund presidentia...

From the figures wisely released by Ecobank recently in dollars and Naira for nine months to September, it was quite obvious that this year, fortunes may be polished some how by the weak Nigerian Naira. For example while the dollar figures point to 2.63% drop to $2083.6m from $2139.9m, the Naira equivalent was reflecting 18.1% increase to N411832.3m from N348728m This was driven mainly by 1.89% increase in dollar interest income to $1298.8m from $1274.8m which translated into 23.6% increase in naira terms to N256722.7m from N207745m. Of course the polish comes from the devaluation of the Naira this year. However, in spite of this, it is still clear that Ecobank did not have serious issues with cost pressure within the period, not even with interest expenses despite the increase in interest income it generated. In dollars terms interest expense dropped by 0.6% to $461m from $463.8m while the naira equivalent increased by 20.5% to N91122.1m. Hence net interest income grew by 3....

It looks like a major headache in the current financial year for Flour Mills Nigeria PLC is how not to end the year sweating for financiers alone. Oh sure, according to half year figures to September released recently, profit before tax of N24019.3m was already made by the half year and that should help put smiles on the faces of shareholders come year end March 2016. But, really the truth is that the bulk (233732.5m) came from gain from sale of investment assets in associates thus masking the little drop of profit from operations within the period. It was in the second quarter of the year this gain was recorded thus helping Flour Mills to absorb 21.1% increase in finance costs for the half year (up by 32% in the second quarter as a matter of fact). This apparently resulted from 15.3% rise in term loans from N55260.6m to N63736.6m in spite of 48.4% drop in cash to N16069.4m; 27.6% reduction in other receivables to N4007.2m and 18.7% decrease in trade receivables to N7996.1m fro...

FORTE OIL: Mr ANIL DUA , Director. Mr Anil Dual has been appointed a non executive director of Forte Oil PLC with effect from October 30, 2015. He replaces Mrs Korede Omojola whose resignation from the board of directors was accepted on the same date. Mr Dua holds BA honours in economics from St Stephens College Delhi University , India and a masters also in economics from Delhi School of Economics. His working career started in 1974 and spanned broad based experience in India, United Kingdom, USA and Botswana. He also was director of standard chartered bank in Ghana, Nigeria, Cameroon, Cote d'voire ; Seychelles International mercantile corporation and Afriexim bank. According to a release from Forte Oil, Mr  Dua resigned from all these board positions except Afriexim on September 30, this year. TOTAL NIGERIA GETS NEW DIRECTOR. Total Nigeria has announced the appointment of Ms Christie Hein as a director of the company. Ms Hein brings to bear more than 12 years wo...

It appears financial year 2015 will end with Avon Crown Caps PLC taking a plunge into the loss league. It had landed there by September and may be set to stay there to December. According to the figures for the period released recently, the back breaker has nothing to do with main line business but more with 68.7% leap in finance charges from N174.2m to N294.7m. Of course, 16.9% increase in distribution costs to N293.6m chipped in pressure inside. The truth was that with 11.2% growth in main line inflow from N3483.9m to N3873.3m accompanied by only 8.04% rise in cost of goods sold to N3292.2m and 133.3% increase in income from other sources to N1.05m, the pressure from distribution was a piece of cake. Not so for jump in finance charges. Hence, Avon Crown Caps ended September with N6.19m loss compared to N11.6m profit before tax by the same time in 2014 year. IN SUM: * Something has to be done to reduce the growth in finance charges consequent on the 129.7% rise in current ...

There is no doubt at all that even from the latest figures for nine months to September, Okomu Oil Palm PLC has great prospects but the issue is: Does it presently have enough money? The answer is no, according to the latest results. Yes, Okomu Oil ended the period with N1238m as cash in hand as against red balance of N1527.8m by September  2014. However, this was principally because recourse to more long term borrowing more than doubled the closing balance here to N4060.2m from N1877.3m. Because of this, finance cost also more that doubled to N348.8m from N144.7m. Meanwhile working capital still dropped 46.7% to N1162.5m from N2077.9m. Had this long term fund been from cost free new money from shareholders, Okomu oil Palm would today be doing battle with only increasing overheads and come out of it as the all round winner. Sure, in spite of the near doubling ( up 99.2%) of the administration bill, to N3671m, Okomu Oil Palm reported 23.% increase in profit to N2555.6m from N207...

No doubt the grip of the tough times on Capital Oil PLC is more than an elbow grip that can be disposed of just by straightening the elbow. That is, according to the figures for the nine months to September. From the result, Capital Oil is feeling the pinch from all angles except more controllable administration costs ( down 7.7% to N355m from N384.6m). In the first place, main stream turnover eased by 0.12% to N3436.2m from N3440.5m; zero income was reported from financing activities compared to N11.7m previously and income from other sources collapsed by 45.8% to N13.7m from N25.3m. Then cost pressure compounded the shoe pinch. Cost of sales rose by 23.8% to N2658.7m from N2123.1m in spite of the income drop; sales and marketing expenses also jumped by 84.2% to close at N256.4m. Thus, Capital Oil ended the nine months with N179.8m profit before tax, down 78% on the N818.8m recorded at the same time in 2014. No wonder, from a gain of rather comfortable N24 on each N100 sale ...

Obviously, but for united effort put together by streams of income other than from main stream banking, the nine months to September would have ended with great slide by Unity Bank PLC. According to the figures released recently, interest income decreased by 9.32% to N35158m from N38140m while to make this much more unpalatable, interest expense increased by 9.40% to N14304.7m from N13075.9m. The stage was thus set for huge drop in profitability especially as overheads other than personnel cost increased by 27% to N10575.6m from N8323.4m. However, drop in profit before tax came to only 13.9% to N10349.8m as strong earnings from other streams combined to cushion the net interest depression. Forex income closed at N1072.6m compared to N43.6m previously; net trading income more than doubled to N1203.6m from N389.9m; income from other sources ended September 89.5% up at N4592.6m from N2423.8m and fees and commission chipped in widows growth of 10.2% from N6511.8m to N7173.6m. In ...

For Nascon Allied Industries PLC the nine months to September was dominated by controllable costs that could not be controlled. At least given the times in today's Nigeria, growing total income by 24.6% to N10306.9m from N 8270.6m back in September 2014, deserved some broad smiles especially as revenue from main line actually increased by 24.8% to N10192.3m and income from other sources jumped by 67.2% to N114.2m. Indeed, as far as income was concerned the drag came from the decrease in investment income to N0.42m as against N29.6m previously. Unfortunately, while closing with such income growth, it recorded a higher 33.4% increase in cost of producing goods sold to N6954.4m from N5213.5m plus 43.8% increase in even more controllable administration costs to N884.7m from N616.3m. Surprisingly, Nascon recorded 14% drop in finance costs to N11.1m and 9.99% decree in also less controllable distribution expenses from N85.1m to N76.6m. All said and done, Nascon Industries ended...

In the nine months to September, Academy Press PLC reaped good benefits from cost control. According to the results for the period released recently, all that Academy Press achieved headed downwards. The good news was that major costs dropped faster than income and so, it ended the period with very but gratifying N7.13m profit compared to N32.7m loss by September 2014. The salvo of drops started with 5.64% decrease in total income to N1069.9m as revenue from main line decreased by 5.32% to N1057.5m and income from other sources also went down by 26.6% to N12.4m from N16.9m. In addition the situation was looking hopeless as cost incurred to generate this lower income increased by 4.65% to N641.6m from N672.9m and finance cost rose by 20.5% to N109.4m. Not to worry, good cost control brought down administration expense by 22.8% to N289.7m from N375.3m and reduced distribution overhead by 18.2% to N22.1m  from N27.4m. Hence at the end of the nine months, Academy Press not o...

It looks like the nine months to September released recently by Stanbic IBTC was a red alert for financial year 2015. In the first place, the group recorded record growth in credit loss provision of 521.3% to N12489m from N2010m at a time when loans and advances to customers dropped by 1.64% to N392054m. In other words, in view if the times, is the group's loan portfolio being increasingly infested by toxic or  doubtful loans? Secondly, Stanbic IBTC increased its gross earnings by 10.3 % even as Net interest income went down by 5.14%. A feat it seems since interest income is the main stream. Not that a feat though, because all round there was good growth in gross income, it is the net figure that failed to impress because the growth in cost of earning interest and cornering fees and commission grew wings of their own. Interest expense rose by 69.1% to N29747m compared to otherwise impressive 19.8% rise in interest income to N62676m. The same way, fees and commission exp...

Presco PLC is headed for a memorable finish to the 2015 financial year with all angles of vision showcasing good news by nine months to September 2015. According to the brief released recently, revenue is growing well, cost increases are being absorbed and fund joggling is paying off. Within the period, Presco grew its turnover by 16.2% to N8044.4m even though 22% drop in income from other sources reduced increase in overall income growth to 15.4% at N8168.2m compared to N7080.1m previously. The real beauty was the fact that this turnover growth was generated with direct cost that decreased by 16.6% to N3335.4m from N3997.1m. This delivered 61% rise in gross profit to 4709m with which to absorb other pressures. The major ones were from finance expenses which jumped by 73% to N581.5m and 20.3% increase in selling and administration costs to N1657.9m from N1378.1m. In the end Presco not only achieved 61.8% decrease in its working capital deficit to only N420.7m from N1100.9m bu...

Total Nigeria is apparently doing battle with its liquidity right now , of its results for nine months to September are anything to go by. On the surface the aggregate is still tough looking because Total Nigeria's working capital deficit widened by 25.2% to N10356.9m from N8270.4m. Under this surface, Total Nigeria reduced borrowings by 6.05% to N14734.5m; in addition to 27.2% drop in trade payables and increased inventories to N20082.5m. All these involved cash outflow. From the figures, these were possible as cash decreased by 49.1% to N7370.3m from N14468.4m by December 2014; trade receivables dropped 37.4% to N22133.2m from N35379.7m. Meanwhile Total Nigeria's cost control paid off as 10.4 % drop in turnover by September to N159299.3m from N177807m failed to depress profit before tax beyond 4.64% from N4204.5m to N4009.6m. Hence, there was a slight shift in the company's profit margin to 2.52% from 2.36% reported by September 2014. NOTE: * The decrease in...

If income flow trend in 2014 holds true this financial year, then Wema Bank by nine months to September, was set for a major drop in profit this year. By September 2014 Wema Bank had recorded  N2506.7m as profit before tax and represented 81% of total profit for that year. Now, from the figures released recently, N1528.5 profit was in the bag by September, down 39% on the 2014 level. This was in spite of 38.9% increase in net trading income to N1527.3m; 9,47% rise in net fees and commission to N3774m and 51.9% decrease in loan loss provision to N229m. The pressure on the bank's bottom line was from very marginal growth in interest income ( 1.71% to N26580.6m) as interest expense ended 5.59% up at N13315.9m; income from other sources dropped by 21.7% to N683.8m and as personnel cost  dropped by only 0.29% to N7491.9m while other operating expense rose by 7.86% to N8354.4m. THUS: * With most of Wema Bank income in 2014 already in by September that year, the margin could e...

When the going gets tough, goes the popular saying, the tough gets tough. That is, roll up their sleeves. For BOC Gases PLC, the quarter to September turned out to be wake up call for rolled sleeves. From the figures to September released recently, BOC Gases found itself with three months loss to September due to rising raw materials cost, Naira devaluation; tough operating environment and low demand. Thus, turnover for the three months dropped to N502.8m from N573.8m while cost of producing the goods sold increased to N297.9m from N285.2m and  administration costs came to N133.9m from N120.7m. It was only selling and distribution cost that went down to N82.6m from N117.8m. In the end, BOC Gases ended the three months with N14m loss as against N50.1m profit same time in 2014. However, this only took lots of shine from performance for nine months to September. Profit before tax managed to then close September at N35.8m, down 81.8% on previous 196.6m. All because within nine ...

Gradually, the burden of borrowed funds was becoming quite heavy for Dangote Sugar PLC but for now, it is bearing it fairly well. According to the figures to September released last week, Dangote Sugar's financial charges increased by 190.8% within the period to N890.9m from N306.4m at the same time in 2014, This was apparently because by September, its borrowed funds closed at N3307.7m, up considerably on the less weighty N125m previously. In spite of this, Dangote Sugar's working capital eased by 18.1% although cash rose marginally to N5050.6m from N4459.6m. However, the bulk of the borrowed money went into fixed assets ( up 10.1% to N51358.8m ) acquisition of investment property  and the 131.1% growth in biological assets to NN1546.7m from N669m. Besides, in spite of the burden, Dangote Sugar reported 4.95% increase in profit to N14244.1m even as turnover decreased marginally and income from other sources dropped by 57.7%. This was because most costs went down at...

Stakeholders of Cement Company of Northern Nigeria PLC can afford to still smile despite turnover drop. According to the figures for nine months to September released last week, CCNN's turnover dropped by 6.3 % to N11501.8m from N12275.5m. Happily, a 74.3% increase in income from other sources to N78.6m had reduced the drop rate to 6.01% but that was not the main sources of smiles for stakeholders. That is a product fairly good management of cost pressure that led to higher 10.5% decrease in cost of producing the goods sold ( from N7812.5m to N6993.7m) and also higher drop in Overheads by 8.68% to N2044m. However, there was a major dampener in 43.3% increase in financial charges to N119.8m from N83.6m. More so when 126.5% rise in long term liabilities to N1450m ended up  being gobbled by 50.9% increase in trade receivables to N2155.1m, about 26.5% rise in inventories to N6426.5m and 59.1% jump in cash on hand to N1425.5m. On its own the 40.5% decrease in current financi...