QUARTER RESULTS (9): Wema Bank, MRS Oil.

WEMA BANK: PRESSURES GALORE

In the first quarter to March, Wema Bank was kept very busy wading off pressures from many angles.
According to the unaudited results for the period, interest income growth of 8.17% to N9657.5m was reduced to 5.8% increase in gross earnings to N11241.1m but that was the least of Wema troubles.
A major issue was that interest expense rose by 19.8% to N5631.9m. However the impact of this was whittled down by write back of N34.8m within the quarter as against N55.6m provision previously.
But then, net trading income declined by 65.6% to N110.6m and Other income decreased by 44% to N126.1m.
It was only fee and commission that chipped in good news as it increased by 17.1% to N1346.9m.
Hence despite personnel cost rising by only 0.96% to N2558.7m and Other expenses increasing by 5.94% to  N2017.7m, profit before tax decreased by 17.8% to N505.3m from N615.3m previously.
This translates into N4.5 gain on each N100 income compared to N5.79 at the same time in 2015.

WEMA BANK PLC: (Nm).
                     First quarter
                        2016.            2015
Gross earnings 11241.1.   10624.9
Interest income 9657.5.      8928.4
Interest expense 5631.9.     4700.3
Impairment.           34.8.        (55.6)
Commission.       1346.9.     1150.3
Trading income.     110.6.       321.1
Other income          126.1.       225.1
Personnel cost.     2558.7.    2534.4
Other income.       2017.7.     2145.0
Profit before tax.    505.3.       615.3
Profit margin %.        4.50.       5.79

MRS OIL: A FRIEND IN FINANCE

For most companies, finance remains a major part of cost especially of the type not within management control. For MRS Oil 174.7% increase in finance income to N169.5m  was a major fortune swinger in the first quarter to March.
Before it came into reckoning only cost of sale came up with 18.2% rise to N25622.3m ahead of 17.9% increase core income to N25071.1m and 17.9% lift in total income to N25622.3m.
The rest stayed in line by dropping or increasing at a lower rate. Income from other sources rose by 12.2% to N381.7m with selling and distribution cost dropping by 4.24% to N207.9m and administration expenses came to N1304.9m, up 13.6%.
So the twin good news from finance helped save MRS Oil from the loss league the same finance dragged it into in first quarter 2015.
In this first quarter, as finance income rose to N169.6m from N61.7m, finance charges dropped by 87% to N167.6m from N1388.6m.
The end result? Profit before tax ended the quarter at N626.5m compared to N734.5m loss by the previous first quarter.
That meant that a gain of N2.45 on each N100 income was reported as against N3.38 loss previously.

MRS OIL PLC:  (Nm)
                   First quarter
                         2016.              2015
Total income 25622.3.         21741.0
Core revenue 25071.1.         21339.1
Cost of sale.  23315.4.         19721.1
Other income   381.7.              340.2
Distribution     207.9                217.1
Administration 1304.9.          1148.5
Finance income 169.5.             61.7
Finance charges 167.6.          1388.6
Profit before tax 626.5.        (734.5)
Profit margin %    2.45.            (3.38)
Working capital 7566.6.        6891.7

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