QUARTER RESULTS: Diamond Bank, Mobil oil.

DIAMOND BANK: STILL TOUGH GOING.

It appears like financial year 2016 will be tough going for Diamond Bank PLC if its first quarter figures are anything to go by.
According to the unaudited figures, only three developments worked in the banks favour within the quarter while all else applied downward pressure on its fortunes.
The three factors were that it was able to drive other operating costs and personnel expenses down by 4.64% and 1.92% respectively at a time estimated gross earnings grew by marginal 1.77% to N52465.7 from N51554.4m and that net trading chipped in N5994.3m compared to loss of N17m in the first quarter of 2015.
All three only managed to keep Diamond bank within double digit profit margin range at 12.8%, down on 16.2% previously.
This was because the pressure from other factors was too much to roll back fully.
First, Diamond bank increased impairment provision by 36.3% to N8812.3m and income from non banking declined by 91.6% to N154m.
For another, a leap in fee and commission was used to generate only 15% increase in fee and commission income.
Lastly, even though interest income, as the main contributor to gross earnings dropped by 11.8% to N35,708.6m interest expense went down by only 10.3% to N10444.1m.
In the end, the banks profit before tax decreased by 20% to N6694m from N8367.3m
Will this be a pointer to the rest of the year? Hard to tell especially with the u certainty now enveloping monetary policy and potential impact of what is left of budget 2016 after all the mysteries, paddings and political horse trading.

DIAMOND BANK PLC: (Nm)
                    First quarter
                        2016.            2015
Gross income 52465.7.   51554.4
Interest inc.     35708.6.   40487.3
Interest exp.    10444.1.   11641.6
Impairment.      8812.3.     6467.5
Fee & Comm.  10608.8.    9228.3
Comm. Expense 2618.2.    866.2
Net trading inc.  5994.3.    (17.0)
Other income       154.0.  1838.8
Personnel.         8416.5.   8581.1
Other expenses 13342.1 13993.0
Profit b4 tax.       6694.0.  8367.3
Profit margin %. 12.8.        16.2

MOBIL OIL:  RIDING THE TIDE

According to its figures for the quarter to March, the tide is still very strong and turbulent but Mobil oil seems on top of it all.
Yes, says the unaudited results, both total and core income grew comfortably by roughly 37% each to N24120.4m and N17607m respectively but cost of sale stole the shine by rising by 39.6% to N18861.1m.
Thus growth in gross profit came to only 27.7%, not proportionate 37% at worst.
But again, Mobil oil recovered grounds by keeping growth in distribution and administration costs to 29.8% and 21.3% at N1674.4m and N891.7m respectively.
In addition, finance income grew by 27.9% to N16.5m and income from other operations rose by 30% to N1423.4m.
Then again, higher loss of N5.75m from non operations activities compared to only N.13m similar loss previously, released some air from the balloon.
Hence, from 37% increase in total income plus fair control over costs, Mobil oil settled for only 30% growth in profit to N2687.2m.
That worked out at N11.1 gain on each N100 income, naturally, a little lower than N11.7 for 2015 first quarter.
Not bad but it could be better.

MOBIL OIL PLC: (Nm)
                     First quarter
                      2016.              2015
Total income 24120.4.     17607.0
Core income. 22680.5.     16499.2
Cost of sale    18861.4.     13509.4
Gross profit      3819.1.      2989.8
Other income   1423.4.      1094.9
Distribution       1674.4.      1289.7
Administration   891.7.         735.3
Finance income  16.5.            12.9
Finance cost.       -                   5.7
Profit before tax 2687.2.   2066.8
Profit margin %   11.1.        11.7
Working capital 1958.4.    1034.8

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