FULL YEAR RESULTS: ABC TRANSPORT, UNION BANK.


ABC TRANSPORT PLC: JUST ABC

If ABC Transport PLC experience in 2015 is anything to go by, the making profit in equally tough 2016 will be  as easy as ABC, never forgetting though that ABC is not easy for toddlers. Fun may be, but not that easy.
According to the 2015 results, ABC Transport recorded drop in both total and core income by 4.31% and 7.49% to N7242.3m and N7568.8m respectively. But not to worry, there was good grip on costs
Firstly, cost of generating the reduced income went down at a faster rate. It dropped by 12% to N5163.8m. Thus, from the revenue drop, ABC Transport reaped 10.3% growth in gross profit.
Secondly, there was 7.15% decrease in administration expenses to N1372.3m and 18.2% decline in finance cost to N387.3m.
Added to Other gains that more than doubled to N340.2m, and fair asset value gain of 25.2%, this mix of good news was more than enough to absorb 32.4% drop in investment income, more than doubled impairment provision and near wipe out of interest income.
In the end, ABC Transport cruised home with N295.1m profit in 2015 compared to N260m loss in 2014.
Just like ABC? May be, now the task is still to improve on this in 2016.

ABC TRANSPORT PLC: (Nm)
                            2015.           2014
Total income.   7242.3.       7568.8
Core income.    6757.4.       7347.9
Cost of sale      5163.8.       5867.5
Gross profit       1633.6.       1480.4
Administration. 1372.3.       1477,9
Other income      102.1.          94.9
Interest income   0.036.         1.97
Assets fair gain   2.04.            1.63
Investment income 0.50.       0.74
Impairment.         23.7.           9.88
Other gains          340.2.       121.7
Finance cost        387.3.       473.5
Profit before tax   295.1.     (260.0)
Profit margin %     4.07.       (3.44)

UNION BANK: NO EASY OPTIONS

Union Bank Nigeria PLC ended 2015 with no easy options if it wants to do better than in 2016 yet it is imperative that it performs better.
According to the audited figures for the year, shedding work force to reduce wage bill may not be easy because even in 2015 watchful eyes here must have ensured that personnel cost grew by only 0.77% to N30041m. But of course, there is room for this that is if gross earnings continues to go down like it did in 2015 by 13.8% to N117211m.
By then Labour Ministers Ngiges order to retain workers till July stakeholders will certainly make no sense.
Interestingly, Union Bank did its best to cut operations cost in 2015 scaling down by 9.37% to N23823m. Then again, even this didn't match income drop and still needs more trimming in 2016 all things being equal
More importantly, 44.8% increase in interest expense to N35219m while generating only 19% increase in interest income to N90902m remains a losing hand that can not also continue in 2016.
Not to talk of 106% leap in impairment provision to N9948m in view of structural weaknesses in lian portfolio amidst today's trying times across the board.
Thus, of all income streams, only net trading income played a very delightful hand growing by 142.9% to N5231m.
No wonder, as profit before tax decreased by 47.5% to N14548 Union Bank bottom line thinned to 12.4% from 20.4% in 2014.
Decoded: should the 2015 trend continue in 2016, some staff trimming may be inevitable, some rethinking of loss branches may surface and  eagle eyes may shine more for profitable non-core banking opportunities.

UNION BANK NIGERIA PLC (Nm)
                             2015.         2014
Gross earning  117211.      135898
Interest income 90902.        76373
Interest expense 35219.     24317
Impairment.         9938.       4828
Fee & Comm.       7697.     10153
Net trading gain  5231.        2154
Fair value gain    1820.            -
Other Op exp.     23823     26287
Personnel.          30041.    29812
Profit before tax 14548.    27710

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