Nairametrics| Corporate profits for the financial year ended December 2016 contracted for select companies on the Nigerian Stock Exchange, according to data compiled by Nairametrics. Data reveals the 50 companies on our list reported a combined pretax profit of about N853 billion, representing a 4% contraction from the N889.7 billion reported in 2015.
Highlights
General
- A survey of about 50 quoted companies on the Nigerian Stock Exchange reveals a total profit after tax of N766.3 billion in the financial year ended December 2016 compared to N768 billion in the same period in 2015.
- Pre-tax profits were N853.1 billion for the year ended December 2016 compared to N889.7 billion reported in the same period in 2015.
- Total tax paid in 2016 was N86.7 billion, representing a 29% drop from the N126.7 billion reported a year earlier.
- Currently, the NSE 30 Index of some of the most capitalized stocks on the exchange has a market value of about N8.2 trillion. Most of the select companies in our list are included in the NSE 30.
- As a mere proxy, this will suggest that a price earnings ratio of about 10.7x. A better measure will have to include profits from all the companies listed on the exchange.
- The pension index of 40 companies currently has a market valuation of about N3.7 trillion suggesting a price to earnings ratio of about 4.89x
Agricultural Sector
- The Agricultural Sector made up of Livestock Feeds, Presco and Okomu Oil saw profit after tax rise 4 folds to about N26.7 billion.
- Taxes also rose from about N2 billion to about N10.5 billion for the period ended December 2016
- Presco recorded the largest chunk in profits with about N21.7 billion
Banking Sector
- The banking sector reported a total profit after tax of N449 billion compared to N433 billion the year before
- Banking sector profits represents over half of the total profits reported by the 50 companies selected. About 14 banks were represented in the pool
- GTB and Zenith Bank posted a combined profit after tax of about N261 billion, more than half of the total profits declared by the sector
- They also contributed the most taxes with a total of N59.9 billion out of the N137 billion reported.
- The Banking Index as a market cap of about N1.9 trillion, thus suggesting a total price earnings ratio of about N4.3x
Consumer Goods
- The consumer goods sector which was mostly hit by the 2016 recession reported a profit after tax drop of about 41%.
- Profits after tax for the year 2016 was N67 billion compared to 2015 profits of about N114.8 billion.
- The most significant drop in profit after tax was from Nestle with a profit after tax of N7.9 billion compared to N73.7 billion in 2015.
- It is important to add that profits in 2015 included tax credits
- Tax credits in 2015 was N20.7 billion for companies in this sector
- The consumer goods sector currently has a market cap of N2.1 trillion thus a price earnings ratio of 32x.
Industrial Sector
- The industrial sector was also under pressure from the recession as most companies witnessed industry cutbacks.
- Pre-tax profits dropped a whopping 25% to N167.4 billion compared to N225 billion reported in the same period in 2015.
- The sub group’s pre-tax profits were negatively affected by the N22 billion loss before tax reported by Lafarge,
- Pre-tax profits from Dangote Cement was N180 billion
- The industrial sector also benefited from tax credits in 2016, as they claimed about N42,6 billion in tax credits compared to a net tax payment of N11.6 billion in 2015.
Oil and Gas Sectors
- The oil and gas sector was understandably hard hit by the 2016 recession.
- However, the data revealed mixed performances between the upstream, integrated and downstream sectors.
- In general, the sector recorded a 2016 pretax loss of N69 billion largely driven by losses from Seplat and Oando at N47.4 billion and N63.3 billion respectively.
- Downstream companies like Mobil and Total recorded pretax profits of about N32 billion compared to N13 billion reported in 2015.
Here is a list of all the companies featured in this report.
