Companies
It’s over, Etisalat UAE throws in the towel
The Etisalat Nigeria saga has developed yet another twist, as a press release issued on the Abu Dhabi Stock Exchange confirms that Etisalat UAE has pulled out from the Nigerian unit. Despite these developments, the telecoms company has fervently maintained that negotiations are still ongoing with its creditors.
Here are key highlights:
- The parent company has written off the value of its stake to zero.
- The firm has been a given a deadline of June 23 to transfer its stake.
- Etisalat Nigeria owes it $52 million for operational services.
- The creditor banks are now preparing to take over the telco.
Etisalat Nigeria has struggled to agree terms with a consortium of banks that lent it $1.2 billion. The banks have threatened to take over the firm in order to recover the debt. Intervention by the Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) has yielded no benefits and both agencies have declined comments.
Etisalat’s pulling out is confirmation that United Arab Emirates state owned investing company, Mubadala is not interested in bailing out the Nigerian entity and may have also resigned to losing its indirect stake in the Nigerian entity.
In the event that Etisalat withholds the use of its brand name, the company may have to undergo re-branding. A change in name may also stand the risk of further alienating customers.
Data from the NCC for the three months ended March 2017, show the telco lost the highest number of customers.
Here is a copy of the press release posted on the website of the Abu Dhabi stock exchange.
Read more on this story here
Companies
COVID-19, VAT, FX scarcity adversely impacted our operations in 2020 – Nigerian Breweries boss says
NB Plc’s operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase and FX devaluation.
The management of Nigeria’s leading brewer, Nigerian Breweries Plc has revealed that its operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase, FX devaluation and scarcity of foreign exchange.
This statement was made by the Managing Director of Nigerian Breweries, Mr Jordi Borrut Bel, at the company’s pre-AGM media briefing for the financial year-end 2020, which held in Lagos this week.
He noted that the increase in the brewer’s cost in 2020 was due to the COVID-19 pandemic which disrupted the company’s operations, as well as the increase in VAT, devaluation and FX scarcity which has put pressure on input cost.
READ: Alcoholic beverage makers on NSE lose a total N27.7 billion in a single day
The Nigerian Breweries boss explained further that the increase in cost could not be fully attributed to currency devaluation and foreign exchange scarcity.
He explained that the increase in costs of goods sold, as reported in its audited financial results, could also be linked to the increase in the volume of goods sold, as the company’s sales volume in 2020 increased by almost the same percentage as the cost of goods sold.
To deal with this challenge going forward, he revealed that the company is focused on the supply chain, and will continue to seek out ways to mitigate any of the price increases coming from FX scarcity.
READ: Brewery sector: A quarter to forget
The company’s profitability in question?
An analysis of the company’s result revealed that despite the 4.3% increase in net revenue from N323.00 billion recorded in 2019, to a total of N337.01 billion in 2020, the company’s profit declined significantly by 53.3% to N7.53 billion.
Speaking on this, Jordi Borrut in his statement at the press briefing noted that the brewer’s business performance in 2020 was quite impressive especially in the face of the COVID-19 pandemic and economic recession. Despite these challenges, the company maintained a strong and healthy balance sheet.
“There was a slight reduction in profitability but compared to the previous year, the business witnessed an improved growth in revenue. The significance of this is that the business became more stable and healthier,” he said.
READ: Nigeria’s triangular beer war on the rise with the arrival of Budweiser
What you should know
- Nigerian breweries, being the largest brewer in the country, maintained its stance in terms of generating profits year-on-year. The company emerged as the only brewer to record a profit of N7.37 billion from its operations in 2020, 54.3% lower than 2019 figures (N16.1 billion).
- From this, the leading brewer was able to pay shareholders a total dividend of N7.5 billion, translating to a dividend of 94 kobos per share – a dividend payout in which exceeds 100%.
- While Guinness and International Breweries made a loss of N12.6 billion and N24.9 billion respectively, this reality impacted their ability to pay their shareholders dividends in 2020.
Business News
Highest paid Nigerian bank MD/CEOs of 2020
Bank MD/CEOs in Nigeria earned a combined N1.5 billion in salaries in 2020.
The banking sector, especially commercial banks, is one of the most profitable sectors of the Nigerian Economy churning out profits of close to a trillion in 2020 alone. They are also one of the highest employers of labours in the country employing over 93,000 Nigerians.
Sitting at the helm of affairs is the Chief Executive/Managing Director, the highest-ranking executive in the organization saddled with the responsibility of making the best corporate decisions, oversight of the execution of the organisation’s corporate strategies and most importantly increasing the shareholders’ return. The buck basically stops on their table.
Thus, these enormous responsibilities also come with a considerable executive compensation for their service making them ostensibly the highest-ranking staff of the bank.
READ: Jim Ovia: From a clerk to founder of Nigeria’s most profitable bank
In typical Nairametrics fashion, we bring to you a list of the highest-ranking bank CEOs for 2020 based on their executive compensation (exec comps). The bank MD/CEOs under our review earned over N1.5 billion in salaries in 2020.
The data was sourced from the published audited accounts of the bank and verified by Nairametrics Research.
