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Forte Oil to eliminate “I better pass my neighbour” with new alternative energy product

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In an exclusive tweet chat yesterday with Nairametrics, Mr Akin Akinfemiwa Group CEO of Forte Oil Plc discussed several issues relating to his company, the power sector, entrepreneurship and his favourite musicians. in case you missed the thread, here’s a link.

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You can follow the conversation by searching for the hashtag #FOCeoConvo on Twitter. He also revealed that the company would launch mobile solar power solutions by September 2017.

Chairman of the company, Femi Otedola had earlier hinted on the company’s diversification plans in his interview with Forbes Africa last year. Total Nigeria in 2015, embarked on a pilot scheme for mobile solar solutions for homes. In addition, the company is also powering some of its petrol stations with solar energy.

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According to him, the company is looking to replacing the predominant use of diesel powered generators with emission free energy solutions that according to him will push away the reliance on smaller generators popularly called “I better pass my neighbour”.

What does this mean for the company ?

Diversifying into solar energy solutions provides another source of revenue for the company. It also means they will not be caught unawares if crude oil prices should drop further. While Nigeria may be a bit behind in adoption of solar energy solutions, increasing investments in the sector means costs will come down. Nigeria has an acute power problem with most parts of the country running on generators for a greater proportion of the day.

This could also create another revenue stream for the company which currently relies on petroleum products for over half of its revenues. A tilt towards affordable alternative power also gives it access to a large retail base, who are currently underserved in the power sector.

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Why are oil companies moving into alternative energy ?

The move by oil companies into alternative energy is a global one. Oil prices are forecast to trend lower due to the abundance of shale oil and the falling peak demand from countries. Automobile companies are increasingly focusing efforts on producing electric cars, a move that would also reduce demand for petrol and other fossil fuels. Chevron, is the world’s largest private producer of geothermal energy.

Forte Oil shares closed at N57.50 yesterday the Nigerian Stock Exchange (NSE) down 32% year to date. It’s share price is currently up 9.5% as at noon July 25th, 2017.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Companies

UBA denies N41 billion NITEL fraud allegations

United Bank for Africa (UBA) has described the alleged N41 billion fraud levied against its Chairman, Mr Tony Elumelu, as untrue, misleading, malicious, and libellous.

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UBA Records 13% Earnings Growth and Delivers N111billion Profit

The Management of the United Bank for Africa (UBA) has described the alleged N41 billion fraud levied against its Chairman, Mr. Tony Elumelu, as untrue, misleading, malicious, and libellous, and said that it should be disregarded in its entirety.

This was disclosed in a statement issued by the bank to the Nigerian Stock Exchange and signed by the company’s secretary, Bili Odum, on Friday. Media reports in some online blogs alleged the former CEO of the bank was indicted” prompting the bank to issue a denial via a press release.

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In the press release stated Statement To The Nigerian Stock Exchange on False Reports in the Media, the bank stated that “it has set in motion all appropriate legal actions to ensure that the misleading reports are retracted and the perpetrators held accountable for their actions”.

READ MORE: Guinea Insurance Plc gives optimistic Q3 earnings forecast in spite of COVID-19

It also stated that it will “continue to conduct its business in line with global best corporate governance practices, extant laws, and regulations,” as it has done in over 70 years of operations.

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Back story: The counsel to NITEL, J.U Ayofu petitioned the Senate Committee Chairman on Ethics, Privileges and Public Petitions about the alleged fraud. The committee chairman, Senator Ayo Akinyelure, claimed the ”the N41billion alleged fraud was committed against the defunct Telecommunications company and National Carrier, NITEL”

They alleged the amount was withdrawn “systematically from NITEL for nine years” under the leadership of the bank.

READ ALSO: N1.5 billion Probe: Contractor could land in EFCC net for abandoning CCB project 

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Senate Committee Chairman on Ethics, Privileges and Public Petitions, Mr. Ayo Akinyelure, reportedly said, “The N41 billion alleged fraud was committed against the defunct telecommunications company and national carrier, NITEL.

According to the reports, in view of this, the senate committee has summoned the Group Managing Director/CEO of UBA, Mr. Kennedy Uzoka, to appear before it on Wednesday, August 5, 2020.

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Despite the allegations, the Management of the Bank denied all the allegations and will use all legal means to clear its name. “We have set in motion all appropriate legal actions to ensure that the misleading reports are retracted and the perpetrators held accountable for their actions.”

READ ALSO: More banks, insurance firms declare closed periods ahead of H1 results release

UBA’s 2020 second-quarter result is expected to be released next week. The market appears to have shrugged off the allegations as thee company’s share price closed at N6.2  gaining 3.3% week on week.

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Airtel Africa’s profit up 12.9%, customer base reaches 111.5 million

Airtel Africa had risen in customers’ base by 11.8% to 111.5 million in spite of the pandemic.

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Airtel Africa’s profit up 12.9%, customer base reaches 111.5 million in Q2

Airtel Africa on Friday posted an impressive Q1 ending June 2020 financial statement with an operating profit of $210 million up by 12.9%which showed a 111.5 rise in customers’ base of 11.8% to 111.5 million in spite of the ravaging COVID-19 pandemic. The Company also reported an operating profit of $210 million up by 12.9%.

Airtel reports its year end March 31st 2020.

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Key highlights of Airtel Africa Q1 2020 include;

  • Customer base grew by 11.8% to 111.5 million.
  • Revenue increased by 6.9% to $851m, with constant currency revenue growth of 13.0%
  • Constant currency revenue growth was recorded across all key business segments, with voice revenue up by 2.2%, data by 35.7%, and mobile money by 26.3%.
  • Underlying EBITDA increased by 7.9% to $375m, with constant currency growth of 14.6%
  • The reported underlying EBITDA margin was 44.1%, up by 40 bps.
  • Operating profit increased by 12.9% to $210m, an increase of 21.5% in constant currency
  • Free cash flow was $96m compared to $62m in the same period last year.
  • Earnings per share (EPS) before exceptional items was $1.0 cents and basic EPS was $1.1 cents.
  • Net debt to underlying EBITDA was 2.2x, compared to 3.0x in June 2019.

(READ MORE: Airtel Africa announces IPO result in Malawi, says its fully subscribed)

Raghunath Mandava, chief executive officer, Airtel Africa explained the company’s business was to survive the COVID-19 pandemic amid all odds. He said;

“During the last quarter, our business was impacted by the Covid-19 pandemic, as restrictions on movements of people and ways of socializing were introduced to contain the spread of infection. In these unprecedented times, we have worked with governments, regulators, partners, and suppliers to keep customers and businesses connected as well as supporting the economies and communities.

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“We focused on expanding and maintaining our network to ensure it could cope with increasing demand, we kept our distribution up and running by increasing the penetration of digital recharges and stock levels, and we expanded our home broadband solutions to ensure customers could work and access entertainment remotely.”

Raghunath Mandava, chief executive officer, Airtel Africa spoke about growing concerns on the resurgence of COVID-19, but he was optimistic based on Airtel Africa’s present result and investment. He continued by saying ;

“The outlook remains uncertain, particularly regarding a so-called potential second wave of infections and the actions governments will decide to take in that event. However, these results are further evidence of the growth opportunities our markets offer and the effectiveness of our strategy to focus on winning customers, investing in our network and expanding our voice, data and mobile money businesses.”

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The stock is presently trading at N348 with a market capitalization of N1.308 trillion, dividend yield at 3.38%, price/earnings ratio at 10.63 at the time this report was drafted.

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Business

MTN expands scope of tower service, targets rural connectivity

The development would also improve cost for future technology evolution and backhaul in the network.

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MTN Nigeria, MTN Nigeria Communications Plc. begins N100 billion commercial paper issuance today

MTN Nigeria Communications Plc has reached an agreement with Global Independent Connect Limited, INT Towers Limited and IHS Towers Limited to expand the scope of their current service agreements, amend the currency conversion provision for tower services.

This was disclosed in a statement issued by the telecommunication firm and published on the website of the Nigerian Stock Exchange.

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Chief Executive Officer, MTN Nigeria, Ferdi Moolman, explained that the company is pleased to agree to the mutually beneficial update to its agreements with IHS, adding that the changes would provide clarity for both parties on foreign exchange denomination with Naira payments, while also extending the telco’s relationship into key new areas.

READ MORE: Africa Prudential suffers revenue drop as Covid-19 bites contracts business

What it means: With the concluded renegotiation of certain terms of its tower agreements, the telco giant can now increase focus on rural connectivity and fibre deployment. The development would also improve cost for future technology evolution and backhaul in the network, which will bear fruit in the longer term while agreeing to move the reference rate for conversions to Naira from the Central Bank of Nigeria’s official rate to the Nigerian Autonomous Foreign Exchange Rate (NAFEX).

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Moolman said, “I am particularly excited about the partnership to expand fibre connectivity and deliver accelerated rural telephony. The COVID-19 pandemic has demonstrated the huge importance of digital infrastructure, and these agreements enable us to enhance fibre networks, while rapidly connecting those Nigerians in rural areas that are currently unable to access telecommunications services.”

READ ALSO: Profiles of the men who determine your internet experience

In 2014, MTN Nigeria took a strategic decision to sell its passive infrastructure (including towers) and focus on its core business. Although the company retains a small number of towers, it currently has agreements in place with a number of tower providers across the country, including IHS.

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