Companies
Dufil Prima, owners of Indomie wants to raise N40 billion in long term debt
Dufil Prima, the company behind the popular Indomie noodles, has signalled intentions to raise N40 billion from Nigeria’s debt markets. Though details about the debt issue have not been released, the company has appointed Stanbic Ibtc as advisers to the transaction.
The company did not reveal much details about the deal and the financing need, however it is likely that it is raising long-term debts to refinance existing debts as well as have some cash on hand to confront emerging competition from the likes of Honeywell and Flourmills of Nigeria.
Back in April 2017, Dangote Flourmills announced that it has exited its noodles business and has sold the assets of Dangote Noodles to Dufil Prima Foods. Dangote Flourmills had said that a business portfolio review revealed that the noodle business was not strategic to its vision.
Capital Raising spree
The first half of 2017 has witnessed a flurry of capital raising exercises mainly from companies in the consumer goods. Unilever also recently announced a N58 billion rights issue and Guinness, Nigeria second largest brewer, also announced it was accessing the markets for a about N40 billion in rights issues.
Lafarge Africa, Nigeria’s second largest Cement Maker also announced it was raising capital via a N140 billion rights issue. UACN, a conglomerate that also owns a consumer goods chain, also announced it planned a N15 billion right issue this year.
Dominating FMGC Manufacturing
Earlier in the year, Kantar Worldpanel’s Brand Footprin ranked Dufil Prima Foods Plc as the number 1 noodle brand in Africa. Dufil Prima Foods Plc, makers of Indomie earned the number one spot in the Fast-Moving Consumer Goods (FMCG) category across Africa, in a research firm’s that covered about 15,000 brands, 200 categories, 44 countries and five continents, representing 74 per cent of the global population.
De United foods commenced operations in 1996 in Ota, Ogun State. The company originally started with production of Indomie noodles, but has since diversified into the production of pasta, cooking oil, and chin chin.
Dufil Prima Ltd was incorporated as a private company in 2001 but following a restructuring, it was registered as a public limited liability company and became the holding company of the group in 2008.
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.
