This Corporate News Compilation for the week ended November, 4th 2017 is brought to you by Bluechip Technology Ltd Nigeria.
- Vik Industries Ltd announced the introduction of “Nigeria’s first ever locally-produced groundnut spread” named Nutzy peanut butter. The company claims the peanut butter is better than some of the imported brands we have in local supermarkets (don’t expect you to believe that). They also claimed the peanut butter can be used to prepare local soups, sauces and dips. Explaining why he thought the butter could do better than foreign made ones, he claimed it is because Nigerian groundnuts taste differently and are one of the best in the world. So, I looked up these guys and they have a manufacturing plant in Oshodi Isolo area of Lagos. They are more renowned for manufacturing plastic products, so it appears this is a new product division. The company’s CEO is Mr. Ajay Ramnanai. The company by the way, has been in Nigeria for over 50 years.
- Ahead of the impending competition from Kwese TV and TsTV, Star Times has launched its own Pay per day model for all its bouquet. Start Times said its customers, who are mostly lower middle class can watch as many as 30 channels with just N60 per day or N300 per week for its NOVA bouquet. Considering that it cost N900 a month for the same bouquet, the Pay per day buffs are effectively paying double he amount it cost for a one-month subscription.
- Uber seems to have upped its game with a rash of new features for its drivers. The new GM, Uber West Africa, Lola Kassim, said the introduction of new features was in response to some of the feedback they have received over the past few months. Here are examples of some of the new features. Drivers and riders can now chat within the app instead of calling on their mobile phone. This is good for those who hate to reveal their private numbers. Uber drivers can now share their trips to “their loved ones”, a security feature for drivers carrying riders into destination which they feel is unsafe. Uber drivers can also set a time when they want to go home enabling them to book rides that are on their path home, helping them to some extra bucks. Uber has about 7,000 partners in Nigeria with under 300 thounsands riders.
- MTN gave us the closest date yet to a launch of its impending IPO. Its CEO, Rob Shutter informed the media that the IPO “project” could go live in the “next six months or so”. 6 months from now is in May 2018. In a related news, farmers in the Northern part of Nigeria pleaded that MTN deactivate unregistered SIM cards in the north, which it claims is being used by Boko Hara, members to perpetuate violence and terrorism.
- Globacom reported last week that it was building about 200 base transceiver stations (BTS) at a cost of about N18 billion. This suggest the cost of the base station is about N90 million each. The NCC claims Nigeria has about 40,000 base stations and is said to require about 80,000 BTS. Investments in the telecoms industry dried up in 2017 as GSM firms suffer the effect of a recession.
- This time last year, airlines were lining up in droves to pull out of flight operations from Nigeria, following the exchange rate crisis. However, 2017 has turned out better than expected after the CBN introduced the Importer Exporter window, increasing forex inflows into the country. Emirates airline, one of those that left confirmed it (I hear it’s the Minister not them) is resuming flight operations out of Abuja after one year of suspension. And by the way, British Airways and Emirates have also rolled out decent end of year promos for travelers. Check here, if you need cheap tickets.
- South African firm, Sumitomo Rubber, South Africa has teamed up with Tyre Express Nigeria Ltd to introduce a Dunlop Store in VI, Nigeria. The South African firm sells Dunlop, Falken and Sumitomo tyres brands in about 48 African countries. Sumitomo is a Japanese company with presence in about 9 African countries. They are, Kenya, South Africa, Morocco, Ghana, Madagascar, Mozambique, Angola and Tanzania. Strangely, they don’t have a base in Nigeria.
- There was more capital raising news last week, following the announcement by Flour Mills that it was embarking on a rights issue. The company plans to raise N70 billion which it plans to repay its loans. Lafarge earlier announced it wanted to raise N132 billion. We will be watching these two offers closely as I do not know if this market is deep enough for over N200 billion in a space of 6 weeks. About N127 billion was raised in the first half of this year via rights issue. The highest we have ever raised in a rights issue in any year was N200b and that was in 2014.
- On the housing front, Lagos State Government announced that it has signed an MOU with the Nigerian Mortgage Refinance Company to deliver about 20,000 housing units. If there is one thing the NMRC is very good at, it is signing MOUs. It was setup to help inject liquidity in the housing sector, however, housing for all still remain a utopian desire.
- In related news, Grenadines Homes, who we reported a few weeks back was developing of the N40 billion Atlantic Resort, revealed that it is introducing a concept hotel that will provide high returns on investment for investors. The Oceanna hotel room, as they call it, basically allows investors to have a stake in a hotel room and will earn a good portion of the rate paid by guests. This is not exactly a new concept around the world, but its fairly new in Nigeria. Some investors have tried unsuccessfully to introduce it. Grenadines claimed it will give investors about 14% returns per annum as against 6% for buy to let investments. Buy to let investments, which is another name for rental properties, yield about 6%, according to their data. They also claim it will take about 17 years to recover your money.
- Still on real estate, Transcorp announced last week that it had signed a 20-year extension of its management contract with Hilton.
- The newly established Development Bank of Nigeria has commenced lending activities. Last week, it reported that it lent out about N5 billion to three microfinance banks. They are, Fortis Microfinance Bank Plc, LAPO Microfinance Bank Limited and NPF Microfinance Bank Plc. The banks will be expected to lend the money to about 20,000 entrepreneurs.
- In our “one chance” story of the week, a Ford model, Nneoma Anosike has taken Wema Bank to court for using her face in an ad. According to her lawyers, Wema Bank used her for an advert with the bank’s corporate logo beside her face and the words, “Be yourself, everyone else is taken”. Her lawyer also claims, this projection of Nneoma by the bank was with the aim of projecting the bank’s value and goodwill using her fame and popularity. They have sued Wema Bank, N20 million.
- By the way, Access Bank said it has signed a deal with Chinese car maker GAC Motors to offer potential vehicle buyers loans to buy the car. They claim all you need is to provide 10% equity and with a “brought down” interest rate of 24%.
- Diamond Bank has confirmed plans to spin off some of its assets outside Nigeria, part of its restructuring plans. First on the list is Diamond Bank SA, where it plans to divest 97.7% of its holdings. It plans to sell it for 61 million Euros. Their 2016 annual report shows they valued the investment at N5.8 billion. Their other subsidiary, Diamond UK is valued at N7.9 billion.
- A newspaper reported last week that a US company was planning to acquire a Nigerian Bank. According to the report, United States-based private equity firm, Milost Global Inc, is currently conducting due diligence on one of Nigerian banks in preparation for possible acquisition. They did not reveal the name of the bank but only stated that they have about 250 branches. We don’t know for sure but what bank this is, but it might be Unity Bank. Unity Bank has about 240 branches and we understand that they are looking to raise capital.
- Some of us were shocked to hear last week that Rosatam, a Russian state-owned company has signed an agreement with Nigeria to construct and operate a nuclear power plant and research center in Nigeria.
- Looks like the NNPC is about to compete with the CBN/BOI on the establishment of a bio-fuel plant. A few months ago, the CBN/BOI reported that it wanted to setup one in Kogi State, and is expected to cost about $300k. NNPC took their own rhetoric a step further, by announcing that it was setting up a 65 million litres bio-fuel plant in Okeluse, Ondo State. They claimed it will create a whopping 1 million jobs in Ondo State. The CBN/BOI plant was expected to have a capacity of 100k litres per day.
- Finally, Total Nigeria has inaugurated its second lube production plant in Nigeria. The plant is in Koko, Delta State. The first is in Kirikiri Lagos.
Unilever earmarks N62 million as remuneration to its Non-Executive Directors in 2021
Unilever Nigeria has fixed its remuneration to the Non-executive Directors of the company in 2021 at N62 million.
One of Nigeria’s leading FMCG companies, Unilever Nigeria Plc, is set to pay out a total of N62 million as remuneration to its Non-Executive Directors for the year ended December 31, 2021.
This disclosure was made by the leading consumer goods company as one of the key resolutions that would be considered and passed at the Company’s ninety-sixth (96th) Annual General Meeting, which will hold on Thursday 6 May 2021 at 10.00 am.
The famed manufacturer of Sunlight detergent also revealed that in addition to the N62 million remuneration, sitting allowances will be paid at standard agreed rates for each meeting attended and the Chairman of the company will be entitled to a vehicle allowance of N12 million gross per annum.
Short-term benefits paid by Unilever in 2020 to its Directors
Despite the fact that Unilever Nigeria Plc has not paid its shareholders dividends for about two years now, the FMCG company paid out short-term benefits of about N511 million and N73 million to its Executive and Non-Executive Directors in 2020 respectively, compared to a sum of N590 million and N59 million it paid out in 2019 respectively. The members of the leadership team, excluding the Executive Directors of the company, were paid a total of N867 million short term benefits in 2020, down from the N1.04 billion they received in 2019.
On the flip side, the total payout as wages and salaries to the company’s employee in 2020 was N5.05 billion, this is down from the N5.99 billion which the company paid out in 2019.
In case you missed it
According to a recent result by Unilever Nigeria Plc, the company made a loss of about N492 million in the first quarter of 2021. This figure is 144.1% lower when compared to the profit of N1.114 billion made by the company in the corresponding quarter of 2020.
Unilever’s revenue however surged by 45.7% during the quarter. However, the growth in the cost of sales, and the huge 63.3% increase in marketing and administrative expenses pressured the profits down to a loss of N492 million in the first quarter of 2021.
What you should know
- Shares of Unilever Nigeria Plc are currently valued at N12.95 per share, placing the YTD loss in the shares of the company at -6.83%.
- Unilever Nigeria Plc is the sixth most valuable consumer goods company listed on the Nigerian Stock Exchange, with a robust market valuation put at N74.4 billion, higher than Guinness Nigeria Plc, NASCON Allied Industries Plc and PZ Cussons.
- The shares of the top FMCG brand is trading 23.8% lower than its 52-week high price of N17, and 23.3% higher than its 52 week low of N10.5.
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.
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.
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.
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.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- 2020 FY Results: Guinea Insurance Plc reports a loss of N227.7 million.
- 2020 FY Results: Unity Bank Plc posts profit after tax of N2.09 billion.
- Guinea Insurance Plc reports a loss of N142.13 million in 9M 2020.
- Unilever Nigeria Plc set to hold Annual General Meeting on 6th of May.
- UBA Plc posts profit after tax of N38.16 billion in Q1 2021.