Businesses operating in the Apapa axis may witness some relief soon as the Managing Director of the Nigerian Ports Authority (NPA), Hadiza Usman recently disclosed that the Apapa Wharf road will be reopened next month.
The road leads to the Apapa port, the busiest in the country. She also stated that rehabilitation of the roads leading to the Tin Can port would commence soon.
The reconstruction is worth N4.3 billion and is being funded by the Dangote Group, NPA and Flour Mills of Nigeria (FMN) Plc.
The following stocks may witness improved performance following the reopening of the road.
Dangote Sugar could witness a rebound in its operations for the remaining quarter of the year. The company had blamed the poor state of roads leading to the Apapa ports as one of the factors behind its poor H1 2018 performance.
Revenue dropped from N118 billion in 2017 to N84 billion in 2018. Profit before tax dropped from N25.2 billion in 2017 to N19.9 billion in 2018. Profit after tax also fell from N17.1 billion in 2017 to N12.7 billion in 2018.
The company refines its sugar at its Apapa facility and then distributes to the rest of the country. Difficulty accessing the port limited the volume of goods that could be evacuated.
Dangote Sugar is currently trading at N15.15 in today’s trading session on the NSE, down 0.33%.
Dangote Flour Mills
Dangote Flour Mills also operates its facilities out of the Apapa port. The company also had a drop in revenues. Revenue for the half year ended June 2018 show revenue slipped from N64.8 billion in 2017 to N56.8 billion in 2018. Profit before tax also dropped from N8.7 billion in 2017 to N4.3 billion in 2018. Profit after tax also fell from N5.7 billion in 2017 to N3.2 billion in 2018.
Dangote Flour is currently trading at N8.00 in today’s trading session, unchanged from the prior day.
Flour Mills of Nigeria Plc
Flour Mills alongside the Dangote Group and the Nigerian Ports Authority jointly funded the project to the tune of N4 billion. The company would not have done so if the bad roads did not have an adverse effect on its operations.
The company’s results for the three months ended June 2018 show revenue from the port operations and logistics increased from N265 million in 2017 to N288 million in 2018. Profit after tax, however, declined from N255 million in 2017 to N245 million in 2018.
Flour Mills is currently trading at N21.50, in today’s trading session down 2.27%.