Welcome to Corporate News roundup for the week ended August 24, 2018. Corporate News roundup is a weekly roundup of corporate news and action that took place the previous.
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DStv was a major feature in the news last week. Justice Nnamdi Dimgba of the Federal High Court sitting in Abuja, last week granted an interim injunction halting the hike in DStv subscription rate by MultiChoice Nigeria Limited. Following the court’s injunction, Nigerians have come out en masse reacting to the news.
As some expressed gratitude to the Consumer Protection Council (CPC), a regulatory body that challenged DStv’s subscription hike, others sounded a note of caution. So what is the bone of contention here? In July, MultiChoice raised the subscription rate for the DSTV Premium package from N14,700 to N15,800, Compact Plus from N9,900 to N10,650, Compact from N6,300 to N6,800, Family from N3,800 to N4,000, and Access from N1,900 to N2,000. The judge then granted a motion restraining DStv from implementing the new rates.
Well, DStv is obviously not obeying this order even though it is yet to issue an official comment. According to it, the court documents have just been received and are currently being reviewed. I get that this is a populist decision, but we have to be careful about the government trying to fix prices. I am no judge or lawyer, but DStv is not a monopoly, so I do not see a basis for trying to set prices for it.
While the news of the injunction raged on social media, Multichoice unveiled DStv Now, an internet-based service with live sports, live TV shows and movies on Catch Up. According to the company, the app is now available for Samsung smart TVs (selected models from 2015 onwards), Apple TV (fourth generation & newer) and media players running Android TV (Google certified devices only) Apps are also expected to be added shortly for additional brands of smart TVs (sorry no LG for now).
This looks like an attempt to compete with Netflix which launched in Nigeria about two years ago. Unlike DStv, Netflix offers several original exclusive contents which DStv does not. However, DStv has a lot more content which is exclusive to it and not available to Netflix subscribers. Content such as sports, music, movie channels and even some series.
In all this, it appears that the internet service providers will be the winners. Why would anyone with a decoder want to stream DStv on TV?
Still on DStv, rival (allow me to use that term), TStv reported that it is teaming up with NigComSat to take on DStv. Apparently, TStv and NigComSat have an active agreement with China Great Wall Industry Corporation (CGWIC) for Direct-to-Home (DTH) services and are putting a “common front to tackle competitions.”
According to reports, “the NigComSat DTH system is capable of providing commercial broadcasting services to Nigeria and all countries within its coverage, from Senegal in the West to Namibia in the South.” They claim that this helps TStv air over 100 TV channels.
Last week, MTN confirmed the appointment of Mazen Mroue as its new Chief Operating Officer (COO). Mroue’s appointment took effect from August 6, 2018. Mroue joins MTN Nigeria from MTN Irancell, where he had also served as COO since July 2014. His appointment could be viewed as a step closer towards the impending IPO scheduled for sometime next year. By the way, MTN also denied that it planned to sell its stake in Jumia.
Still on MTN, the company reported during the week that it has made a slight readjustment to its business model by focusing less on investment in voice facilities and more on data facilities.
According to MTN’s General Manager for Corporate Treasury Finances, Mr. Ishmael Nwokocha, who recently made this disclosure in Lagos, much of the N180 billion earmarked for the company’s Capex in 2018 was geared towards network expansion/upgrade and optimisation for data.
This, he said, is part of the company’s effort to meet its subscribers’ increasing demand for data. MTN spent N192 billion, and N225 billion in 2016 and 2017 on Capex, most of which went to data-driven network expansion. This is obviously a no-brainer, seeing how much MTN made from data. MTN Nigeria’s data revenue was up by 64% to N79billion (R3.1b) in the 6 months ending June 2018.
Neimeth Pharmaceuticals to raise N5 billion in additional equity
The Board of Neimeth is set to raise N5 billion additional equity upon the approval by shareholders of the company at the AGM.
The disclosure is part of the resolutions reached at the Board of Directors meeting of 15th January 2021. At the end of the meeting, it was resolved that the company would raise additional equity to the tune of N5 billion.
In line with this development, a board resolution proposing to raise equity will be presented at the Annual General Meeting of the Company scheduled to hold on 9th March 2021.
What you should know
- The Board of the Company is yet to disclose if the additional equity would be a rights issue or a private placement, as the details of the additional N5 billion equity set to be raised are yet to be finalized.
- The fund will help the company’s management to execute key strategies that will reposition the company as a leader in the healthcare industry, with the hope to deliver better returns on investment to shareholders.
- The additional equity financing will also increase Neimeth’s outstanding shares, which will dilute earnings and impact the Company’s stock value for existing shareholders.
- The move has the potential to trigger a sell-off of the company shares on the Nigerian Stock Exchange.
Cutix Plc forecasts N148 million profit in Q4 2021
Cutix Plc has projected that its revenue will double and profit will increase by 9% to N148 million.
Cutix Plc has projected that in the fourth quarter of its financial year 2021, its revenue will double and profit will increase by 9% to N148 million.
These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Company’s CEO and CFO.
Key highlights of the earnings forecast for Q4 ended April 30, 2021
- Revenue to increase to N1.66billion, 100% Q-o-Q.
- Cost of Sales to increase to N1.16 billion, 70% Q-o-Q.
- Distribution, Admin & Other expenses to increase to N232.89 million, 14%% Q-o-Q.
- Other Income to remain unchanged at N2.50 million,
- Finance Charges to increase slightly to N47.38 million, 3% Q-o-Q.
- Operating income to increase to N227.83 million, 14% Q-o-Q.
- Taxation is projected at N79.74 million.
- While Profit attributable shareholders is projected at N148.10 million.
The earnings forecast was made on the ground that the Nigerian economy will continue improve, as the country recovers from the impact of COVID-19. In this regard, revenue in the fourth quarter of 2021 will be slightly higher than the revenue projected in the third quarter of 2021.
However, the increase in the cost of sales driven by the input cost will pressure profitability to the tune of N148.10 million, which is 9% higher than the profit after tax made in the corresponding quarter of 2020.
PZ Cussons proposes dividend payout of N397 million to the shareholders
The Board of Directors of PZ Cussons Nigeria Plc has proposed the payment of N397 million to the shareholders of the company.
The Board of Directors of PZ Cussons Nigeria Plc has proposed the payment of N397.047 million to the shareholders of the company who currently hold the 3,970,477,045 fully paid ordinary shares of the company.
This disclosure was made public by the company in a notification issued and signed by the Company Secretary, Jacqueline Ezeokwelume, today the 7 January 2021.
She explained further that if the dividend of ten (10) Kobo per share recommended by Directors is approved by members at the Annual 72nd General Meeting, the dividend payments will be made on Monday, 1 February 2021.
What you should know
- The Register of Members and Transfer Books of the Company will be closed from Monday, 11 January 2021 to Friday, 15 January 2021 (both dates inclusive) for the purpose of preparing an up-to-date Register of Members.
- However, only shareholders whose names appear in the Register of Members and Transfer Books at the close of business on 19th October 2020 will receive the dividend on Monday, 1 February 2021.
What they are saying
Mr. Gbenga Oyebode, MFR, the Chairman of PZ Cussons Nigeria Plc, in his address said:
- “Fellow shareholders, the Board of Directors is recommending to the shareholders at this AGM, a dividend pay-out of N397,047,700 representing 10 Kobo per share (2019: 15 Kobo per share). If approved, the dividend will be paid to shareholders on Monday, 1 February 2021 after deducting the appropriate withholding tax.”