Welcome to Corporate News roundup for the week ended November 3rd, 2018. Corporate News roundup is a weekly roundup of corporate news and action that took place the previous.
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An interesting piece of good news was revealed over the weekend. The FG has now listed E-Commerce Services, Book Publishing, Software Development and Publishing, Motion Picture, Video and TV Programming Production and Distribution, and Music Production, Publishing and Distribution to its list of industries eligible for Pioneer Status.
According to an excerpt of the gazette cited, those in these industries can get up to 3 years of Pioneer Status, meaning they don’t get to pay tax on products that fall under this. For E-commerce companies, the products are “E-commerce services with sales done predominantly or exclusively online.” Thus, if you run an online and offline merchant sales business, you only get pioneer status for the online bit.
This means that those who sell merchandize on Instagram can apply for pioneer status. Also, for software developers, the products are “operating systems, software applications and computer games.
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”To be considered, you will have to apply in the first year of production/service and must apply for an extension no later than one month after the expiration of the initial tax relief period of three years, or an extension of one year.
”This means you can’t apply for Pioneer Status for a product that has already been sold for over a year. You are also expected to have “a non-current tangible asset of over one hundred million Naira (N100 million).”
This suggests that your company has to be worth more than this. To apply, make sure you have a SWOT, Project Overview, Financial Projection, etc.
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Despite the recent regulatory headwinds faced by MTN in recent months, the telecoms giant reported strings of strong performances from Nigeria. In its third quarter results, MTN reported a 1.1% rise in its user base to 225.4 million, adding 2.5 million subscribers.
MTN Nigeria has a subscriber base of 56 million, the single highest of any country. MTN Nigeria also had an excellent quarter, increasing service revenue by 17.4% year on year, towards the upper end of its medium-term target for Nigeria of double-digit growth.
This growth was led by a 52.5% increase in data revenue and a 21.5% increase in outgoing voice revenue. MTN Nigeria reported 17.2 million active data subscribers, up 15.1% quarter on quarter, and 2.5 million Mobile Money customers, up 12.4% quarter on quarter.
MTN also reported an incredible EBITDA margin of 43.2% in the first 9 months of 2018, up from 4.7% a year earlier. ARPU in Nigeria stands at $4.12 compared to SA at $7.06.
The only negative headwinds in its Nigerian operations is the fact that digital revenues from VAS are declining and likely to continue to decline. It fell by 28.5% this quarter, as MTN stopped automatic renewal subscriptions of VAS (text messaging ads).
If you are in this space, then you have effectively been placed on notice. MTN also reported that the surge in data revenue was supported by an increase in active data subscribers, as well as more smartphones on its network. They should go and thank the influx of cheap smartphones. Read more
Dangote Flour mills claimed during the week that it has broken the Guinness Book of Records for the World’s Largest Puff-Puff pyramid. The flour miller had fried two metric tonnes of flour to celebrate the 2018 World Puff-Puff Day on Saturday, October 27, 2018.
Unfortunately, the last thing on the mind of investors in Dangote Flour Mills is not even puff-puff. The company released its 2018 nine months results showing that revenues dipped a massive 16.93% year on year, while profits dropped by 75%.
The company recorded a massive decline in flour business, dropping to N72b in 2018 versus N86b in 2017.
Its spaghetti and pasta business also recorded massive declines with revenue, going from N13b in 2017 to N10.8b in 2018.
Still, on Dangote Group, its sugar business, Dangote Sugar recorded revenues of N116.7b, down 28.3%. Profit was N16.7b, down 36.9% year on year for the first 9 months of the year.
The company also reported that refinery sales volume was down 13%. According to Dangote Sugar’s COO, Mr Ravindra Singh Singhvi, “Production and sales during the period under review were greatly impacted by logistic challenges caused by the Apapa traffic gridlock.
This constrained the number of trucks required on a daily basis to evacuate the production volumes. The influx of unlicensed sugar, smuggled into the markets nationwide continues to exert a downward pressure on selling prices.
The impact of smuggled sugar has taken up about 40% of the market, despite efforts being deployed by regulators to stem the tide.” So basically, the company’s performance has been largely affected by the Apapa traffic gridlock, smuggling and a crash in sugar prices.
No business wants to be in this kind of situation. He further reassured investors that they “are employing measures to mitigate the gridlock and the establishment of new markets to improve sales.”
On the Apapa road that Dangote Group and Flour Mills of Nigeria are constructing, the Group Managing Director of Flour Mills of Nigeria Plc, Paul Gbededo, told Nairametrics at the sidelines of the NESG two weeks back that the road would be completed by end of October.
However, he noted that “completing the road without fixing the bridge will still affect logistics in Apapa, so we are looking at the Federal Government completion of repairs on the Apapa bridge and that will ease the pressure on Apapa greatly. We are hopeful that by next year, things will better with logistics in that area.”