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Company Profile: How Afromedia Plc became a shadow of itself

Outdoor advertising companies such as Afromedia Plc typically charge millions of naira just display products on billboards across Nigeria.



Afromedia Plc
As is the case in different parts of the world, billboard advertising has for long been an integral aspect of the marketing process in Nigeria. Driving along the Third Mainland Bridge in Lagos for instance, an imposing, gigantic billboard greets you. This electronic billboard is so big such that it extends from one end of the 10km bridge to the other, facing commuters descending the Oworonshoki end of the popular bridge. The colourful displays of ads on the billboard and many others like it come at a cost, with companies paying between N15 million and 120 million per annum just to display brands. These millions of naira typically go into the coffers of outdoor advertising companies such as Afromedia Plc.
Lately, Afromedia Plc hasn’t been getting as much of those advertising revenues as it used to. Instead, the company which used to be the leading outdoor advertising firms in Nigeria, has recently been struggling to maintain the glory of its former days. This, therefore, begs the question as to what factors could be responsible for the slowed growth.  Can the company ever overcome its current challenges?
For this week’s Nairametrics‘ company focus, we will closely examine these important questions and more. As is the tradition on this column, we will also avail you of the opportunity to know more about this company, its business structure, history, ownership, troubles, financial performance, and prospects.

Corporate overview of Afromedia Plc

The Lagos-based media solutions provider was incorporated as a limited liability company on October 28th, 1959—approximately one year before Nigeria’s independence.  Prior to this time, the company was a part of West Africa Publicity, which was a subsidiary of United Africa Company Limited.
The company, which since 1959 has been fully engaged in outdoors advertising, received approval from Nigeria’s Corporate Affairs Commission to become a public company in 1972. This is the same year the the corporate entity was completely acquired by its new Nigerian owners. And then thirty seven (37) years later, the company was listed on the Nigerian Stock Exchange in 2009. Today, it has a market capitalisation of N2.2 billion and a share price of 50 kobo.

The company’s products and services  

Afromedia Plc currently offers the following services:
1. Roadside structure/billboards
2. Airport displays
3. Destination branding
4. Customer support
5. Press releases, etc.

A look at the company’s target market 

As one of Nigeria’s foremost media solutions providers, specifically in the outdoor advertising space,  Afromedia Plc targets companies which are ever in constant need to create awareness for their products and services. Such companies range from consumer goods manufacturers like Nestle Nigeria Plc, to industrial goods makers like Dangote Cement Plc. They also offer services to individuals like politicians, as well as other PR firms.

Afromedia’s board of directors  

Just last week, the company announced a change in the composition of its board of directors with the appointment of Mr Femi Olaiya as the new Group Chief Executive Officer. Mr Olaiya took over from Mr Akinlola Ojewunmi Olapade.
Prior to his current appointment, he was the company’s Deputy Managing Director. He has also served as an associate director of sales and marketing, as well as Chief Operating fficer.
Other members of the company’s board of directors are:
1. Ibrahim Isiayaku who is the Chairman,
2. Mrs Agatha Okpagu, Direction and
3. Mrs Osen Odeyemi, the Executive Director in charge of the company’s shared services.

The company’s competition  

Although Afromedia undoubtedly pioneered the outdoor advertising service industry in Nigeria, other operators in the sub sector have emerged over the years. As a matter of fact, there are about 120 registered outdoors advertising firms across Nigeria. As expected, the emergence of the competitors went a long way in threatening Afromedia’s dominance in the space.  Examples of some of the popular outdoors advertisers in Nigeria include:
  • Kontactpoint Limited
  • Invent Medusa
  • Displayhub Concepts Limited
  • Promoworld Limited
  • SINAT Advertising, etc.

How digital advertising poses a threat 

Meanwhile, another major source of competition for the company (asides the newspaper, magazine, radio and TV)  are online advertisements. Much like every other aspect of our lives, the digital disruption also occurred in the advertising industry, with more and more companies continually choosing to diversify their advertising portfolios.
Recently, Nairametrics sat down with the company’s Head of Sales and Marketing, Mr Adesina Oluwole, and asked him how the new source of competition is affecting their business operations.  In response, he said digital advertising is not really a threat to Afromedia Plc. According to him, no right-thinking company would completely do away with outdoor advertising, seeing as it is one of the most effective ways to reach customers by the millions.
He, however, admitted that outdoor advertising can be quite expensive, which may be why some companies are shifting to digital advertising, thereby leaving some  billboards empty. He also cited the unfavourable business environment, specifically the recent economic recession, as the reason why many companies are choosing “cheaper” means of advertising.
“I will not agree with you that digital advertising is threatening to put us out of business. But I wouldn’t say it is not a serious competition, because it is. Yet, outdoor advertising is indispensable. No company that wants to maximise profit would ever want to do away with traditional advertising, particularly outdoor advertising such as billboards.” -Oluwole.

Meanwhile, the company is struggling  

It is no secret that Afromedia Plc has been struggling to maintain profitability for a while now. The difficult time experienced by the company is reflective in its recently released management report for the 2017 financial period. According to the report, the company made a turnover of N436.7 million and a loss after tax of N609 million. The result is no better than the preceding 2016 financial report which shows a turnover of N494 million and a loss after tax of N1.7 billion.
Afromedia Plc has also been having corporate governance issues, with the Nigerian Stock Exchange penalising it several times for failure to release its financial reports as at when due.

In conclusion…

Whether or not Afromedia’s difficult time is causes by growing competition or even political factors as some are wont to imply, one thing both investors and management are interested in is how to revive it.
And it appears the company is making some efforts to this effect. According to Mr Oluwole, Afromedia is deploying new means of survival, even though none of these involve online advertising. Instead, the company is focusing more on other types of outdoor-related adverting, including bus branding, airport advertising, gantries, etc.
We would be watching to see if this new path would help it shore up profits.


Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]



  1. Ayoola

    December 11, 2018 at 7:17 am

    No right thinking company will completely ignore outdoor advertising…. Shows a company that still lives in its past glory. With special targeted ads,digital marketing, and a growing online audience, the days of likes of Afromedia who refuse to go digital are just around the corner.

    • Anonymous

      April 17, 2019 at 11:44 pm

      I beg to differ. No matter the level of digital invasion in years to come. This fact remains, people will always be on the go. That can’t escape seeing billboard signs.

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Why Insurance firms are selling off their PFAs

It has not been uncommon over the years to have insurance companies with pension subsidiaries.



Why Insurance firms are selling off their PFAs

The idea of mitigating risks and curtailing losses at the bare minimum begins from the insurance industry and only crosses into the pension space with the need for retirement planning. For this reason, it has not been uncommon over the years to have insurance companies with pension subsidiaries. However, controlling the wealth of people is no easy feat – and crossover companies are beginning to think it might not be worth it competing with the big guns; that is, the pension fund administrators (PFAs) that already cater to the majority of Nigerians.

A few months ago, AXA Mansard Insurance Plc announced that its shareholders have approved the company’s plan to sell its pension management subsidiary, AXA Mansard Pensions Ltd, as well as a few undisclosed real estate investments. It did not provide any reason for the divestment. More recently, AIICO Insurance Plc also let go of majority ownership in its pension arm, AIICO Pension Managers Ltd. FCMB Pensions Ltd announced its plans to acquire 70% stakes in the pension company, while also acquiring an additional 26% stake held by other shareholders, ultimately bringing the proposed acquisition to a 96% stake in AIICO Pension. The reason for the sell-off by AIICO does not also appear to be attributed to poor performance as the group’s profit in 2019 had soared by 88% driven by growth across all lines of business within the group.


 So why are they selling them off? 

Pension Fund Administration is, no doubt, a competitive landscape. Asides the wealth of the over N10 trillion industry, there is also the overarching advantage that pension contributors do not change PFAs regularly. Therefore, making it hard to compete against the big names and industry leaders that have been in the game for decades – the kinds of Stanbic IBTC, ARM, Premium Pension, Sigma, and FCMB. Of course, the fact that PFAs also make their money through fees means the bigger the size, the more money you make. With pressure to capitalize mounting, insurance firms will most likely spin off as they just don’t have the right focus, skills, and talents to compete.

The recent occurrence of PENCOM giving contributors the opportunity to switch from one PFA to another might have seemed like the perfect opportunity for the smaller pension companies to increase their market shares by offering better returns. More so, with the introduction of more aggrieved portfolios in the multi-fund structure comprising of RSA funds 1, 2, & 3, PFAs can invest in riskier securities and enhance their returns. However, the reality of things is that the smaller PFAs don’t have what it takes to effectively market to that effect. With the gains being made from the sector not particularly extraordinary, it is easier for them to employ their available resources into expanding their core business. There is also the fact that their focus now rests on meeting the new capital requirements laced by NAICOM. Like Monopoly, the next smart move is to sell underperforming assets just to keep their head above water.

READ MORE: AIICO seeks NSE’s approval for conducting Rights Issue

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Olasiji Omotayo, Head of Risk in a leading pension fund administrator, explained that “Most insurance businesses selling their pension subsidiaries may be doing so to raise funds. Recapitalization is a major challenge now for the insurance sector and the Nigerian Capital Market may not welcome any public offer at the moment. Consequently, selling their pension business may be their lifeline at the moment. Also, some may be selling for strategic reasons as it’s a business of scale. You have a lot of fixed costs due to regulatory requirements and you need a good size to be profitable. If you can’t scale up, you can also sell if you get a good offer.”

What the future holds

With the smaller PFAs spinning off, the Pension industry is about to witness the birth of an oligopoly like the Tier 1 players in the Banking sector. Interestingly, the same will also happen with Insurance. The only real issue is that we will now have limited choices. In truth, we don’t necessarily need many of them as long all firms remain competitive. But there is the risk that the companies just get comfortable with their population growth-induced expansion while simply focusing on low-yielding investments. The existence of the pandemic as well as the really low rates in the fixed-income market is, however, expected to propel companies to seek out creative ways to at least keep up with the constantly rising rate of inflation.


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Nigerian Banks expected to write off 12% of its loans in 2020 

The Nigerian banking system has been through two major asset quality crisis.



Nigerian Banks expected to write off 12% of its loans in 2020 

The Nigerian Banking Sector has witnessed a number of asset management challenges owing largely to macroeconomic shocks and, sometimes, its operational inefficiencies in how loans are disbursedRising default rates over time have led to periodic spikes in the non-performing loans (NPLs) of these institutions and it is in an attempt to curtail these challenges that changes have been made in the acceptable Loan to Deposit (LDR) ratios, amongst others, by the apex regulatory body, CBN. 

Projections by EFG Hermes in a recent research report reveal that as a result of the current economic challenges as well as what it calls “CBN’s erratic and unorthodox policies over the past five years,” banks are expected to write off around 12.3% of their loan books in constant currency terms between 2020 and 2022the highest of all the previous NPL crisis faced by financial institutions within the nation.  


Note that Access Bank, FBN Holdings, Guaranty Trust Bank, Stanbic IBTC, United Bank for Africa and Zenith Bank were used to form the universe of Nigerian banks by EFG Hermes.  

READ MORE: What banks might do to avoid getting crushed by Oil & Gas Loans


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Over the past twelve years, the Nigerian banking system has been through two major asset quality crisisThe first is the 2009 to 2012 margin loan crisis and the other is the 2014 to 2018 oil price crash crisis 

The 2008-2012 margin loan crisis was born out of the lending institutions giving out cheap and readily-available credit for investments, focusing on probable compensation incentives over prudent credit underwriting strategies and stern risk management systems. The result had been a spike in NPL ratio from 6.3% in 2008 to 27.6% in 2009. The same crash in NPL ratio was witnessed in 2014 as well as a result of the oil price crash of the period which had crashed the Naira and sent investors packing. The oil price crash had resulted in the NPL ratio spiking from 2.3% in 2014 to 14.0% in 2016.  

Using its universe of banks, the NPL ratio spiked from an average of 6.1% in 2008 to 10.8% in 2009 and from 2.6% in 2014 to 9.1% in 2016. During both cycles, EFG Hermes estimated that the banks wrote-off between 10-12% of their loan book in constant currency terms.  

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 READ MORE: Ratings firm explains why bank non-performing loans could be worse than expected

The current situation 

Given the potential macro-economic shock with real GDP expected to contract by 4%, the Naira-Dollar exchange rate expected to devalue to a range of 420-450, oil export revenue expected to drop by as much as 50% in 2020 and the weak balance sheet positions of the regulator and AMCON, the risk of another significant NPL cycle is high. In order to effectively assess the impact of these on financial institutions, EFG Hermes modelled three different asset-quality scenarios for the banks all of which have their different implications for banks’ capital adequacy, growth rates and profitability.  These cases are the base case, lower case, and upper case. 


Base Case: The company’s base case scenario, which they assigned a 55% probability, the average NPL ratio and cost of risk was projected to increase from an average of 6.4% and 1.0% in 2019 to 7.6% and 5.3% in 2020 and 6.4% and 4.7% in 20201, before declining to 4.9% and 1.0% in 2024, respectively. Based on its assumptions, they expect banks to write-off around 12.3% of their loan books in constant currency terms between 2020 and 2022a rate that is marginally higher than the average of 11.3% written-off during the previous two NPL cycles. Under this scenario, estimated ROE is expected to plunge from an average of 21.8% in 2019 to 7.9% in 2020 and 7.7% in 2021 before recovering to 18.1% in 2024.  

Lower or Pessimistic Case: In its pessimistic scenario which has a 40% chance of occurrencethe company projects that the average NPL ratio will rise from 6.4% in 2019 to 11.8% in 2020 and 10.0% in 2021 before moderating to 4.9% by 2024It also estimates that the average cost of risk for its banks will peak at 10% in 2020 and 2021, fall to 5.0% in 2022, before moderating from 2023 onwards. Under this scenario, banks are expected to write off around as much as 26.6% of their loan books in constant currency terms over the next three years. Average ROE of the banks here is expected to drop to -8.8% in 2020, -21.4% in 2021 and -2.9% in 2022, before increasing to 19.7% in 2024.   

Upper or optimistic case: In a situation where the pandemic ebbs away and macro-economic activity rebounds quicklythe optimistic or upper case will hold. This, however, has just a 5% chance of occurrence. In this scenario, the company assumes that the average NPL ratio of the banks would increase from 6.4% in 2019 to 6.8% in 2020 and moderate to 4.8% by 2024Average cost of risk will also spike to 4.2% in 2020 before easing to 2.4% in 2021 and average 0.9% thereafter through the rest of our forecast period. Finally, average ROE will drop to 11.6% in 2020 before recovering to 14.4% in 2021 and 19.0% in 2024. 

With the highest probabilities ascribed to both the base case and the pessimistic scenario, the company has gone ahead to downgrade the rating of the entire sector to ‘Neutral’ with a probability-weighted average ROE (market cap-weighted) of 13.7% 2020 and 2024. The implication of the reduced earnings and the new losses from written-off loans could impact the short to medium term growth or value of banking stocks. However, in the long term, the sector will revert to the norm as they always do.   

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Even with a 939% jump in H1 Profit, Neimeth still needs to build consistency

Neimeth has been one of the better performers in the stock market in the last one year. 



Even with a 939% jump in H1 profit, Neimeth still needs to build consistency 

Neimeth’s profit after tax for H1 2020 might have jumped by 939% from H1 2019, but there’s still so much the company needs to do to remain in the game. 

For the first time in years, Pharmaceutical companies across the globe are in the spotlight for a good reason.  As the COVID-19 pandemic rages on, the world waits patiently for this industry to produce a vaccine that can once again lead us back to the lives we all missed. Nigeria is also not an exception, it seems. One of Nigeria’s oldest pharmaceutical companies, Neimeth, has been one of the better performers in the stock market in the last one year. However, there is still so much the company needs to do to earn profits consistently. 


READ MORE: Covid-19: List of pharmaceutical firms that will receive grants from the CBN

Neimeth’s recently released H1 2020 results show a jump of 19.4% in revenue from 976 million earned in H1 2019 to 1.165 billion in H1 2020. While this is impressive, its comparative Q2 results (Jan-March ‘ 20) show a drop in revenue of 25.4% from 748.8 million earned in Q2 2019, to the 568.7 million revenue in Q2 2020. In similar vein, while its profit-after-tax soared by 939% from 5.447 million in H1 2019 to 56.596 million in H1 2020, its quarter-by-quarter results show a drop of 118%. While there is a truth that some months are better performers than others, Neimeth’s extreme profit jump in the half-year results juxtaposed with the more-than-100% drop in the first quarter of this year, reveal wide-gap volatility in its earning potential. Its revenue breakdown attributes the quarter-by-quarter drop in revenue to a comparative drop in its ‘Animal Health’ product line by a whopping 897.42%. The ‘Pharmaceuticals’ line also only experienced a marginal jump of 2.57%. 

Full report here. 

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READ MORE: Nigeria records debt service to revenue ratio of 99% in first quarter of 2020.

Current & Post-Covid-19 Opportunities  

A 2017 PWC report had revealed that by 2020 the pharmaceutical market is expected to “more than double to $1.3 trillion. Mckinsey had also predicted that come 2026, Nigeria’s pharma market could reach $4 billion. The positive outlook of the industry is even more so, following the disclosure by the CBN to support critical sectors of the economy with 1.1 trillion intervention fund.  

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The CBN governor, Godwin Emefiele, had stated that about 1trillion of the fund would be used to support the local manufacturing sector while also boosting import substitution while the balance of 100 billion would be used to support the health authorities towards ensuring that laboratories, researchers and innovators are provided with the resources required to patent and produce vaccines and test kits in Nigeria. 

READ MORE: Airtel to acquire additional spectrum for $70 million 

While manufacturing a vaccine for the Covid-19 pandemic might be nothing short of wishful, the pandemic presents a global challenge that businesses in the healthcare industry could leverage. Through strategic R&D, it could uncover a range of solutions, particularly those that involve the infusion of locally-sourced raw materials.  


In order for the company to attain sustainable growth, it needs to come up with structures and systems that are dependable, while also tightening loose ends. One of such loose ends is its exposure to credit risk. It’s Q2 2020 reports reveal value for lost trade receivables of N693.6 million carried forward from 2019. To this end, it notes that while its operations expose it to a number of financial risks, it has put in place a risk management programme to protect the company against the potential adverse effects of these financial risks. 

At the company’s last annual general meeting (AGM), the managing director, Matthew Azoji, had also spoken on the company’s efforts to gain a larger market share through its initiation of bold and gradual expansion strategies.  

The total revenue growth and profitability of the half-year period undoubtedly signals a potential in the company. However, we might have to wait for the company’s strategies to crystalize and attain a level of consistency for an extended period before reassessing the long-term lucrativeness of its stock or otherwise. That said, it certainly should be on your watchlist.  

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