FBN Holdings Plc has declared a final dividend of 26 kobo per 50 kobo ordinary share for the financial period ended Monday, December 31, 2018.
Come Monday, May 6, 2019, the dividends will be paid to shareholders whose names appear on the Register of Members as at Monday, April 22, 2019. Also, only those who have completed the e-dividend registration and mandated the Registrar to pay their Payment Date dividends directly into their Bank accounts will receive payment
The Register of Shareholders will be closed from Tuesday, April 23, 2019, to Monday, April 29, 2019.
A dividend is a payment made by a company to its shareholders, usually as a distribution of profits. When a company earns a profit or surplus, it reinvests a portion of the profit in the business (retained earnings) whilst paying a portion as dividends to the shareholders.
Distribution to shareholders may be in cash (usually a deposit into a bank account) or the issuance of further shares, otherwise known as shares repurchase. But this is usually if the company has a dividend reinvestment plan.
In other words, a dividend is allocated as a fixed amount per share with shareholders receiving a dividend in proportion to their shareholding. For the joint-stock company, paying dividends is not an expense; rather, it is the division of after-tax profits among shareholders.
Laudable financial results?
FBN Holdings Plc reported 31.4% growth in profit after tax for the year ended December 31, 2018.
Although gross earnings dipped slightly by 2% from N595 billion in 2017 to N583 billion in 2018, Profit before tax rose from N54.5 billion in 2017 to N65.2 billion in 2018. This amounts to a 19.6% increase year on year.
On the other hand, Profit after tax (from continuing operations) rose from N45.4 billion in 2017 to N59.7 billion in 2018. This marks a 31.4% increase year on year.
FBN Holdings Plc, together with its subsidiaries, provides commercial banking, investment banking, corporate banking, insurance, and other financial services in Nigeria and internationally.
The company traded N7.25 on the floor of the Nigerian Stock Exchange (NSE).
Jumia confirms Covid-19 lockdowns did not help e-commerce revenues
Africa’s leading e-commerce firm Jumia released its second-quarter earnings on Wednesday showing it incurred a loss of Eur 37.6 million (N17.1 billion) in the second quarter of 2020 despite the rampaging effect of Covid-19.
According to Jumia, it did not experience any “meaningful change in consumer behavior” following the Covid-19 induced shutdown.
Contemporary views suggest e-commerce firms were one of the winners in the ensuing Covid-19 pandemic induced lockdown. However, the company reported significant challenges to its operations. Here is how Jumia responded;
- In Nigeria and South Africa, we faced significant disruption as a result of movement restriction.
- This disruption persisted during the early part of the second quarter of 2020, before gradually easing towards the later part of the quarter.
- Our food delivery business, Jumia Food, which was negatively impacted by restaurant shutdowns starting mid-March, resumed normal operations in late May / early June in most cities where we operate the service.
- Across the majority of our addressable market, we experienced no meaningful change in consumer behavior, aside from increased demand for essential and every-day products and reduced appetite for higher ticket size, discretionary purchases.
- The nature of lockdown measures put in place consisted mostly of localized restrictions of movement and partial curfews rather than nationwide lockdowns, with the former leading to less drastic changes in consumer lifestyles and behavior than all-encompassing, nationwide lockdowns.
What this means
Jumia’s revelations confirm fears that the Covid-19 lockdowns may not have positively impacted on the e-commerce sector whose business model requires that their gross merchandise volumes increase for them to improve margins.
However, by confirming that Nigerians focussed more on essentials, the negative impact of the Covid-19 appears to be more severe than even expected.
Nigerians are perhaps also cautious about their spending, avoiding expenditures that do not speak to their immediate need such as food supplies, medicare, and utilities.
Jumia reports N17.1 billion loss in Q2 as COVID-19 fail to boost revenue
Jumia reported a loss after tax of Eur 37.6 million (N17 billion) in the second quarter of 2020.
One of Africa’s leading e-commerce companies, Jumia reported a loss after tax of Eur 37.6 million (N17 billion) in the second quarter of 2020 despite the rampaging effect of COVID-19.
E-commerce firms were expected to be one of the major beneficiaries of COVID-19 pandemic as consumers gravitated to online orders to meet essential needs.
The losses were a much improvement from the Eur 66.7 million loss reported in the same period in 2019 as Jumia strives to dig itself out of massive loss hole. However, the losses wiped out Jumia’s revenue of Eur 34.9 million reported in the quarter under review.
On Customer Acquisition, Jumia reports it now has 6.8 million active customers as in the second quarter of 2020 up 40% when compared to the same quarter in 2019. Orders also reached 6.8 million up 8%, while GMV was €228.3 million, down 13% on a year-over-year basis.
Jumia explained the results as follows;
“We have made significant progress on our path to profitability in the second quarter of 2020, with Operating loss decreasing 44% year-over-year to €37.6 million. This was achieved thanks to an all-time high Gross Profit after Fulfillment expense of €6.0 million and record levels of marketing efficiency with Sales & Advertising expense decreasing by 51% year-over-year,” Jeremy Hodara and Sacha Poignonnec, Co-Chief Executive Officers of Jumia.
He continued, “We are navigating these uncertain times of COVID-19 pandemic with strong financial discipline and operational agility which positions us to emerge from this crisis stronger and even more relevant to our consumers, sellers, and communities.”
A cursory look at the results reveals Jumia reported revenue of Eur 34.9 million compared to Eur 38.8 million same period in 2019. Whilst Jumia reported significant revenue growth in key Platform revenue segments such as Commissions, Fulfillment, Marketing & Advertising it lost big in its First Party revenue. The First Party revenue are closed sales leads generated when customers directly visit an e-commerce website or call or contact them directly to make purchases.
Jumia reported that First Party revenue fell a whopping 49.1% YoY to Eur 11 million compared to Eur 21.6 million the same period in 2019. Despite the drop in revenues, Jumia experienced a growth in gross profit as a change in its business model helped reduce the direct cost of sales. In the quarter under review, gross profit rose 38.2% to Eur 23.3 million.
The company claims cost-cutting was driven by cost efficiency initiatives. For example, it explains that it “changed the volume pricing model from a price per successfully delivered package to a price per successful stop which led to a c. 8% reduction in cost per order for a given route. Our third party logistics partners are now paid per successful stop at customer address, regardless of the number of packages included in the delivery”.
It also claimed it adopted a mother-daughter warehouse system which brings warehouses stocked with “essential products” closer to customers helping reduce last-mile delivery cost.
Jumia’s Ebitda closed at Eur 32.9 million compared to Eur 44.4 million the same period last year representing a 25.9% drop in Ebitda losses. Jumia’s accumulated losses are now a staggering Eur 1.17 billion while its net assets are just Eur 108.4 million. Jumia’s loans total about Eur 10 billion.
Pay-as-you-view: Startimes, Multichoice in a tussle for the Nigerian market
Both companies had, at the end of H1 2020, announced a new price plan for its bouquets,
Before the mid-1990s in Nigeria, television entertainment was just about tuning in and watching any terrestrial channel you could reach, with whatever quality. But the launch of Multichoice’s DSTV in 1996 started a gradual change of the narrative.
While this service majorly served the need of the rich, the introduction of other PayTV options in the 2000s broke monopoly and allowed more Nigerians to benefit from this service.
Amid all the challenges which have plagued the entertainment industry in 2020, Nigerians recently started demanding a pay-as-you-use model which will allow them only pay for what they use, rather than paying a fixed rate for a package monthly irrespective of usage. The House of Representatives was at the forefront of this request.
READ ALSO: Chelsea FC posts N46.42 billion loss in 2019
MultiChoice refused to bend as it says that it does not have the capacity to operate PPV model, as it operates a prepaid pricing model across the 50 Sub-Saharan African countries where it operates.
While the South-African company was busy trying to explain how its model does not allow it to detect when a customer is enjoying the service or not, its competitor, StarTimes announced that it had already integrated a flexible subscription plan where customers do not have to pay for what they do not get.
The model, according to the PR Manager of StarTimes Nigeria, Lazarus Ibeabuchi, allows subscribers to choose daily, weekly, monthly or quarterly plans and enjoy all exciting content on their preferred package/bouquet valid for the period paid for.
Maybe this was not what Nigerians had in mind when they demanded the pay-as-you-go billing system, but it was a lot more than MultiChoice was offering in its DStv and GOtv bouquets. It still provided a viable alternative giving customers a feel of being in charge of what they pay, and what value they get in return.
With as little as N90 or 160 naira daily, subscribers can watch several exciting channels, both foreign and local entertainment channels.
Note that both companies had, at the end of H1 2020, announced a new price plan for its bouquets in response to the new Value Added Tax (VAT) rate of 7.5%.
In its public announcement, MultiChoice noted the company had absorbed the additional 2.5% tax for the first half of the year, in the hope that the federal government would revert to the old tax rate before the end of Q1 2020.
Even though this action attracted lots of criticisms, the company has insisted that it would not be able to continue absorbing the extra costs given the large market in Nigeria, as it was already telling on its finances.
Some of the critics of this action claimed that the company is exploiting Nigerians, making them pay more than they should, even when the epileptic power supply in the country does not allow customers to get maximum value for subscribed plans.
The sports bait
In July, MultiChoice Group announced a new partnership with Walt Disney Company Africa, a partnership that brought in two 24-hour ESPN channels to DStv customers in Africa allowing them to enjoy the very best of US sports.
Note that some years back, ESPN withdrew from broadcasting in Africa and Europe. This new deal means that only DStv customers on the continent will now be able to watch the channels.
MultiChoice was still basking in this euphoria when Startimes announced that it had acquired four-season transmission rights to the Spanish Laliga and the UEFA Nations League, to be broadcast from 2020/21 to 2024 season across sub-Saharan Africa.
Even before this latest acquisition, StarTimes was already making a statement in sports broadcasting. It had exclusive rights to the Europa League, Bundesliga, Coppa Italia and Copa Del Rey. The PayTV operator also airs the English Football League Championship (EFL), Major League Soccer (MLS), Belgian Pro League, Netherlands Eredivisie; and Basketball tourneys – NBA and The EuroLeague; Formula E, MMA and Major League Wrestling.
Children and family entertainment
Away from sports, the competitors have taken their game to the children and family entertainment space.
Just recently, StarTimes partnered with the NBCUniversal International Networks’ (NBCUIN) to bring the DreamWorks family entertainment channel on the StarTimes pay TV platform across sub-Saharan African.
According to Lily Meng, head of StarTimes’ media division, the addition of the channel with its range of animated TV series is a timely deal coming at a time when “most kids and parents are staying home.”
On a similar note, MultiChoice had announced moves to integrate Netflix and Amazon Prime Video services into its Explora decoder as part of an agreement. According to the statement, the agreement is a proof of its aggregator model which provides choice and convenience for customers.
“As our industry evolves, we believe that we are well-positioned to benefit from both worlds – a large, growing pay-TV market in Africa, as well as an emerging over-the-top opportunity, where our own OTT services and aggregation capabilities can drive success,” CEO Calvo Mawela stated.
The company also said that it has commenced field trials for its own DStv streaming products, to be launched later in the year. This will be added to the streaming offering currently offered on Explora, the Showmax.
Observers opine that MultiChoice recent decisions are part of a larger strategy to remain the leading pay-TV channel and content aggregators.
The heated competition continues across all channels, especially on social media where both operators try to actively engage their customers with trailers and snippets from their content. During the Sallah celebration, StarTimes sent gift packages to some randomly selected customers as contributions to a bountiful celebration.
There is also the ongoing promo where StarTimes customers stand a chance to win smartphones, bulbs and other gifts, when they do two-months subscription.
I want to express my profound gratitude to @StarTimes_Ng for sending me this flat screen digital LED TV today after buying their decoder few weeks ago. The beauty about Startimes is that I can pay daily and weekly, and it is very affordable. This TV has an inbuilt decoder too 💃🏽 pic.twitter.com/Zg9tDbAe0i
— ᴏᴍᴀsᴏʀᴏ ᴀʟɪ ᴏᴠɪᴇ™☤🇸🇴 (@OvieSheikh) August 4, 2020
This is clearly a competition that is not ending anytime soon, but interestingly, it would appear that the customers are the final beneficiaries of the tussle as each PayTV operator tries to outdo the other.