Vitafoam Nigeria Plc‘s share price attained a 3-year high on Wednesday, thanks to the significantly-positive half-year 2019 results posted by the mattress-maker.
The result, alongside future growth potentials, attracted investors to the company’s stock which gained 9.82% after trading 848,540 units of shares and closing at N4.25.
Performance Details Explained: The gain implies that Vitafoam shareholders had their stake increase by N725 million year-to-date to a market capitalisation of N5.316 billion.
The demand for Vitafoam‘s shares further pushed up the NSE All Share Index, which has been performing positively in recent days, thanks to the bullish run of newly-listed MTN Nigeria Communications Plc.
But the stock’s rise seems to have only been temporary because as of Thursday, May 23rd, Vitafoam traded only 264,460 units of shares. The share price, however, remains N4.25.
Vitafoam’s Half-Year 2019 Results: The result reveals that Profit After Tax leaped by 150% to N774.7 million, up from N309.7 million recorded in HY 2018.
Income from the company’s local market, during the period, rose by 21% to N12.66 billion from N10.50 billion in 2018. Similarly, revenue from the market outside Nigeria surged by 29% to N272.6 million from N210.9 recorded in 2018. This represents a 20.7% rise in overall revenue for the period under review.
Increase in other income recorded by about 129% to N151.7 million further impacted the company’s profit. This comprised gains from asset sales, investment, sales of scrap, rentals unclaimed dividends and exchange gains.
The shareholders should be impressed: For the company’s shareholders, the result is rather commendable when compared to previous performances. It should be noted that the company had been made consecutive losses in the past three years. It posted losses after tax of N71.9 million, N32 million, and N127 million in 2015, 2016 and 2017 respectively.
Nevertheless, the performance for the 9 months ended June 2018 placed the company on the path of recovery. Its PAT stood at N515 million in 2018 compared to N133 million in 2017, which reflected in the current result.
Company’s Expansion Plans: Vitafoam had introduced eight new products into the market at the beginning of 2019. The new products would help enlarge the firm’s revenue base enhance customer’s healthy living and boost shareholder value, management said.
Vita Pearl, one of the latest offering, is a pillow that regulates temperature and moisturises the body. Others include assorted customised beds, sofas, Trifold mat for leisure, reading chairs, three specialised mattresses including orthopedic and classic and various polyurethane sandwich panel steels.
Vitafoam has committed more fund to advertising in a move to attract more customers. Advertising spending rose by 86% from N64.6 million in half-year 2018 to N121.2 million in half year 2019.
Yet, it should be noted that competition remains stiff. Therefore, the company should be on its toes if it intends to ensure continued growth.
NNPC says local operators must improve capacity to achieve low cost of oil production
The NNPC has mandated local oil companies to improve capacity to so as to reduce oil production cost.
The Nigerian National Petroleum Corporation (NNPC) has said that indigenous companies operating in Nigeria’s oil and gas sector must upscale their capacity for global competitiveness in order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis.
This was disclosed by the Group Managing Director of NNPC, Mallam Mele Kyari, at a virtual stakeholder’s consultative summit which was organized by the Senate Committee on Local Content.
According to a press release by NNPC, which was signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, the NNPC GMD said that there was need to amend the Local Content Act to reflect current realities in the industry.
Kyari, who was represented by the Group General Manager, Corporate Planning & Strategy (CP&S), Mrs Eyesan Oritsemeyiwa, argued that there was a need to have a legislation to resolve the issues of funding challenges faced by local players, stressing that oil and gas business required high technical skills and competence to compete favourably at the global stage.
Speaking further on the need for greater capacity building on the part of indigenous companies, the GMD said the nation’s education system has a great role to play in the development of highly skilled technical manpower, adding that any legislation on Nigerian content development that fails to embrace issues of investment in the educational system was not likely to achieve much.
He said, “In terms of the interaction between industry and education, we think these new bills would present a good model that we should work with. People are the greatest assets of any nation. If you have the best brains in the industry today, as long as you are not getting a good replacement for them from the educational sector when they grow old and retire, then your industry will collapse,”
The NNPC boss pointed out that the nation has made some good progress from the era when there was no single indigenous operator in the oil and gas industry to the current situation where local operators have risen to double digits, stressing that the trend should be encouraged.
He praised the National Assembly’s initiative to review and amend the Local Content Act and urged the committee to ensure that it is carried out in a timely fashion in order for the law to deliver maximum value for the nation.
The GMD commended the legislators for the plan to extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy, stressing that it would open up the non-oil sectors to growth and development.
The local content initiative has been identified as being very critical to the development of Nigeria’s oil and gas sector as the Federal Government plans to reduce the cost of production of crude oil to $10 per barrel in the face of the recent crash in crude oil prices.
The Federal Government has provided the sum of $350 million as the Nigerian Content Intervention Fund to help support local participation in the oil and gas sector.
Local Content: @NNPCgroup Advocates Capacity Upgrade for Indigenous Operators
In order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis, @NNPCgroup says indigenous companies operating in the…
— NNPC Group (@NNPCgroup) September 26, 2020
NNPC signs gas development and commercialization deal with SEEPCO
NNPC and SEEPCO have signed a gas development and commercialization deal.
The state oil giant, Nigerian National Petroleum Corporation (NNPC) has signed a gas development deal with Sterling Exploration and Energy Production Company (SEEPCO).
The agreement between the 2 oil firm is for the development and commercialization of gas from Oil Mining Lease (OML) 143 that could help reduce gas flaring in the country.
The disclosure was contained in a press statement that was issued by the Group General Manager, Group Public Affairs Division of NNPC, Dr Kennie Obateru, on Saturday, September 26, 2020, in Abuja.
According to the statement, the Group Managing Director of NNPC, Malam Mele Kyari, while speaking at the agreement-signing ceremony which held at the NNPC Towers, described the execution of the deal as a great milestone as well as a testament to NNPC’s commitment to facilitating the nation’s transformation into a gas-powered economy.
Kyari disclosed that the deal would not only help reduce gas flaring and its environmental hazards but would also promote gas production and utilization in the domestic market.
The NNPC boss also commended SEEPCO for its unwavering commitment to gas development and commercialization in the country which has led to the establishment of a Special Purpose Vehicle that will help expand gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.
On his part, the Chairman of SEEPCO, Mr Tony Chukwueke, described the deal as an essential partnership that would help the company fulfil the pledge it made to support the efforts of the Nigerian government to eliminate gas flaring by monetizing it.
He commended NNPC and the Group Managing Director for ensuring the execution of the agreement which he described central to the achievement of the company’s cardinal objective of boosting the production of Liquefied Petroleum Gas (LPG), condensate and dry gas for the Nigerian market, adding that the company has invested about $600 million for that purpose.
This is coming at a time when the Federal Government is shifting focus to gas utilization as an alternative source of energy especially with the increase in the retail pump price of petrol. This is one of the various initiatives by the government as represented by the NNPC towards providing alternative sources of energy.
Buhari reappoints 3 Chief Executives of agencies under Federal Ministry of Petroleum
3 Chief Executive Officers of agencies under the Federal Ministry of Petroleum Resources have been reappointed.
President Muhammadu Buhari has renewed the appointment of 3 Chief Executive Officers of parastatals under the Federal Ministry of Petroleum Resources with immediate effect.
The appointments that were renewed by the president include that of Dr Bello Aliyu Gusau as the Executive Secretary of Petroleum Technology Development Fund (PTDF), Ahmed Bobboi as the Executive Secretary/Chief Executive Officer of Petroleum Equalization Fund (PEF) and Simbi Wabote as Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB).
The disclosure was made through a series of tweet posts by the presidency on its official Twitter handle on Friday, September 25, 2020.
The statement disclosed that the renewal of the appointments followed recommendations to the President by the Minister of State Petroleum Resources, Timipre Syla.
It stated that Dr Aliyu Gusau was credited to have run the PTDF successfully in the past four years, keeping faith with the Seven Strategic Priorities he had introduced in January 2017.
These are Domestication, Cost cutting, Sustainable funding, Efficient internal processes, Linkages with the industry, Utilization of centres of excellence, and Pursuit of home-grown research.
It also stated that Bobboi got his reappointment for having run PEF in a way that made it a key and strategic player in the administration’s oil and gas reforms, especially in stabilizing the supply and distribution of petroleum products across the country, among others.
Going further, it stated that the NCDMB boss, Wabote, won his pips for managing the NCDMB and completing its headquarters building. Wabote was also credited to have initiated many landmark projects that were widely commended by industry players.
STATE HOUSE PRESS RELEASE
PRESIDENT BUHARI RENEWS APPOINTMENTS OF PTDF, PEF, NCDMB BOSSES
President @MBuhari has renewed the appointments of Chief Executive Officers of agencies under the Ministry of Petroleum Resources.
— Presidency Nigeria (@NGRPresident) September 25, 2020