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Focus on Aluminium Extrusion Industries Plc and its declining 2019 performance

For Aluminium Extrusion Industries Plc, the only aluminium manufacturer currently listed on NSE, 2019 has not been such a good year.

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Focus on Aluminium Extrusion Industries Plc and its declining 2019 performance

For Aluminium Extrusion Industries Plc, which happens to be the only aluminium manufacturer currently listed on the Nigerian Stock Exchange, 2019 has not been such a good year. Although the company has not exactly recorded a loss thus far, its profits declined drastically, according to latest earnings report seen by Nairametrics. Based on this underperformance, it is not surprising that a lot of investors chose to ignore the stock.

On this week’s Nairametrics Company Profile, we take a closer look at Aluminium Extrusion Industries Plc. As always, we shall be focusing on the company’s business model, its target audience, and prospects. We shall also be examining some of the possible challenges (such as competition) which might be impacting negatively on the company’s growth.

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About Aluminium Extrusion Industries Plc

Incorporated on October 26th, 1982, the company specialises in the manufacturing and sales of extruded aluminium profiles. The company is located in the eastern Nigerian city of Owerri in Imo State. It is a subsidiary of Tower Aluminium Plc which, interestingly, is the largest aluminium manufacturing group in the country. In specific terms, Tower Aluminium owns 67.76% stake in the company.

Focus on Aluminium Extrusion Industries Plc and its declining 2019 performance

Aluminium Extrusion Industries Plc was listed on the Nigerian Stock Exchange on October 26, 1982. Information made available to the public indicates that the company’s share outstanding is 219,956,000. This, multiplied by the company’s share price of N8.10 gives a market capitalisation of N1.7 billion. Note that the share price has remained mostly unchanged throughout 2019.

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The company’s products

At the core of the company’s business operation in Nigeria is the production of extruded aluminium materials and roofing sheets, all of which are essential in the construction industry. The company says that it sources for raw materials mainly from scrap aluminium which are purchased from scavengers, then recycled/processed. This, therefore, shows that this company’s business model equally contributes towards saving the planet.

[READ MORE: Analysis: Zenith Bank, cheap and cheerful]

The target market for Aluminium Extrusion Industries Plc

As a major producer of extruded aluminium profiles in Nigeria, the company has a large target market, particularly in the building construction industry. For example, the company targets homeowners and estate developers/construction companies with its aluminium roofing sheets. Its extruded aluminum profiles are also widely used across the country for the construction of doors and windows.

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Focus on Aluminium Extrusion Industries Plc and its declining 2019 performance

The company’s competitors

As you may well know, there is hardly a company that operates without at least one competitor. This is the case with Aluminium Extrusion Industries Plc, whose main competitor is First Aluminium Nigeria Plc. Much like Aluminium Extrusion, First Aluminum (which delisted from the NSE in August), equally manufactures aluminium roofing sheets as well as other products. Other competitors may be considered to include the likes of Tower Building Products, Queens Aluminium Company Ltd, PGN Limited, etc. All of these companies are subsidiaries under Tower Aluminium Plc which equally functions as the parent company of Aluminium Extrusion Industries Plc.

Overview of the company’s board

Aluminium Extrusion Industries Plc has about 70 full-time employees on its payroll. Out of this number, seven individuals make up the board of directors. They include the following:

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  • Dr Pascal G. Dozie: Chairman
  • Mr Veeraraghavan Ganesh: Managing Director
  • Vivek Goel: Non-Executive Director
  • Dr. John Nwaiwu: Non-Executive Director
  • Mr. Ramesh Chandra Biswal: Non-Executive Director
  • Barr. Peter Mgbenwelu: Non-Executive Director
  • Dr Jinesh C Dugad: Non-Executive Director

Focus on Aluminium Extrusion Industries Plc and its declining 2019 performance

The company’s recent financial performance

According to the company’s latest earnings report for the nine months ended September 30th 2019, revenue grew by 3.2% to N2.1 billion, up from N2 billion during the comparable period last year. However, there were increases in cost of sales, administrative expenses, and income tax. Profit for the period was reported at N24.3 million as against N61.5 million during the first nine months of 2018, thereby marking a 60.4% decline.

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Patricia

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

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Business News

Access Bank Plc reports profit of N40.9 billion for Q1 2020

Access Bank Plc recorded a profit after tax of N40.9 billion in the first quarter period ended March 31st, 2020, according to the company’s latest earnings report which was released earlier this afternoon.

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Access Bank 

Access Bank Plc recorded a profit after tax of N40.9 billion in the first quarter period ended March 31st, 2020. This is according to the company’s financial statement for Q1 2020, which was released earlier this afternoon. Other key details about the company’s Q1 financial performance can be seen below.

Net Interest Income: Access Bank’s net interest income for the period under review stood at N72.2 billion. This indicates a 27% increase compared to N56.8 billion that was recorded in Q1 2019.

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Personnel and Operating Expenses: In Q1 2020, the tier-1 bank incurred a total cost of N19.6 billion in personnel expenses. This shows a 53.5% jump compared to N12.8 billion in Q1 2019. In the same vein, other operating expenses also jumped sharply to N63.5 billion, marking a 69.8% increase when compared to N37.4 in Q1 2019.

READ ALSO: Sterling Bank attempted to ‘scam’ its customers; but it’s a drill

Profit before tax & profit after tax: Access Bank’s profit before tax for Q1 2020 stood at N46.2 billion. This is 2.6% more than N45.1 billion reported in Q1 2019. On the other hand, profit after tax decreased slightly by 0.53% to N40.9, down from N41.1 billion.

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Note that Access Bank’s earnings per share (basic) for the period decreased to 121 kobo as against 139 kobo. Diluted earnings per share also decreased to 119 kobo in Q1 2020 as against 137 kobo in Q1 2019.

READ ALSO: World Bank says remittances to Nigeria, other LMICs will drop by 20% in 2020

You may download the full report right here.

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SumoBank rebrands to SumoTrust, introduces bank account numbers

An online savings platform, SumoBank has rebranded as it metamorphosed to SumoTrust to continue the race of digital savings App in Nigeria.

The firm, launched its operation as a digital savings and investment platform, has grown from 0 to serving about 4000 customers.

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SumoBank rebrands to SumoTrust, introduces bank account numbers

An online savings platform, SumoBank has rebranded as it metamorphosed to SumoTrust to continue the race of digital savings App in Nigeria.

The firm launched its operation as digital savings and investment platform, and has grown from 0 to serving about 4000 customers.

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The development was announced on the Sumobank blog on the 27th of December 2019 by the Chief Executive Officer, Igwe Chrisent.

[READ ALSO: Budget: FG completes only 31.7% of constituency projects(Opens in a new browser tab)]

“In 6 months, we have grown from 0 to serving almost 4000 customers and to serve you better; we decided to carry out a product-service survey which will help us to do more.

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“Based on the feedback we got from our ‘Esteemed users’ on our Product and service survey; we’re happy to announce that our vision just got bigger and we’ve set out to give you the very best of platform for Savings, Investment, learning and more.

“Because our vision got broader and clearer, it is important to know that having ‘Bank’ attached to our name will not serve the product updates which will be effected in the coming months/years, so we decided to pick a new name.”

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[READ MORE: Mr Biggs rebrands, launches new model restaurants across Nigeria)

Highlights of rebranding: The Change of name from SumoBank to SumoTrust also came with some updates on the SumoTrust savings App which include:

  • Addition of NUBAN ACCOUNT numbers which allow users to have their unique bank account numbers for transactions (deposits) in their SumoTrust account.
  • Group Saving feature which allows users to go on a savings mission with a group of friends, family, associations, challenges, etc to reach a savings goal. See image below:
  • The article also mentioned that their Learn feature (Motute) which will enable you to teach or learn anything from anywhere in the world will be ready and announced in a few months and will be released on Entrepreneur Platform. This means the Sumotrust’s partnership with Entrepreneur Platform will enable you to access the company’s course for free and get third party course at a discounted rate.

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From this, it is clear Sumobank (SumoTrust) is preparing to become another big company to come out of Nigeria or there’s something else we don’t know yet, whichever it is, Both names sound alike and non will be forgotten easily since they are all ‘Sumo’.

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Business News

Cornerstone Insurance in consolidation talk with two underwriting firms

Cornerstone Insurance Plc is planning to consolidate with some insurance companies ahead of the recapitalization deadline set by NAICOM. 

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cornerstone, Cornerstone Insurance in consolidation talk with two underwriting firms ahead of recapitalisation , Cornerstone Insurance Plc announces resolution of its bloard meeting

Cornerstone Insurance Plc is in merger talks with some insurance companies ahead of the recapitalization deadline set by the National Insurance Commission (NAICOM) for the insurance sector.

The move is to strengthen its capital base. The Group Managing director of the company, Ganiyu Musa, said consolidation with other market players was more efficient compared to just seeking fundraising.

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NAICOM, Recapitalisation: 44 firms get NAICOM’s nod , NAICOM boss makes case for recapitalisation, insists the exercise will solidify insurance sector  

Although Musa didn’t reveal the names of the insurance companies negotiating with Cornerstone Insurance, he said consolidation would place the firm in a stronger position, boost expertise, improve technical capacity and even strengthen the capital base of Cornerstone Insurance.

While the consolidation is expected to aid the company’s recapitalization process, Musa said the Cornerstone Insurance had already met the recapitalization request by NAICOM.

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According to him, the company has exceeded the N18 billion new minimum capital required by the insurance market regulator. Musa said the sale of its property and head office boosted the liquidity of the company, placing its finances in a better footing.

“The sale of our new property along Lekki axis has further increased the liquidity of the company to meet and surpass expectations. The company would have loved to keep the property for the long run, but we were challenged with the fact that real estate investment is not admissible in the ongoing recapitalisation.

“This necessitated the sale of the building for a handsome amount that covers the cost of the building project and still left with profit. At present, we are in a stronger financial position to scale through the exercise as our balance sheet is stronger and healthy,” he said. 

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[READ MORE: NAICOM boss makes case for recapitalisation, insists exercise will build a stronger insurance sector)

He added that, “The company came out from its loss position of N1.7 billion in 2017 to N1.8 billion profit in 2018, even as the 2019 profit outlook is showing sign of higher profit from that of the previous year, judging from its 2019 third-quarter report.”

While the insurance companies don’t have a choice but meet the deadline through fundraising and consolidation, the chairman of Mutual Benefit Assurance, Akin Ogunbiyi, said the company was against the planned recapitalisation scheme by NAICOM.

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The company has said it could survive the wave of the recapitalisation, it said its concern was for other players who might become victims to the plan. Mutual Benefit also condemned the handling of foreign acquisitions in the Nigerian market.

Patricia
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