The quality of locally-produced rice in Nigeria has recorded significant improvement in recent weeks, as the latest Nairametrics Household Survey revealed that more brands of local rice continued to flood major markets in Lagos, thereby pulling the prices.
According to the latest Survey, the price of local rice reduced significantly across major markets in Lagos as new brands of locally made rice were sighted in various markets. Bags of locally-made rice now sell for an average of N19,250 compared to the initial average of N20,750.
The report also showed that 10kg bags of locally produced rice reduced from N4,000 last month to N3,500 last week. The report has items that witnessed decrease in prices, Items that increased in prices, Items that maintained initial prices, special markets accounts and market insights.
Items that witnessed price decrease
- A 10kg bag of Mama Gold rice and Rice Master reduced to a uniform price of N3,500 compared to an initial average of N4,000 and N4,250 respectively.
- A 50kg bag of Mama Gold rice currently sells for an average of N19,250, a 7.23% reduction compared to an initial average of N20,750.
- Also, the price of 50kg bags of Caprice reduced to an average of N25,750 compared to an initial average of N26,167.
- A 50kg bag of brown beans (Oloyin) sells for an average of N12,500, a 3.85% reduction compared to N13,000 being sold two weeks ago.
- While a bag of regular brown beans currently sells for an average of N20,375, a 13.3% reduction in contrast to N23,500 sold in January. A 50kg bag of white beans reduced to an average of N19,875 from an initial average of N21,250.
- The price of pepper decreased yet again, as a big bag now sells for an average of N6,000 from an initial average of N6,500, while a medium bag which was sold for an average of N5,000 two weeks ago reduced by 4% to sell for N4,800.
Items that witnessed price increase
Among the items that witnessed increase in their prices are yam, locally made groundnut oil, tomatoes and onions among others.
- A big tuber of yam now sells for an average of N850 from an initial average of N813, indicating a 4.62% increase within two weeks, while a medium-sized tuber of yam increased by 4.17% to sell for an average of N625.
- A 25-litre gallon of local vegetable oil sells for an average of N13,075, an 1.55% increase compared to an initial average of N12,875.
- A basket of round shaped tomatoes that enjoyed consistent price reductions in recent weeks witnessed relative price increase as a big basket now sells for an average of N6,500 compared to an initial average of N6,000, representing 8.33% increase.
- A medium-sized basket of tomatoes currently sells for N3,800 compared to an initial N3,500 in January.
- Another item that recorded increase in price, despite a run of consistent decrease is onion. A big bag of dry onions currently sells for N22,000 from an initial N20,000. It increased by 10% within two weeks.
- Also, a big bag of new onions costs N19,000, a 5.56% increment compared to N18,000 in January.
Items that maintained initial prices
- Big baskets of sweet potatoes and Irish potatoes still retain their initial prices at N4,300 and N18,000 respectively.
- A bag of Royal Stallion (Foreign) rice maintained its initial price at N27,000.
- Across the visited markets, the price of a bag of flour remains unchanged at an average of N11,275.
- The prices of bags of maize, both yellow and white, maintain their initial prices at the average of N14,000 and N15,500 respectively.
- A kilo of fish (Kote) continues to sell for an average of N478 as Titus fish also maintains N485 as sold two weeks ago.
- Some other items that maintained their initial prices include cartons of noodles, refilling of household cooking gas, beverages and crates of eggs.
- Sellers of locally produced palm oil and groundnut oil at Daleko market told Nairametrics Research that their prices are reducing gradually, compared to December.
“A big drum of groundnut oil, that was sold between the range of N115,000 and N120, 0000 in December is now sold for an average of N108,000, while palm oil of the same quantity sells for an average of N72,000 compared to an average of N80,000.”
- We also gathered that the price of a big bunch of plantains that was sold in December for N1,500 at Idi-Oro market reduced to N1,000 in February while a smaller sized bunch now sells for N800 compared to N1,000 in December.
Nairametrics Research Team gathered that the continuous supply of new brands of locally produced rice is as a result of farmers’ willingness to produce rice to meet the country’s needs. This has crashed the price of the commodity to N19,000 from an initial N21,000.
A rice seller at Daleko market praised the producers of locally made rice, as the volume of stony rice in the various markets has reduced drastically, while also producing rice that could measure up with foreign-made rice in terms of quality.
Some of the new brands of locally made rice sighted in the markets include Famous Rice, Our Rice, JGW New-World Rice and Al-flux Rice, all of which sell within the range of N18,000 and N19,000 while Mai-Nasari rice cost an average of N16,000.
|Items||Brand||Unit||MUSHIN (06/02/2020)||DALEKO (06/02/2020)||OYINGBO (06/02/2020)||MILE 12 (06/02/2020)||Average||MUSHIN (23/01/2020)||DALEKO (23/01/2020)||OYINGBO (23/01/2020)||MILE 12 (23/01/2020)||Average|
|Bag of Rice||Basmati||5kg||NA||NA||NA||NA||NA||NA||NA||NA||NA||NA|
|Bag of Rice||Mama Gold||10kg||NA||3500||NA||NA||3500||NA||4000||NA||NA||4000|
|Bag of Rice||Royal Stallion||50Kg||27000||NA||27000||NA||27000||27000||NA||27000||NA||27000|
|Bag of Rice||Rice Master||10kg||NA||3500||NA||NA||3500||NA||4000||NA||4500||4250|
|Bag of Rice||Mama Gold||50kg||19000||19000||19500||19500||19250||21000||20000||21000||21000||20750|
|Bag of Rice||Caprice||50kg||26500||NA||NA||25000||25750||26500||27000||NA||25000||26166.666666667|
|Bag of Rice||Mama's Pride||50kg||19000||19000||19500||19500||19250||21000||20000||21000||21000||20750|
|Bag of Rice||Falcon||25kg||NA||NA||NA||NA||NA||NA||NA||NA||NA||NA|
|Bag of Beans||Oloyin||50kg||13000||12000||13000||12000||12500||13000||12000||13000||14000||13000|
|Bag of Beans||White||50kg||20500||18000||21000||20000||19875||22000||20000||22000||21000||21250|
|Bag of Beans||Brown||>50kg||22000||18000||21500||20000||20375||24000||22000||24000||24000||23500|
|Tuber of Yam||Abuja||1 Big Size Tuber||900||800||850||850||850||850||800||800||800||812.5|
|Tuber of Yam||Abuja||1 Medium Size Tuber||650||650||600||600||625||650||550||600||600||600|
|Carton of Noodles||Indomie||305g (Belle full)||2900||2900||2900||2900||2900||2900||2900||2900||2900||2900|
|Carton of Noodles||Indomie||200g (Hungry man)||3200||3200||3200||3200||3200||3200||3200||3200||3200||3200|
|Carton of Noodles||Chikki||100g||2000||2200||2100||2100||2100||2000||2200||2100||2100||2100|
|Carton of Noodles||Minimie||70g||1500||1500||1500||1500||1500||1500||1500||1500||1500||1500|
|Carton of Noodles||Golden Penny||70g||1400||1400||1400||1400||1400||1400||1400||1400||1400||1400|
|Bag of Garri||Ijebu||80kg||6000||6800||7000||7000||6700||6000||6800||7000||7000||6700|
|Bag of Garri||White||50kg||6000||6000||6500||6000||6125||6000||6000||6500||6000||6125|
|Bag of Garri||Yellow||50kg||6000||6500||6500||7000||6500||6000||6500||6500||7000||6500|
|Basket of Potato||Sweet||Big Basket||4300||4300||4300||4300|
|Basket of Potato||Sweet||Small Basket||700||700||700||700|
|Basket of Potato||sweet||Smallest Basket||200||200||200||200|
|Basket of Potato||Irish||Biggest Basket||18000||18000||18000||18000|
|Basket of Potato||Irish||Medium Basket||2000||2000||2000||2000|
|Basket of Potato||Irish||Small Basket||1500||1500||1500||1500|
|Packet of Pasta||Golden Penny||500g||4300||4400||4300||4200||4300||4300||4400||4300||4200||4300|
|Packet of Pasta||Dangote||500g||4000||4000||4000||4100||4025||4000||4000||4000||4100||4025|
|Packet of Pasta||Power (1 pc)||500g||220||220||220||200||215||220||220||220||200||215|
|Packet of Pasta||Bonita (1 pc)||500g||220||200||200||210||207.5||220||200||200||210||207.5|
|Gallon of Palm Oil||Local||5 Litres||2200||2000||2300||2000||2125||2200||2000||2300||2000||2125|
|Gallon of Palm Oil||Local||25 Litres||10500||9000||10000||9500||9750||10500||10000||10500||9500||10125|
|Gallon of Vegetable Oil||Local||5 Litres||2300||2300||2400||2300||2325||2300||2300||2400||2300||2325|
|Gallon of Vegetable Oil||Local||25 Litres||13000||13000||13500||12800||13075||13000||12500||13500||12500||12875|
|Gallon of Vegetable Oil||Kings||5 Litres||3000||3000||3000||3000||3000||3000||3000||3000||3000||3000|
|Gallon of Vegetable Oil||Wesson||5 Litres||3900||3900||3900||3900||3900||3900||3900||3900||3900||3900|
|Gallon of Vegetable Oil||Mamador||3.8 Litres||2500||2450||2500||2400||2462.5||2500||2450||2500||2400||2462.5|
|Gallon of Vegetable Oil||Power||3 Litres||1800||1800||1800||1800||1800||1800||1800||1800||1800||1800|
|Bunch of Plaintain||Plaintain||1 Big Bunch||400||400||350||400||387.5||400||400||350||400||387.5|
|Bag of Flour||Dangote||50kg||11200||11200||11200||11500||11275||11200||11200||11200||11500||11275|
|Bag of Flour||Honey well||50Kg||11500||11200||11200||11200||11275||11500||11200||11200||11200||11275|
|Bag of Flour||Mama Gold||50kg||11500||11300||11000||11300||11275||11500||11300||11000||11300||11275|
|Bag of Sugar||Dangote||50kg||3500||3200||3400||3200||3325||3500||3200||3400||3200||3325|
|Milk||Peak Powdered (Tin)||400g||1250||1200||1200||1200||1212.5||1250||1200||1200||1200||1212.5|
|Milk||Peak milk (Refill)||500g||1050||1000||1000||1000||1012.5||1050||1000||1000||1000||1012.5|
|Milk||Dano Powdered (Tin)||500g||1000||1000||1000||1000||1000||1000||1000||1000||1000||1000|
|Milk||Loya Powdered (Tin)||400g||1000||1000||1000||1050||1012.5||1000||1000||1000||1050||1012.5|
|Cocoa Beverages||Milo (Tin)||500g||1000||1100||1050||1000||1037.5||1000||1100||1050||1000||1037.5|
|Cocoa Beverages||Milo (Tin)||900g||2000||2100||2100||2100||2075||2000||2100||2100||2100||2075|
|Cocoa Beverages||Milo Refill||500g||900||900||900||900||900||900||900||900||900||900|
|Cocoa Beverages||Bournvita Refill||500g||950||900||950||900||925||950||900||950||900||925|
|Cocoa Beverages||Bournvita (Plastic)||900g||2000||2000||2000||2000||2000||2000||2000||2000||2000||2000|
|Cocoa Beverages||Ovaltine Refill||500g||800||800||850||850||825||800||800||850||850||825|
|Tea||Lipton Yellow label||52g||310||290||300||300||300||310||290||300||300||300|
|Sugar||St' Loius Sugar(Cube)||500g||400||380||400||450||407.5||400||380||400||450||407.5|
|Sugar||Golden Penny Sugar (cube)||500g||350||300||350||300||325||350||300||350||300||325|
|Bottled Water (Refill)||Cway||Refill||600||600||650||600||612.5||600||600||650||600||612.5|
|Juice||5 Alive||1 litre||600||550||550||600||575||600||550||550||600||575|
|Tomatoes||Big Basket||round shaped||6500||6500||6000||6000|
|Medium Basket||round shaped||3800||3800||3500||3500|
|Small Basket||round shaped||2000||2000||2500||2500|
|Big Basket||Oval Shaped||NA||NA||NA||NA|
|Small Basket||Oval Shaped||NA||NA||NA||NA|
|Fish||Kote (Horse Mackerel)||1 kg||500||450||470||490||477.5||500||450||470||490||477.5|
|Fish||Titus (Mackerel)||1 kg||500||450||500||490||485||500||450||500||490||485|
|Onions||Big bag||Dry Onions||22000||22000||20000||20000|
|Onions||Big bag||New Onions||19000||19000||18000||18000|
About Nairametrics Food Price Survey
The Nairametrics Food Price Watch is a bi-weekly household market survey that covers the prices of major food items, with emphasis on five major markets in Lagos – Mushin Market, Daleko Market, Oyingbo Market, Idi-Oro Market and Mile 12.
Merger, Tax incentive boosts BUA Cement FY 2019 result
BUA Cement Plc recently released financials reveal a 47.5% increase in revenues of N175.52 billion up from N119 billion in 2018.
One of the industries set to experience the downsides of the Covid-19 pandemic is the construction industry. Given the slowdown in construction activities as a result of the lockdowns and constrained economic activities, the reasons are not farfetched.
Prior to the outbreak of the pandemic, Globe Newswire had predicted an accelerated growth pace of the global construction industry from 2.6% in 2019 to 3.1% in 2020. This growth has now been revised to 0.5%. What is even more daunting is that the revised growth rate is based on the assumption that the outbreak will be contained across all major markets by the end of the second quarter of 2020.
It is only after that (including freedom of movement in H2 2020) that events could facilitate reverting to the normal course of activities to foster businesses in the industry like BUA Cement or those that depend on it to restart activities.
Nigeria’s third-largest cement company, BUA Cement Plc, however, still has its 2019 victories in order. Involved in the manufacturing and sales of cement, BUA Cement has 3 major subsidiaries and plants in Northern and Southern Nigeria.
With a market capitalisation of N1.18 trillion ($3.3 billion), BUA is the third most capitalised company on the NSE. Its recently released financials reveal a 47.5% increase in revenues of N175.52 billion up from N119 billion in 2018.
The company’s profits also increased by 69.1% from N39.17 billion in 2018 to N66.24 billion in 2019. Core operating performance was strong, and this was supported by strong cement sales in the domestic market, impairment writes back, and other income.
The main reason for the company’s increased earnings is from the cost synergy and increased revenue as a result of the merger that took place between CCNN Plc and Obu Cement Company Limited.
There was also a striking jump in its income statement on its tax for the year. For FY 2019, it incurred a tax expense of N5.6 billion, in comparison to the N24.9 billion tax credit it received in FY 2018.
This was as a result of a reversal of previous tax provision made on Obu Line 1; it received approvals for an extension of the company’s pioneer status on Obu line-1 and Kalambaina line-2 in February 2020, to leave effective tax rate at just over 8% in 2019. The pioneer status will help the company save funds that will otherwise have been spent on higher taxes.
(READ MORE:Dangote Cement to access more debt funding)
BUA reported an impressive FY’19 result. Its performance shows the growing strength of the company and its increasing market share. On the back of the strong performance, management declared an N1.75 dividend per share that translates to a dividend yield of 5.5% on current prices.
Cash flow position was also robust with a strong closing cash balance – from N2.8 billion in 2018 to N15.6 billion as at year ended 2019. The company’s growth, as well as the impact of its merger, present a great buy opportunity of the highly capitalized, low-cost stock. As of today when the market closed (21st May) its share price stood at N35.60 from a 52-week range of N27.6 and N41.
What we see is a great growth stock further heightened by the population expansion and increased urbanization. However, we expect the impact of the Covid-19 pandemic to be felt from the Q1 results of the company.
The industry could slow down for the year as the level of commercial construction also slows down. Yet the best part of holding stocks like this is that even with stalled operations for a period, a resurgence will always emerge.
Analysis: Airtel Nigeria is winning where it matters
Airtel has left no stones unturned in ensuring that its provisions are top-shelf – subscribers to the network, of course will have their own ideas.
Airtel might have won our hearts over with internet-war adverts starring our favourite tribal in-laws, but its fundamentals are what will make us the bucks that keep us happy. Airtel Africa Ltd is a subsidiary of Indian telecoms group, Bharti Airtel Ltd; the group has left no stones unturned in ensuring that its provision of prepaid plans, credit transfers, mobile internet services, messaging, roaming facilities and more, are top-shelf – subscribers to the network, of course, will have their own ideas.
Since last year when Airtel Nigeria became the second telecommunication company in Nigeria listed on the NSE, the company has experienced a steady level of growth. With a presence in 14 African countries, the group’s strength lies in its diversity with stronger companies mitigating the poor performances of others.
Performance Overview: Airtel Africa
Airtel Africa’s report for the year ended March 2020, revenue jumped by 10.9% from $3.1 billion at the year ended 2019 to $3.4 billion in 2020. The consolidated profit before tax also jumped by 71.8% from $348 million in 2019 to $598 million in 2020. However, profit for the period dropped by 4.23% with earnings of $408 million in 2020 from the $426 million it had earned in 2019. A reason for this is the tax figure that moved from a credit of $78 million in 2019 to tax payments as high as $190 million in 2020. Total assets also jumped by 2.41% from 2019’s value of $9.1 billion to $9.3 billion in 2020 primarily as a result of their acquisition of more property, plant, and equipment (PPE). The total customer base grew by 9.3% to 99.7 million for the year ended.
Full Report here.
Revenue growth of 10.9% was driven by double-digit growth in Nigeria and East Africa. However, the rest of its African operations experienced a decline in revenue. Its success in Nigeria is especially commendable, considering the fact that the company lost more than 100,000 subscribers in Nigeria between December 2019 and January 2020. Raghunath Mandava, Chief Executive Officer, remarked that the results which were in line with the group’s expectations, “are clear evidence of the effectiveness of our strategy across Voice, Data and Mobile Money.”
Behind The Numbers – Nigeria
Airtel Nigeria’s performance indicates the company is making the right calls in a very competitive industry. Nigerians are fickle when it comes to data and voice but will spend if the service is right. The company grew its data revenue by a whopping 58% to $435 million a sign that its strategy to focus on data is working. Voice Revenues for the year was up 15% to $850 million. In total, Airtel Nigeria’s revenue was up 24.4% to $1.37 billion. Ebitda margin, a number closely watched by foreign investors 54.2% from 49% a year earlier. Operating profit for the year ended also jumped by 52.6% for the year from 2019 and 32.4% from Q1 2019. Total customer base in Nigeria also grew by 12.5%.
Nigeria is surely critical to Airtel Africa’s future seeing that it contributes about one-third of its revenue. Recent results thus indicate it is winning where it matters most and it must continue to stay this way if it desires to survive a brutal post-COVID-19 2020. Telcos are expected to be among the winners as Nigerians rely more on data to work remotely but there are other players in this game. Concerning the impact of the pandemic, he explained that at the time of the approval of the Group Financial Statements, the group has not experienced any material impact arising from the impact of COVID-19 on its business.
On cash flows…
The group has also taken measures to enhance its liquidity. The CEO explained that it is moving its focus to enhance liquidity towards meeting possible contingencies.
“Having considered business performance, free cash flows, liquidity expectation for the next 12 months together with its other existing drawn and undrawn facilities, the group cancelled the remaining USD 1.2 billion New Airtel Africa Facility. As part of this evaluation, the group has further considered committed facilities of USD 814 million as of date authorisation of financial statements, which should take care of the group’s cash flow requirement under both base and reasonable worst-case scenarios.”
To this end, they have put in the required strategies to preserve its cash as its cash and cash equivalents, consequently, jumped by 19.1%.
Investors looking at this impressive result will be wondering if this portends a buying opportunity. Airtel Nigeria closed at N298 on Friday and has remained at this price for about a month. The stock is quite illiquid and is not readily available to buy.
It’s the price to earnings ratio of 4.56x makes it quite attractive. Further highlighting this opportunity is its price-to-book ratio which is as low as 0.5273, suggesting that the stock could be undervalued. Whether it is available to be bought, is anyone’s guess.
Analysis: Nestlé strong but exposed.
Being a market leader is great, but in times of economic despair, it can quickly turn you into prey.
With about six decades of being the choice companion for families within Nigeria and the diaspora, Nestlé Nigeria Plc has positioned itself as one of the largest food and beverage companies on the continent. Owing to the expansive growth of Nigeria’s population – one projected to reach 300 million by the year 2030, as well as the growing middle class, the FMCG sector has a very positive outlook.
Consequently, Nestle’s leadership in the industry and its huge market size expectedly gives it a huge advantage. However, with the global economy barely racing against the impact of the Covid-19 pandemic, even the brimming FMCG sector will experience its own level of disruption.
Nestle’s recently released Q1 2020 financials reveal a revenue decline of 0.9%, as it dropped to a marginal ₦70.33 billion from the ₦70.97 billion turnover it garnered in Q1 2019. The profit before tax also experienced an 8.7% drop while the profit after tax had a 12.84% drop, both yielding ₦17.5 billion and ₦11.2 billion respectively, for the first quarter of this year. This is predominantly owing to its increased losses from its overseas activities.
READ ALSO: Italy to invest in Nigeria’s agric sector
The company procures all of its raw materials on a commercial basis from overseas and local suppliers; consequently, the percentage of its supplies dependent on international suppliers had a negative impact on its Q1 2020 financials. Its profits were plagued by a foreign exchange loss of ₦154.7 million from ₦18.9 million, an even higher loss of 720.6%. While the company did not disclose the value of its export revenue, we believe it too might have suffered from reduced exportation in the latter part of the quarter.
The group has since been taking on expansionary projects, such as its launch of a second beverage production plant in Ogun State in February of 2018. The company, on a continuous basis, explores the use of local raw materials in its production processes, contributing its own quota to the Nigerian economy.
Just last week, Nestlé’s stocks went up 2.56% to close at ₦1000, a price it still currently holds today after markets closed. Its price to earnings ratio is 18 and its earnings per share (EPS) of 55.54, signal an investor sentiment of confidence. However, its high price to book ratio of 13.9865 reveals that the company is slightly overvalued and its price of ₦1000 makes it attractive primarily to institutional investors that can afford to purchase large volumes of the stock enough to benefit from its steady growth in value. The company had proposed a dividend payout of ₦45 per share. This also comes after paying ₦25 per share interim dividends earlier. Its dividend yield at the time of writing this is 7%, further heightening the possibilities for the income investor.
While the company has strong fundamentals governed predominantly by its position as a market leader, its years of experience, and its existence in the FMCG sector, it too might not have a smooth sail in the coming quarter. Its overseas business from both the supply and the demand sides are expected to experience a further decline, ultimately resulting in an even lower relative turnover and lower earnings.
We also expect the decline in average disposable income of Nigerians from loss of jobs and an overall wariness of the economic impact of the pandemic, to further drive down turnover; however, sound operational efficiencies and cost control/ profit strategies by the group could ease the burden. The company fundamentals remain strong but its exposure to consumer disposable income remains a major concern. There is always a cheaper alternative and when your pocket empties your choice for cheaper substitutes swells.