The Nigerian National Petroleum Corporation (NNPC) has stated that the vandalism of its pipelines across the country rose by a phenomenal spike of 50% in January 2020.
This information is part of the monthly financial and operations report, which was released on Wednesday, April 22. 2020 in Abuja.
According to the General Manager, Group Public Affairs Division for NNPC, Dr. Kennie Obateru, 60 pipeline points were vandalized compared to 40 incidents recorded in December 2019. Atlas Cove-Mosimi and Mosimi-Ibadan axis pipelines accounted for 50% and 17% of the breaks respectively, with the remaining 33% being accounted for by all other routes.
It was, however, noted that NNPC was collaborating with the local communities and other stakeholders to curtail this menace.
The report also stated that Nigeria recorded crude oil and gas export sales of $434.85 million in January 2020. This represents an increase of 94.30% when compared to the figure in December 2019.
According to the NNPC spokesman, the month’s crude oil export sales contributed $336.65 million as against the $136.36 million for the previous month. It added that the export gas sales in January were $98.2 million, even as it noted that the crude oil and gas transactions from 2019 to January 2020, valued at $5.18 billion was exported.
It was noted that 1.2 billion litres of premium motor spirit (PMS), known as petrol which translates to 38.68 million litres per day, were supplied for the month of January.
In the gas sector, out of the 253.09 billion cubic feet (BCF) of gas supplied in January 2020, a total of 151.16 BCF of gas was commercialized, consisting of 36.20 BCF and 114.96 BCF for domestic and export market respectively.
The report stated that 59.89% of the average daily gas produced was commercialized, while the balance of 40.11% was re-injected, used as upstream fuel gas or flared. The gas flare rate was 7.90% for the month under review compared to 8.46% for the period of January 2019 to January 2020.
— NNPC Group (@NNPCgroup) April 22, 2020
Out of the 1.167.80 mmscfd of gas supplied to the domestic market in January 2020, about 639.70 mmscfd of gas, representing 54.78%, was supplied to gas-fired power plants, while the balance of 528.10 mmscfd or 45.22% was supplied to other industries.
The gas delivered to gas-fired power plants in January 2020 generated an average power of about 2,683 MW compared with the 2,498MW that was generated in December 2019.
Meanwhile, the NNPC has given a hint that it might suspend crude oil production if the global price slump and low demand persist.
This was disclosed by the NNPC spokesman, Kennie Obateru, during an interaction with the press.
GSK in big trouble as losses mount
The results were less than impressive with several key indicators showing a year-on-year decline.
GlaxoSmithKline Consumer Nigeria Plc (“GSK Plc” or “the Company”) is a public limited liability company with 46.4% of the shares of the Company held by Setfirst Limited and Smithkline Beecham Limited (both incorporated in the United Kingdom); and 53.6% held by Nigerian shareholders.
The ultimate parent and controlling party is GlaxoSmithKline Plc, United Kingdom (GSK Plc UK). The parent company controls GSK Plc through Setfirst Limited and Smithkline Beecham Limited.
The Company recently published its unaudited first quarter (Q1) 2021 consolidated financial statements for the period ended 31 March 2021.
The results were less than impressive with several key indicators showing a year-on-year decline. For example, Group revenue (turnover) declined from ₦4.99 billion in Q1 2020 to ₦3.46 billion in Q1 2021 a drop of over 30.66%. The revenue drop was due to a sharp decline in the local sale of its healthcare products.
Total loss after tax as of Q1 2021 was ₦238.07 million compared to a profit after tax of ₦113.47 million for the same period to Q1 2020.
The company is essentially divided into two segments viz: Consumer Healthcare and Pharmaceuticals. While the Healthcare segment was largely profitable in Q1 2021 (making a profit before tax of ₦ 8.73 million by March 31, 2021, the pharmaceuticals segment made a loss of ₦262.93 million in the same period.
The Consumer Healthcare segment of the company consists of oral health products, digestive health products, respiratory health products, pain relievers, over the counter medicines, and nutritional healthcare; while the pharmaceutical segment consists of antibacterial medicines, vaccines, and prescription drugs. While goods for the consumer healthcare segment are produced in the country, the pharmaceuticals are all imported.
The largely imported pharmaceutical products are thus exposed to the vagaries of foreign currency fluctuations coupled with a negligible to no revenue from the foreign sale of its healthcare products (same as in Q1 2020) as it barely exports its products out of the country.
The cost of importing the antibacterial, vaccines and prescription drugs, and the significant local operating expenses wiped off the marginal gross profits made by the pharmaceutical segment of the company. In effect, the gross profit of ₦508.12 million made by the pharmaceutical segment of the company was eliminated by an operating expense of ₦735.7 million and this resulted in a net loss for the pharmaceutical segment of the business.
Apart from the impact of imported pharmaceutical products as already discussed, other issues that affected the company’s Q1 2021 results and are likely to continue to affect its performance in future include:
- A limited product mix that has only the likes of Macleans and Sensodyne (Oral Healthcare); Pain relievers (Panadol and Voltaren); Digestive Health (Andrews Liver Salt); and Respiratory Health (Otrivin and Panadol Cold and Catarrh) all within the Consumer Healthcare segment.
- Increased competition, particularly from local pharmaceutical manufactures of similar over the counter medicines and other prescription medications and vaccines.
In addition, in October 2016, GSK Plc divested its drinks bottling and distribution business that manufactures and distributes Lucozade and Ribena in Nigeria, and other assets including the factory used for the drinks business to Suntory Beverage & Food Limited. The loss in revenue from these popular brands continues to impact its topline.
GlaxoSmithKline (GSK) is a global healthcare company and is well-known and acknowledged for its pioneering role in discovering and distributing vaccines for the likes of hepatitis A and B, meningitis, tetanus, influenza, rabies, typhoid, chickenpox, diphtheria, whooping cough, cervical cancer and many more.
It is also renowned for its manufacture and distribution of prescription medicines such as antibiotics and treatments for such ailments as asthma, HIV/AIDS, malaria, depression, migraines, diabetes, heart failure, and digestive disorders.
Perhaps GSK Plc’s fortunes may change if the company is able to obtain the parent company’s licence to manufacture GSK-owned vaccines and prescription medicines within the country while also exploring the possibility of extending the sale of its products outside the shores of the country.
Since different expertise is required for vaccines and prescription drug manufacture and distribution as compared to manufacture and sale of consumer healthcare products, perhaps another alternative may be for the company to create two separate companies with one company being a 100% vaccines and prescription drug pharmaceutical manufacturing and distribution company while the second company specializes entirely in the manufacture and sale of consumer healthcare products.
As a result of the Q1 2021 performance, the company’s earnings per share (EPS) dropped to -20 kobo compared to the 9 kobo earnings per share reported in Q1 2020. At the start of 2021, GSK Plc’s share price was ₦6.90 but the company has since lost over 10% of its price valuation as the company’s share price closed at ₦6.20 on April 30, 2021.
Buhari suspends NPA MD, Hadiza Usman, approves investigative probe panel
President Buhari has approved the immediate suspension of the MD of the Nigerian Ports Authority, Hadiza Usman.
President Muhammadu Buhari has approved the immediate suspension of the Managing Director of the Nigerian Ports Authority (NPA), Hadiza Usman.
The suspension of Usman is to allow the panel of inquiry which is to be set up by the Federal Ministry of Transportation, to investigate the management of the agency to effectively carry out the task.
This disclosure is contained in a statement issued by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, through some tweet posts on his official Twitter handle on Thursday, May 6, 2021.
Shehu pointed out that the suspension follows the approval of the recommendation of the Federal Ministry of Transportation by President Muhammadu Buhari.
The statement from Garba Shehu reads, “President Muhammadu Buhari had approved the recommendation of the Ministry of Transportation under Rt. Hon. Rotimi Amaechi for the setting up of an Administrative Panel of Inquiry to investigate the Management of the Nigerian Ports Authority (NPA).
The President also approved that the Managing Director, Hadiza Bala Usman, step aside while the investigation is carried out. Mr Mohammed Koko will act in that position.
The panel is to be headed by the Director, Maritime Services of the Ministry while the Deputy Director, Legal of the same ministry will serve as Secretary. Other members of the panel will be appointed by the Minister.”
Nairametrics | Company Earnings
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