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Company Results

Stocktaking: Ebenezer Onyeagwu’s year as CEO of Zenith bank

Today marks one year since Ebenezer Onyeagwu became GMD, and this article seeks to highlight strides achieved in the last one year.  

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Zenith Bank GMD and CEO Mr. Ebenezer Onyeagwu, One year as CEO of Zenith bank, stocktaking

On June 1, 2019, Ebenezer Onyeagwu assumed the position of Group Managing Director/CEO of Zenith Bank Plc, replacing Peter Amangbo whose 5-year tenure ended the previous day.

According to the bank’s official statement, his appointment was in line with the succession strategy of grooming leaders from within. Onyeagwu, at the time, already had almost 30 years’ banking experience, with 17 years spent in Zenith Bank, so if anyone knew the bank well enough to take up the position, it surely would have been him.

He had served as Executive Director, General Manager, Deputy General Manager and Senior Manager, and had basically covered all of the bank’s departments, from Financial Control and Strategic Planning, to Risk Management, Retail Banking, Institutional and Corporate Banking Business Portfolios, IT Group, Credit Administration, and Treasury and Foreign Exchange Trading,

Today marks one year since he became GMD, and this article seeks to highlight strides achieved within that period.

Coming in at the end of the second quarter, the impact of Onyeagwu’s leadership would first be seen in the Q3 results. When the results were released sometime in November, the first thing that was obvious was that gross earnings increased by 4% to N491.3 billion when compared to Q3 of the previous year where the group recorded gross earnings of N474.6 billion.

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(READ MORE: GTBank, Zenith Bank, Nestle emerge Renaissance Capital’s top stock picks)

With the expansion of channels and platforms of services, fees from electronic products doubled to N35.3 billion from N17.6 billion in Q3 2018. Profit Before Tax (PBT) grew by 5% from N167.3 billion in Q3 2018 to a record N176.2 billion in Q3 2019.

One year as CEO of Zenith bank, stocktaking

Zenith Bank GMD and CEO Mr. Ebenezer Onyeagwu

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The conclusion at that point was that the group had applied cost optimization strategies and aggressive retail banking to get the results it was showing. Earnings Per Share (EPS) also grew by 5% from N4.58 in Q3 2018 to N4.80 in Q3 2019.

The group increased its share of the industry deposits, with customer deposits growing to N3.95 trillion from N3.69 trillion.

All of these gains would be consolidated by the end of 2019 when the Group released the FY 2019 results.

Compared to FY 2018, the Zenith Bank Group recorded 5% growth in gross earnings from N630.3 billion to N662.3 billion, with fees on electronic products growing by over 100% from N20.4 billion in 2018 to N42.5 billion in 2019.

Total assets also increased by 7% from N5.96 trillion to N6.35 trillion, and Earnings per Share (EPS) grew 8% from N6.15 to N6.65 in 2019. Profit before Tax increased, by 5% from N232 billion in 2018 to N243 billion in 2019.

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The group increased its share of the market as it secured more customer deposits across the corporate and retail space, with deposits growing by 15% to close at N4.26 trillion. The strategy, according to the bank’s report, was efficient cost management while employing digital innovation and digital assets to expand retail franchises.

(READ MORE: Zenith Bank clears air, denies binding offer to acquire any bank)

Among all five tier 1 banks, Zenith Bank Plc registered the highest profit after tax, which also increased from N193.42 billion in 2018 to N208.84 billion in 2019.

Zenith Bank GMD and CEO Mr. Ebenezer Onyeagwu, Zenith Bank: No major threat to earnings in the near term; Buy recommendation maintained, One year as CEO of Zenith bank, stocktaking

Zenith Bank GMD and CEO Mr. Ebenezer Onyeagwu

The Q1 2020 result was released on April 29, and again, there was an all-round improvement compared to Q1 2019. Gross earnings were 6% higher than last year’s first quarter (N158.1 billion in March 2019 to N166.8 billion), Non-interest income practically exploded by 43% (from N32.7 billion in Q1 2019 to N46.6 billion in Q1 2020).

Profit before tax improved by 3% from N57.3 billion in Q1 2019 to N58.8 billion in Q1 2020.

Customer deposits increased by some N200 billion in the quarter, increasing the total customer deposits from N4.26 trillion in December 2019 to N4.46 trillion by the end of the first quarter of 2020.

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As with other banks, the COVID-19 pandemic posed challenges for Zenith bank, but as contained in the report, the bank activated its business continuity plan, while deploying enhanced digital channels to handle the increased volumes of customer transactions.

It is clear to both shareholders and board management, at this point, that picking an MD from within the existing structure definitely paid off.  Currently, using Profit after tax, market share value, and earnings per share, one can say that Zenith Bank is cruising at the number one position among Nigeria’s top banks.

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Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career. As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

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Company Results

COVID-19 pandemic causes Beta Glass’ performance to drop in Q2 2020

For Beta Glass, the company’s results indicate that revenue dipped for the first time in eight years.

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Beta Glass receives $30 million to boost capacity, schedules completion next year 

Beta Glass Plc’s reported revenue for Q2 2020 dipped year on year (YoY) by 41.6% from N7.32 billion to N4.27 billion. Compared with the previous quarter (Q1 2020), the company’s revenue dipped by 39.6%.  

A cursory analysis of the company’s results indicates the company posted a loss after tax for the first time, according to the results on NSE from 2012, in eight (8) years, as companies continue to battle the impact of the COVID-19 pandemic disruption on businesses.  

READ: Frigoglass to invest €25 million in Beta Glass expansion

Revenues from the sales of glassware and bottles dipped in the period under review, from N7.32 billion recorded in the corresponding period of 2019 to N4.27 billion in Q2 2020. Also, Revenue from local sales plunged by 38.15% (YoY) from N6.71 billion to N4.15 billion while revenue from other countries dipped by 80.6% from N604.01 million to N117.05 million. 

The Earnings Per Share (EPS) of the company declined by 107.02% in Q2 2020 from N2.85 in Q1 2020 to a negative value of N0.20. Compared with the same period last year, EPS declined by 109.2% from N2.18. The decline in distributable profit by 107.09from N1.09 billion recorded in the second quarter of 2019 relative to a loss of N101.18 million Q2 2020 contributed to the decline of the EPS. 

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READ: UPDATED: Nigeria received $1.29 billion capital inflows in Q2 2020, down by 78.6%

Beta Glass Plc’s shares were listed on the floor of the NSE on July 2nd, 1986. The shares currently trade at N55.40 per unit. The highest price for a unit of share in 52 weeks was N70 and the lowest N53.80. A total of 22,102 units was sold in the last seven days trades. Shares outstanding is 499,972,000 units and its market capitalisation is N27.69 billion. 

Greif Nigeria Plc operates in the same sub-sector as Beta Glass Plc, Packaging/Containers. Greif Nigeria Plc’s share price is N9.1. Its last seven days trades dates back to January 27th, 2020, with total volume sold to date 703 units. Shares outstanding is 42,640,000 units and its market capitalisation is N388.02 million.

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READ: Even with a 939% jump in H1 Profit, Neimeth still needs to build consistency

Beta Glass PLC is one of the oldest glass manufacturing and distribution companies in Nigeria, listed on the Nigerian Stock Exchange (NSE) in 1986 and incorporated in 1987. Beta Glass Plc is a subsidiary of Frigoglass Industries Nigeria Limited (the parent company), which holds 61.9% of the ordinary shares of the Company. The ultimate controlling party is Frigoglass S.A.I.C, Athens.  

Explore the Nairametrics Research Website for Economic and Financial Data

Beta Glass Plc provides superior packaging solutions to a variety of customers operating in the soft drinks, beer, spirit, cosmetics and pharmaceutical market segments through a wide range of glass containers.COVID-19 pandemic disruption on the operations of Beta Glass Plc as well as its customers affected results negatively. In this instance, the company’s top customers are brewers and soft drink makers that have been hit hardest by the Covid-19 lockdown. Lower demand from customers ensured drop in sales. Inventories increased by 26.73% from N6.54 billion as at December 2019 to N8.31 billion in the year under review and by 21.85% compared to the previous quarter.

READ: Forex inflow in I&E window declines by $2.8 billion as FPIs drop by 97%

Most of the brewery companies recorded drop in revenue in Q2 2020. A case in point is Nigerian Breweries Plc, the pioneer brewing company in Nigeria, that recorded a 17.49% drop in revenue from N83.20 billion in Q1 2020 to N68.65 billion. It also fell by 21.01% compared to 86.91 billion recorded in the corresponding quarter of 2019.

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While the company hopes to bounce back in the near future, the sector faces an uncertain future with the planned phasing out of the production of certain high concentration alcohol. The Director-General of the National Agency for Food Drugs Administration and Control (NAFDAC) indicated that plans are underway to phase out the production of alcohol in sachets, small volume glass and Poly-Ethylene Terephthalate (PET) bottles. This may likely impact the sector positively or negatively. 

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Company Results

R.T. Briscoe declares N618.9 million loss in H1 2020, as sales of vehicles fall 

A 30.2% decline in the sales of motor vehicles contributed to the H1 2020 loss recorded by R.T. Briscoe.

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RT Briscoe Nigeria Plc appoints new Executive Director, CFO

R.T. Briscoe, the pioneer dealer of Toyota automobiles, suffered a loss of N618.9 million in the first half of 2020. The loss increased by 84%, when compared to the corresponding period in 2019.

This was disclosed in the company’s H1 2020 published by the Nigerian Stock Exchange (NSE).

According to the report, the decline in revenue negatively impacted the company’s bottom line. Briscoe for the first half of this year reported N2.42 billion as revenue, which is 21% lower when compared with a revenue of N3.07 billion in H1 2019. 

READ: Guinness gains on NSE despite N17 billion pre-tax loss

Highlights  

  • Revenue decreased by 21 
  • Cost of sales decreased by 19 
  • Net finance costs increased by 27 
  • Loss increased by 84 

READ: Jumia reports N17.1 billion loss in Q2 as COVID-19 fail to boost revenue

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Facts behind the loss 

careful review of the results revealed that the decline in revenue, which aggravated the loss, is attributable to the 30.2% decline in revenue from the sales of Motor Vehiclesand the 33.5% decline in revenue from Aftersales services and parts 

In the light of the figures contained in the reports, Nairametrics found that the sales of Toyota & Ford Vehicles declined in the first six months of 2020. 

On the flip side, revenue from other segments such as; Industrial equipmentand Property development facility management increasedcompared with the corresponding period in 2019. 

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(READ MORE: Nigeria faces breaking point as India’s global crude oil demand drops by 70%)

Other downward pressures on profitability 

The company’s hunt for profit for the first half of this year was eroded by Selling and distribution expenses of N6.95 million, and Administrative expenses of N542.2 millionThese expenses eroded the gross profit of N473.93 million to the tune of N38.8 million operating loss, which was compounded by a N580.14 million Net finance cost. 

(READ MORE:UPDATED: Nigeria’s GDP contracts by 6.10% in Q2 2020, as critical sectors plunge)

Key issues facing the auto dealer 

R.T. Briscoe has total current assets value of N2.33  billion and current liabilities value of N17.69 billionas the auto dealer maintains a massive working capital deficit of N15.36billion, driven by bank overdraft worth N15.86billion. 

The bank overdraft of N15.86billion in the company’s book represents 89.7% of the total liabilities of the company, and this castshadows on the going concern of the auto dealer, given the penalty charges from banks and court litigations from creditors. 

READ: COVID-19: Abuja Sheraton suffers 88% drop in revenues

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As a result of the sustained losses incurred over the years, the shareholders’ fund has been completely eroded, to the tune of N10.12billion deficit, for the group as of 30th June 2020. 

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Company Results

COVID-19 boosts Fidson Healthcare Plc’s Q2 2020 performance

A cursory analysis of the company’s result shows revenues got a boost, despite the challenges of Covid-19.

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Fidson Healthcare Plc

Fidson Healthcare Plc’s reported revenue for Q2 2020, increased year on year by 16.19%, from N3.83 billion to N4.45 billion.

Fidson Healthcare Plc is one of the leading pharmaceutical manufacturing companies in Nigeria. It is the second-largest pharmaceutical company in the country by Q2 2020 revenue, after GlaxoSmithKline Consumer Nigeria Plc – with a revenue of N5.44 billion.

Explore the Nairametrics Research Website for Economic and Financial Data

A cursory analysis of the company’s result shows revenues got a boost, despite the challenges of Covid-19. The lockdown affected the importation of products including some of its exports.  Yet revenue topped, thanks to an increase in sales of prescription drugs.  

Fidson has two key segments – Prescription (Ethical) drugs, and Over the counter sales. While revenues from over the counter sales were flat; the company booked revenues of N4.69 billion, compared with N3.7 billion in the period under review.  COVID-19 pandemic has largely boosted sales for most healthcare companies, as Nigerians rushed to buy immune boosters, thought to provide protection against the virus. 

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READ: Japan’s Ohara Pharmaceutical takes over 20% stake in Fidson Healthcare

Prescription drugs (Ethical drugs), also increased as a result of that, when compared with Q2 2019. The COVID-19 pandemic boosted the revenue of pharmaceutical companies, compared with previous periods as medicine sales surged.  

Apart from growing demand, the sector has also attracted interest from the CBN and the FG. Recently, The Central Bank of Nigeria (CBN), intervened in the sector through the provision of N100 billion credit, towards managing the pandemic, “providing opportunities to explore the development of new products,” according to the Chairman of the company, Mr. Segun Adebanji. 

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READ: Nigeria’s total foreign trade drops to N6.24 trillion in Q2 2020, export plunges by 52%

Despite the interventions, the sector still faces a major challenge, as noted by the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN). The association said that local drug manufacturers may run out of business, as most raw materials and nearly finished pharmaceutical products are imported into the country. The Association submits that the reason for this is inconsistent government policies, which results in a lack of investment in the sector.    

Commenting on the surge in profits and reduction in certain costs, the Chairman of the company noted that various cost-cutting strategies were utilized in driving performance upward. The Earnings Per Share (EPS) of the company, grew by 433.33% from -6 kobo at the end of 2018, to 20 kobo at the end of 2019.  

READ: Fidson reports over 500% increase in profit for 2019

Fidson shares currently trade at N3.50 per unit. The share’s highest price in 52 weeks was N4.05 and the lowest was N2.21. A total volume of 1,132,011 units was sold in the last seven days trades. Shares outstanding is 2,086,360,250 units. As for GSK, a total volume of 2,882,893 units, was sold in the last seven days trades. Shares outstanding is 1,195,876,488 units.  

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