Guinness Nigeria Plc, on Wednesday, informed the public in a statement to the Nigerian Stock Exchange, about the material circumstances that will impact its full-year financial results for 2020.
Excerpts of the report are as follows;
- The adverse impact of the sharp contraction in economic activities and the knock-on effect of the COVID-19 lockdown took a toll on the on-trade segment of the business across all our markets. Production and revenues have thus been negatively affected.
- Guinness Nigeria carried out a comprehensive review of its asset base and made a strategic decision to impair a certain category of assets, which were generating suboptimal returns. This is in line with the company’s long-term strategy of delivering value to shareholders.
- Due to a combination of the impact of COVID-19 and the asset impairment, we expect the profitability of the Company for the Financial Year to 30th June 2020 to be impacted. The Company’s balance sheet however remains strong, and this gives the Board the confidence that the Company has the right resources to continue to deliver the strategy.
Recall that Guinness Nigeria Plc reported revenue of N96.08 billion for the nine months that ended March 31, 2020, showing a fall of 5.3% compared with N101.40 billion recorded in the corresponding year of 2019.
In addition, financing cost rose by 97% to N3.582 billion compared to N1.817 billion recorded in 2019. Guinness Nigeria PLC ended the period with a profit after tax of N1.672 billion, plunging by 60% from N4.252 billion recorded in 2019.
This report has further dampened investors’ moral as its share price plunged to an all-time low of N14.20. As at the time this report was drafted, the company’s market capitalization was N32.199billion, with earnings per share standing at 1.18.
However, its price to book ratio, which is valued at 0.3571 and a dividend yield valued of 10.38% showed the stock was highly undervalued and had great potential in the long term.
You may download Guinness Nigeria’s notification of material circumstances by clicking here.
SAHCO suffers 92% decline in profit, as travel restrictions bite harder
Analysis of the company’s results indicates that revenues dipped as a result of COVID-19 travel restrictions.
Skyway Aviation Handling Company Plc (SAHCO), reported revenues of N3.1 billion in the second quarter of 2020 compared with N3.5 billion in the same period in 2019. This represents an 11.9% decrease relative to the same period last year.
SAHCO Plc, formerly known as Skypower Aviation Handling Company Plc, prior to its privatization, is 100% owned by the Sifax Group, and incorporated as an Aviation Ground Handling Service Provider under the Nigerian Company & Allied Matters Act of 1990. SAHCO Plc’s duties involve all the actions that take place from the time an aircraft touches down on the tarmac, to the time it is airborne. The company also ensures that the right assignment is carried out in an efficient, speedy, and safe manner, deploying the right tools.
A careful analysis of the latest results of the company indicates that revenues dipped as a result of COVID-19 travel restrictions. Travel restrictions affected SAHCO Plc’s operations, but an increase in revenues from domestic and foreign cargo handling gave the company a lifeline amidst business uncertainties.
SAHCO Plc has 10 revenue-generating segments: foreign handling, domestic handling, cargo handling – export, DCS/PAX handling, cargo handling – domestic, equipment rental, investment property, pilgrimage, haulage/crew bus services, and airport security services. Revenues from eight of these segments declined in Q2 2020, compared with the same period last year; however, revenues from cargo handling increased.
Revenues from cargo handling – income increased by 16.04% to N2.2 billion in the current period, compared with N1.9 billion in the same period last year. Revenues from cargo handling – export increased by 8.26% to N146.7 million in the period under review, relative to N135.5 million in the same period last year.
It is expected that performance would improve, following the lifting of foreign travel restrictions on the 5th of September 2020. However, things may not transform sooner, as there are one or two challenges facing the sector. For example, although travel restrictions have been lifted, the conditions passengers have to meet before travel, may be overwhelming for some people to go through; thus, the number of travelers is not expected to peak yet.
The Earnings Per Share (EPS) of the company declined by 92.11% in Q2 2020, from 12.67 kobo to 1 kobo, compared with the same period last year. The decline in distributable profit by 93.34% to N11.42 million in Q2 2020, relative to N171.50 million in Q2 2019, contributed to this decline.
SAHCO Plc’s shares were listed on the floor of the NSE on April 26th, 2019. The shares currently trade at N2.93 per unit. The highest price for a unit of share in 52 weeks was N4.19 and the lowest N1.42. A total of 20,391 units was sold in the last seven days trades. Shares outstanding is 1,353,580,000 units and its market capitalisation is N3,965,989,400 billion.
Nigerian Aviation Handling Company Plc (NAHCO), operates in the same sub-sector as SAHCO Plc – transport-related Services. NAHCO Plc’s share price is N2. The highest price for a unit of share in 52 weeks was N3.01 and the lowest is N1.90. A total of 8,162,828 units was sold in the last seven days trades. Shares outstanding is 1,624,218,750 units, and its market capitalisation is N3,248,437,500 billion.
With the surge in cargo revenues, SAHCO Plc recently received delivery of new Ground Support Equipment (GSE). This is expected to improve its ground power operations, in terms of cargo and passenger loading operations, as well as aircraft mobility. The newly acquired fleet of equipment consisted of 50 Cargo pallet dollies, 45 container dollies, 3 passengers step loaders, and 50 baggage tag machines. The company also recently introduced a branded Ankara uniform for its frontline operating staff. The MD of the company, Mr. Basil Agboarumi, noted that the reasoning behind the branded uniform is to showcase the Nigerian culture to the world.
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.
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.
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 107.09% from 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.
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.
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.
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.
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.
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.
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.
- Revenue decreased by 21%
- Cost of sales decreased by 19%
- Net finance costs increased by 27%
- Loss increased by 84%
Facts behind the loss
A 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 Vehicles, and 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 equipment, and Property development & facility management increased, compared with the corresponding period in 2019.
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 million. These 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.
Key issues facing the auto dealer
R.T. Briscoe has a total current assets value of N2.33 billion and current liabilities value of N17.69 billion, as 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 casts shadows on the going concern of the auto dealer, given the penalty charges from banks and court litigations from creditors.
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.