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Company Results

Africa Prudential suffers revenue drop as Covid-19 bites contracts business

The company’s interest income grew by 12.45% to N1.28 billion as against N1.14 billion in H1 2019.

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Obong Idiong, Africa Prudential Plc

Registrar firm, Africa Prudential Plc, released its 2020 half-year results which showed a revenue decline of 7% year on year. The company reported a revenue of N1.8 billion during the year, as revenue from contract with customers, one of its major business segments, recorded a revenue drop of 32% year on year.

The company blamed the weaker performance on COVID-19 which wiped out its income from retainership fees. Last year, retainership fees contributed about 61.4% of revenues from contracts with customers. Note that businesses that engage in contract of services on retainership basis have been badly affected by the pandemic, as a lack of business activities means services are cut by clients in line with business continuity initiatives.

According to the company, “during the period under review, revenue from contracts with customers contracted by 32.12% year-on-year on the back of the effect of COVID-19 on the business landscape. This led to a 100% drop in retainership fee in the first half of the year. However, the company was able to increase fees from corporate actions by 34.87%, register maintenance by 32.81% and digital consultancy by 94.33% year-on-year. Also, a quarter-on-quarter analysis shows that the company has been able to improve revenue from fees from corporate actions by 1791.87% and register maintenance by 171.39% QoQ”

Financial services firms are expected to report weaker earnings in the second quarter of the year mostly due to the economic shutdowns induced by COVID-19. Africa Prudential was affected by the spate of corporate annual general meetings being moved online via zoom in compliance with social distancing.

With clients having gotten a taste of just how efficient and reliable online tools like Zoom can be, service-based businesses like Africa Prudential may now have to seriously consider focusing more on digital-enabled services in order to remain profitable.

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Meanwhile, despite the drop in the company’s revenues from contracts year on year, it did better quarter on quarter having risen 249%. Ironically, most of the N490 million in revenue from contracts came in the second quarter of the year.

The company Obong Idion also commended on the impact of Covid-19 on his company’s business.

“Our Q1 results showed the impact of the pandemic on our business, however we have been able to put in place structures to help us maximize the current business cycle. Through this structure we were able to achieve an impressive quarter-on-quarter results, increasing gross earnings by 52% and PAT by 144%. We were also able to deliver an improved result year-on year, growing interest income and PAT by 12% and 5% respectively. As the company continues to observe safety measures to ensure the safety of staff and customers, we have enhance our virtual channels to meet the needs of our various categories of customers while reducing the need for physical visits significantly.”

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Digital consultancy, a growth area for the company, also surged 94% year on year. The digital consultancy business segment reported a N54 million revenue in 2019 and is expected to be the frontier for the company’s blockchain-driven software as a service business model.

Africa Prudential reported a half-year earnings per share of 54 kobo compared to 51 kobo during the same period in 2019. Africa Prudential’s stock closed today’s trading session on the Nigerian Stock Exchange with a share price of N4.12 after gaining +0.11 to increase from its N4.01.


You may download the financial statement right here.

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Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Company Results

2020 Q2 Analysis: Conoil Plc, hanging by the thread

Conoil must stay aware and strive in Q3 to maintain a positive net cash position.

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Conoil Plc, NSE, Conoil Plc's shares, NSE suspends shares from trading shares, Conoil Plc declares dividend payment for FY 2019, announces AGM soon

A profit decline worth over N600 million within a 1-year period is more than enough to throw any concerned shareholder in a frenzy. Sadly, this is the reality for Conoil Plc, according to its latest unaudited earnings report.

The company’s Q1 2020 result seemed impressive, with about N260 million worth of profit after tax (PAT) reported. Ideally, this ought to have been a sign of good performances for the subsequent quarters of the year. Unfortunately, this hasn’t quite been the case.

The appalling nature of the second quarter (Q2) results was partly caused by the COVID-19 pandemic, as well as the recent reduction in fuel pump price by the federal government. As you may well know, the virus hit Nigeria at the start of April 2020, thereby ushering Q2 economic activities and operations into a compulsory lockdown. These notwithstanding, no one could have anticipated a revenue plunge 70% deep in the span of 6 months between Q1 and Q2.

Conoil Plc has an impressive reputation as a market leader playing in Nigeria’s downstream oil and gas sector. Due to the company’s positioning in the downstream sector, it is seldom directly affected by events in the often volatile global oil market… until now.

The Nigeria-based company was also hit hard when the federal government decided to allow market forces to determine the price of the pump in the country. The price was reduced to 125p/ltr from 145 p/ltr in late March this year. This contributed to the derisory N19.3 billion posted as Q2 revenue.

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The oil giant is in the business of marketing, distributing, and manufacturing under three business products, representing its operating segments. They market refined petroleum products and manufacture lubricants and household Liquified petroleum gas (LPGs) for domestic and industrial use. The three segments; White products (PMS, DPK, LPFO AGO), Lubricants, and Liquefied petroleum gas (LPG), individually and respectively experienced poor turnover in Q2.

Worst quarter

Conoil’s recently released financial statement exposes arguably its worst Q2 figure in a couple of years, with Profit after tax (PAT) standing at a paltry N78.3 million. This pales significantly in comparison to Q1 PAT figure of N260 million representing a colossal 70% negative change and an 88.9% decline when compared to Q2 of 2019 with PAT of N707 million.

Revenue for the H1 peaks at N57.5 billion (although comparatively way below H1 2019 at N72 billion YoY) with Q2 Contributing a meager 16% N19.3 billion. Fundamental analysis of the financials, exposes that the sporadic shrink in turnover for Q2 could be attributable to these two major reasons. Firstly, the general lull in economic activities sponsored by the COVID-19 pandemic. This affected CONOIL’s marketable segment, halving the sales figures for white products by approximately 50% from N36.5 billion to N18 billion in Q1 & Q2 respectively. Manufactured lubricants also experienced a 7.7% dip in Q2 at N1.2 billion from N1.7 billion in Q1.  The second cause as hitherto stated was the reduction in fuel pump price N145 to N125, for the first time since 2016.

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The impact of such a decline in revenue is humongous. It questions the company’s ability to effectively service its debt obligations in the next quarter as well as providing adequate cover for its cost of sales and other expenses.

Investors are reputed to be ruthless pragmatics who accord more importance to the fine-prints than selling price when making purchasing decisions. Thus they often would place emphasis on the statement of cash flow as opposed to the income statement.

Conoil must stay aware and strive in Q3 to maintain a positive net cash position since Q1 & Q2 bear negative balances of N2billion and N1.2billion respectively. Negative cash flow is always a worrying omen. With current ratio for Q2 at 1.47:1 indicating the Oil giant’s relatively unconvincing ability to comfortably settle its liquidity problems if they arise.

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Company Results

Airtel is partnering Standard Chartered Bank as it expands its fintech business

The partnership will enable Airtel to provide increased access to mobile money services to customers.

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Raghunath Mandava, Airtel Africa

Airtel Africa Plc is expanding its fintech business. Earlier this morning, the company announced that it had just entered into partnership with Standard Chartered Bank.

Details of the partnership

The aim of the partnership is to enable the telecoms operator to deepen its financial inclusion drive across its key markets.

A corporate disclosure that was signed by the Company Secretary, Simon O’Hara, as seen by Nairametrics, noted that the partnership will enable Airtel to provide increased access to mobile money services to customers.

Standard Chartered and Airtel Africa will work together to co-create new, innovative products aimed at enhancing the accessibility of financial services and, ultimately, better serve people across Africa. In line with this, Airtel Money’s customers will be able to make real-time online deposits and withdrawals from Standard Chartered bank accounts, receive international money transfers directly to their wallets, and access savings products amongst other services,” the statement by the company said.

READ MORE: Data War: MTN gains 8.18 million subscribers, as Airtel edges Glo, 9mobile in 2019

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New products for Airtel Money customers

The statement further noted the following:

  • The partnership will enable Airtel to expand the range and debt if its fintech business arm –Airtel Money.
  • New products and services will be launched at targeted primarily at Airtel’s 19 million customer base.
  • The ultimate aim is to encourage the adoption of mobile money whilst engendering the financial inclusion goal of the CBN.

Chief Executive Officer of Airtel Africa Plc, Raghunath Mandava, commented on the partnership with Standard Chartered Bank saying:

Our relationship with Standard Chartered boosts financial inclusion across the continent, giving millions of people access to valuable banking services. We continue to invest heavily in cashing in and cashing out locations for our customers and increase our distribution. This means that our customers can now send or receive digital payments via Standard Chartered Bank directly to their mobile phones, as well as cash-out their funds at our exclusive kiosks and branches at their convenience. This highlights Airtel Africa’s commitment to providing affordable, innovative, best-in-class solutions to enhance the daily lives of our customers.”

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READ MORE: Airtel partners Western Union to expand its own mobile money service 

This is an interesting development…

A 2019 article by Nairametrics quoted research reports which estimated that about 73.2 million Nigerians (i.e., 41.6% of the adult population) are financially excluded. That’s a lot of people for a country like Nigeria. But the interesting thing is that consistent efforts are being made to collapse the gap.

This effort started off with the primary players in the Nigerian fintech space. Soon, banks caught the buzz and quickly aligned with the mission. Now, telcos like Airtel and if course MTN are also positioning themselves as major players.

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Now, here’s the interesting thing about telcos’ foray into fintech – the fact that they already have the customer base and the technological advantage. These are competitive advantages that could see them replicating the same success that was first recorded in Africa by Kenyan Telco Safari on with its M-Pessa project.

As more players emerge in the Nigerian mobile money/fintech space, there is bound to be competition. However, the good thing is that the market is big enough for all to play. The important thing is about offering the best possible service to customers and ensuring that they are financially included.

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Company Results

Sterling Bank reveals N215 billion sequestered by CBN as CRR Debits

Sterling Bank Plc, one of Nigeria’s tier 2 banks reported that the Central Bank of Nigeria’s CBN restricted about N215.5 billion of its customer deposits as of June 2020.

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Sterling Bank

Sterling Bank Plc, one of Nigeria’s tier 2 banks reported that the Central Bank of Nigeria’s CBN restricted about N215.5 billion of its customer deposits as of June 2020.

The bank reported this in its 2020 half-year interim results published on the website of the Nigerian Stock Exchange. According to the data, Sterling Bank’s confirmed the amount of its customer deposits now held by the CBN is about N215.5 billion and explained it “represent mandatory reserve deposits and are not available for use in the bank’s day-to-day operations” which can be interpreted as Cash Reserve Requirement “CRR”.

READ ALSO: CBN debits banks another N459.7 billion for failure to meet CRR target

Sterling Bank Data

  • Deposits from Customers – N915.3b (N892. 6billion)
  • Loans to customers – N615 billion (Dec 2019: N618.7 billion)
  • Sterling Bank CRR – N215.5 billion (Dec 2019: N122.1 billion)
  • Sterling Bank got debited N93 billion so far this year
  • This breaks down to about N71.1 billion and N21.9 billion debited in the first and second quarters respectively.
  • CRR as a percentage of deposits as at June 2020 – 23.5%

READ MORE: As AMCON nears possible ‘liquidation’, what should we expect?

CBN CRR Policy

The central bank of Nigeria increased its cash reserve requirement (CRR) to 27.5% from 22.5% at the monetary policy committee meeting held on January 23rd to 24th. The CRR is the amount the CBN debits from banks accounts in compliance with its monetary policy objective of mandatorily keeping cash on behalf of banks. The amount is not available for banks to use.

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Sterling Bank Results

The Bank also published its 2020 second-quarter results showing net interest income was up 16% to N18 billion.

  • Pre-tax profits also rose 24% YoY to N3.3 billion despite the Covid-19 pandemic induced economic lockdowns.
  • Despite the improved profits, the bank did report a spike in its provisions for impairments jumping almost 3 folds to N5.3 billion.
  • To put this into context, Sterling Bank suffered an impairment of N5.8 billion in the whole of 2019.
  • Sterling Bank’s cost to income ratio remains high at about 86%.

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