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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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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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