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Companies

Lasaco Assurance Plc forecasts N375.23 million profit in Q1 2021

Lasaco Assurance Plc has predicted a rise in its profit to N375.23 million for Q1 2021.

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Lasaco Assurance

Lasaco Assurance Plc has projected a rise in its profit to N375.23 million for the first quarter of 2021 (Q1, 2021), indicating a 60% increase from the figure recorded in Q3 2020.

This is according to the firm’s recent earnings forecast sent to the Nigerian Stock Exchange market, as seen by Nairametrics.

Key highlights of the earnings forecast for Q1 2021

  • Gross premium is expected to increase to N5.44 billion, +72.1% Q-o-Q.
  • Investment income is expected to decline to N112.5 million, -46.13% Q-o-Q.
  • Underwriting expenses is expected to decline to N567.4 million, -6.4% Q-o-Q.
  • Net claims paid is expected to decline to N652 million,-53.9% Q-o-Q.
  • Net premium increased to N4.05 billion, +94.51% Q-o-Q.

Others

  • Unearned premium is projected at N2.05 billion.
  • Earned premium is projected at N2.0 billion
  • Commission received is projected at N200 million.
  • Management expenses is projected at N720.4 million.

What you should know

  • A cursory look at the earnings forecast released by the firm for Q1 2021 showed that the Head Office will contribute highest to Gross Premium projections with N2.45 billion (45%), followed by FCT/ Northern region with N870.3 million, and the direct business segment with N761.6 million.
  • The aforementioned segments make up the top three in terms of projected contributions to Gross Premium.
  • Others include South-South Region (N380.8 million), South West (N108.8 million), Special project (N108.8 million) and Agency (N54 million).

Chidi Emenike is a graduate of economics, a Young African Leadership Initiative Fellow and an Investment Foundations certificate holder. He worked as a graduate Teaching Assistant in the Federal College of Education Kano and is also a trained National Peer Group Educator on Financial Inclusion

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Companies

COVID-19, VAT, FX scarcity adversely impacted our operations in 2020 – Nigerian Breweries boss says

NB Plc’s operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase and FX devaluation.

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Heineken scoops more Nigerian Breweries shares in insider disclosure

The management of Nigeria’s leading brewer, Nigerian Breweries Plc has revealed that its operations in 2020 were adversely impacted by the COVID-19 pandemic, VAT increase, FX devaluation and scarcity of foreign exchange.

This statement was made by the Managing Director of Nigerian Breweries, Mr Jordi Borrut Bel, at the company’s pre-AGM media briefing for the financial year-end 2020, which held in Lagos this week.

He noted that the increase in the brewer’s cost in 2020 was due to the COVID-19 pandemic which disrupted the company’s operations, as well as the increase in VAT, devaluation and FX scarcity which has put pressure on input cost.

READ: Alcoholic beverage makers on NSE lose a total N27.7 billion in a single day

The Nigerian Breweries boss explained further that the increase in cost could not be fully attributed to currency devaluation and foreign exchange scarcity.

He explained that the increase in costs of goods sold, as reported in its audited financial results, could also be linked to the increase in the volume of goods sold, as the company’s sales volume in 2020 increased by almost the same percentage as the cost of goods sold.

To deal with this challenge going forward, he revealed that the company is focused on the supply chain, and will continue to seek out ways to mitigate any of the price increases coming from FX scarcity.

READ: Brewery sector: A quarter to forget

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The company’s profitability in question?

An analysis of the company’s result revealed that despite the 4.3% increase in net revenue from N323.00 billion recorded in 2019, to a total of N337.01 billion in 2020, the company’s profit declined significantly by 53.3% to N7.53 billion.

Speaking on this, Jordi Borrut in his statement at the press briefing noted that the brewer’s business performance in 2020 was quite impressive especially in the face of the COVID-19 pandemic and economic recession. Despite these challenges, the company maintained a strong and healthy balance sheet.

There was a slight reduction in profitability but compared to the previous year, the business witnessed an improved growth in revenue. The significance of this is that the business became more stable and healthier,” he said.

READ: Nigeria’s triangular beer war on the rise with the arrival of Budweiser

What you should know

  • Nigerian breweries, being the largest brewer in the country, maintained its stance in terms of generating profits year-on-year. The company emerged as the only brewer to record a profit of N7.37 billion from its operations in 2020, 54.3% lower than 2019 figures (N16.1 billion).
  • From this, the leading brewer was able to pay shareholders a total dividend of N7.5 billion, translating to a dividend of 94 kobos per share – a dividend payout in which exceeds 100%.
  • While Guinness and International Breweries made a loss of N12.6 billion and N24.9 billion respectively, this reality impacted their ability to pay their shareholders dividends in 2020.

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Business News

Highest paid Nigerian bank MD/CEOs of 2020

Bank MD/CEOs in Nigeria earned a combined N1.5 billion in salaries in 2020.

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The banking sector, especially commercial banks, is one of the most profitable sectors of the Nigerian Economy churning out profits of close to a trillion in 2020 alone. They are also one of the highest employers of labours in the country employing over 93,000 Nigerians.

Sitting at the helm of affairs is the Chief Executive/Managing Director, the highest-ranking executive in the organization saddled with the responsibility of making the best corporate decisions, oversight of the execution of the organisation’s corporate strategies and most importantly increasing the shareholders’ return. The buck basically stops on their table.

Thus, these enormous responsibilities also come with a considerable executive compensation for their service making them ostensibly the highest-ranking staff of the bank.

READ: Jim Ovia: From a clerk to founder of Nigeria’s most profitable bank

In typical Nairametrics fashion, we bring to you a list of the highest-ranking bank CEOs for 2020 based on their executive compensation (exec comps). The bank MD/CEOs under our review earned over N1.5 billion in salaries in 2020.

The data was sourced from the published audited accounts of the bank and verified by Nairametrics Research.

 

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