Japaul Gold stocks slump by as much as 30% in three trading sessions, as investors on NSE continue to sell off shares of the rebranded Gold exploration and mining company, after rallying by 146% in 11 days.
It is important to note that the shares of the rebranded and restructured company with a new focus on Gold exploration as its new name suggests, rallied to a record 52-week high of N1.67 on Monday, as buying pressures moved year-to-date gains to 169.4% at mid-day.
However, profit-taking activities by investors saw the shares of the company dip by 15% from N1.67 to close the market on Monday 25 kobo lower at N1.42.
A preview of the performance of the shares of the company by Nairametrics at the close of trade on the exchange today revealed that Japaul shares slumped by 30.5% from its 52-week record high price of N1.67, which was recorded on Monday 18th January 2020, to N1.16 at the close of trade on the exchange today.
What you should know
- As investors continue to price the shares of Japaul Gold down, it is important to note that the management and the board of the company have taken avid steps to restructure the company and place it on the path of sustainable growth.
- One of these efforts is the recent restructuring of the business model of the company. In line with this, a Nairametrics report revealed that Japaul Gold signed a partnership contract with H&H Mines Limited to mine gold. The company had also concluded discussions and received approval in principle from representatives of H&H Mines Ltd for Japual Plc to invest in and/or acquire some shares of the company.
- The company had also taken proactive actions to reduce debts and cut down on deadweight costs which impacted the profit of the company in the past.
- A recent report by Nairametrics revealed that Japaul Gold in recent times had erased what was left of its debt, and also cleaned up its balance sheet from negative equity of N35.5 billion. The company’s net assets is now N4.78 billion.
What to expect
A decline in the shares of the company is expected tomorrow as over N28.9 million units of the company’s shares, worth N33.5 million were offered today at N1.16 without a single bid.
This suggests that investors will likely offer the shares of the company at a lower price tomorrow to avoid being trapped, as the shares of the company continue to shed value.
BUA commences legal action over allegations of involvement in $20 million bribe scandal
BUA has urged stakeholders and the public to disregard malicious, baseless allegations circulating in some news media concerning its OML 110.
The management of BUA Group has commenced legal actions against parties involved in spreading spurious allegations of corruption and involvement in a $20 million bribe scandal.
The leading conglomerate revealed that the corruption allegations which were published by some Nigerian news channels allegedly attributed to a purported statement by Alhaji Ibrahim Mai Deribe and Cavendish Petroleum with respect to BUA’s OML 110 as false, defamatory, malicious and libellous.
According to the statement published by the management of BUA, the Group had been duly contacted by Cavendish Petroleum as well as the alleged writer of the statement, Alhaji Ibrahim Mai Deribe and both parties have told BUA on the record that neither Cavendish, the Mai Deribe Family nor any of its Executives put out such a malicious statement.
The Group noted that the statement was made with the clear intent to impugn the integrity and reputation of BUA Group and its Chairman, Alhaji Abdul Samad Rabiu.
BUA fingers Kainos MD as instigator of false allegations, commences legal action
An inhouse investigation conducted by the Group revealed that the source of the fraudulent news is Mr James Onyejekwe, the MD of Kainos Exploration and Production.
In reaction to this, BUA has therefore instructed its legal team to immediately commence criminal defamation proceedings against the MD of Kainos, the said originator of the malicious letter fraudulently attributed to Alhaji Ibrahim Mai Deribe, with damages.
The legal action will also extend to the online blog, blazenews.com.ng – which first published the unsubstantiated malicious news without a careful fact check in their duty of journalistic care, to confirm and clarify the source of such a weighty allegation.
The Group believes these actions are necessary, in order to protect the name and reputation of the manufacturing conglomerate, noting that there is no reason why Mr. James Onyejekwe of Kainos Exploration and Processing would single out BUA in a supposed business dispute which had no link to the BUA Group in its entirety.
Dangote Sugar, sweet in more ways than one
Significant growth in gross revenue was driven largely by sale to Nigerian Bottling Company Limited and Seven-Up Bottling Company Limited.
By refining capacity, Dangote Sugar Refinery Plc (DSR Plc) is acknowledged as the largest Sugar Refinery in sub-Saharan Africa and one of the largest in the world. With up to 60 percent market share, it is also clearly, the most dominant player in the Nigerian sugar market.
DSR Plc recently released its audited Financial Statements for the year ended December 31, 2020 and overall and year-on-year group performance results were very good.
Despite the impact of the Covid-19 induced lockdown which curtailed distribution across the country and resulted in decreased revenues from income generated from freights, gross revenues increased by over 33 percent year-on-year to ₦ 214.3 billion. The significant growth in gross revenue was driven largely by a rise in revenue from the sale of its 50kg sugar, with the two main customers being the Nigerian Bottling Company Limited and Seven-Up Bottling Company Limited who operate principally from Lagos.
Year-on-year, gross profit increased by over 40 per cent to ₦ 53.75 billion, Profit before tax increased by almost 53 per cent to ₦ 45.62 billion, and Profit after tax increased by 33 per cent to ₦ 29.78 billion.
Notwithstanding the good result, the group operating results showed some issues and headwinds. First, during the year, DSR Plc wound up Dangote Niger Sugar Limited (one of four companies that had been set up to acquire large expanse of land and locally grow sugarcane as part of its concerted backward integration project). The winding-up was sequel to continued community dispute over land acquired in Niger State for this purpose. This winding-up event cost DSR Plc approximately ₦ 100 million.
Second, there continues to be a heavy reliance on Lagos for its gross revenues as revenues generated from Lagos State increased significantly from circa 33 per cent at the end of 2019 to over 50 per cent by the end of 2020. The share of the Lagos segment in gross revenue thus continued to grow and currently represents a significant market concentration risk for DSR Plc.
Third, provision for impairment on financial assets or in simple terms, receivables that are unlikely to be collectable, also trended upwards from ₦ 1.3 billion in 2019 to ₦ 1.45 billion by end of 2020 with net financing expenses also rising significantly from ₦ 516.2 billion in 2019 to ₦ 1.92 billion by the end of 2020. This rise in expenses was largely driven by a significant rise in exchange losses incurred in the ordinary course of business, rising from about ₦ 7 million in 2019 to over ₦ 1.57 billion at the end of 2020.
Finally, administrative expenses represented mainly by employee salaries grew year-on-year by over ₦ 1.2 billion.
With the recent reopening of land borders, we expect that revenues and margins will become squeezed as sales and production volumes become constrained by the influx of largely smuggled, lower quality, and much cheaper sugar and its substitutes. DSR Plc’s sugar refinery is also strategically located very close to the Apapa port and its logistics operations, distribution of raw materials and delivery of finished goods will continue to be impacted by the infamous Apapa Traffic Gridlock and road diversions/closures around the axis. Although the effort of Lagos state and the recent introduction of the electronic call up of truck by the NPA has eased the issue, still, it needs to be watched closely.
Earnings per share at the end of 2020 was ₦ 2.45 (2019: ₦ 1.87; 2018: ₦ 1.85)
Subject to approval at its forthcoming Annual General Meeting, DSR Plc board of directors have proposed a dividend of N1.50k per ordinary share (2019: ₦ 1.10k, 2018: ₦ 1.10k).
This performance is sweet in more ways than one.
Nairametrics | Company Earnings
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