Economy
Nestle Nigeria Q1’20 Profit Drops Despite Lower Finance Costs
By Dipo Olowookere
It was not really a palatable moment for Nestle Nigeria Plc in the first three months of 2020 going by the financials of the company for the period.
According to its Q1’20 earnings, the revenue generated in the first 90 days of the year slightly depreciated to N70.3 billion from N71.0 billion in the same time of the prior year.
Nestle Nigeria, which trades its shares on the local stock exchange, said its costs of sales declined to N38.7 billion from N39.5 billion, with distribution, sales and marketing expenses rising to N11.0 billion from N10.4 billion.
In addition, the administrative costs rose to N3.1 billion from N2.0 billion, while investment income dropped to N335.2 million from N504.0 million.
However, the gross profit marginally increased to N31.7 billion from N31.5 billion, while operating profit decreased to N17.5 billion from N19.1 billion, with finance costs at N417.9 million, lower than N469.4 million in Q1 2019.
A look at the bottom-line of the results indicated that Nestle Nigeria posted a profit before tax of N17.5 billion in the first quarter of 2020 in contrast to N19.1 billion in the same period of 2019 and a profit after tax of N11.2 billion versus N12.9 billion, with an earnings per share (EPS) of N14.21 in Q1 2020 versus N16.21 in Q1 2019.
On its cash flows, the firm said it recorded N21.5 billion as cash flow from operating activities in the first three months of this year compared with N16.2 billion in the corresponding period of 2019.
Also, the net cash generated from operating activities was N21.1 billion as against N16.0 billion.
Commenting on the results, Nestle Nigeria said, “As the COVID-19 pandemic continues to have an impact on a global level, we have three key priorities as a company: safeguarding the health and wellbeing of our people, ensuring business continuity to meet consumer needs and supporting communities with relief efforts.
“Nestlé Nigeria is working closely with the government, health authorities and other private sector players to respond to the challenge.
“For the company’s March 31, 2020 financial statements, the Coronavirus outbreak and the related impacts are considered non-adjusting events as the company has a robust business continuity plan in place to ensure an uninterrupted supply of essential food and beverages.
“Consequently, there is no impact on the recognition and measurement of assets and liabilities.
“Due to the uncertainty of the outcome and duration of the current events, it is too early to quantify the overall impact of the outbreak on the company’s financial position, results of operations or cash flows in the future.”
By Dipo Olowookere
Last week, investors bought and sold 6.617 billion shares worth N113.224 billion in 109,590 deals compared with the preceding week’s 4.140 billion shares valued at N115.889 billion traded in 102,351 deals.
It was observed that ICT stocks led the activity chart with 3.500 billion units worth N17.759 billion traded in 11,184 deals, contributing 52.89 per cent and 15.68 per cent to the total trading volume and value, respectively.
Financial equities transacted 2.625 billion units for N50.188 billion in 42,574 deals, and services shares recorded 104.524 million units valued at N1.166 billion in 7,255 deals.
eTranzact, Cornerstone Insurance, and Access Holdings accounted for 4.871 billion shares worth N27.422 billion in 6,438 deals, contributing 73.60 per cent and 24.22 per cent to the total trading volume and value, respectively.
In the week, 55 equities appreciated versus 38 equities in the previous week, 29 equities depreciated versus 36 equities a week earlier, and 63 equities closed flat versus 73 equities in the preceding week.
NCR Nigeria was the best-performing stock after it gained 33.03 per cent to sell for N72.70, UAC Nigeria appreciated by 22.69 per cent to N96.80, Guinness Nigeria expanded by 18.56 per cent to N198.00, Dangote Cement rose by 15.02 per cent to N614.90, and Nigerian Breweries grew by 12.36 per cent to N75.00.
On the flip side, RT Briscoe was the worst-performing stock after it lost 12.79 per cent to N3.00, Legend Internet slipped by 10.71 per cent to N5.00, Union Dicon shed 10.00 per cent to N6.30, ABC Transport declined by 9.88 per cent to N3.10, and Cornerstone Insurance went down by 9.33 per cent to N5.50.
According to data from the bourse, the All-Share Index (ASI) increased by 2.45 per cent to 147,040.08 points and the market capitalisation added 2.67 per cent to settle at N93.722 trillion.
In the same vein, all other indices finished higher apart from the energy and commodity indices, which depreciated by 0.57 per cent and 0.30 per cent, respectively.
By Dipo Olowookere
A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.
Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.
However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.
At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.
UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.
On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.
A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.
Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.
The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
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