Economy
Africa Prudential to Sustain Diversification Strategies
By Dipo Olowookere
Managing Director of Africa Prudential Plc, Mr Obong Idiong, has said the company will continue to focus on its diversification strategies for the delivery of superior value to stakeholders.
Mr Idiong made this disclosure while reacting to the financial statements of the company for the first quarter of 2020, which were released to the investing community on Thursday.
According to him, “Our focus at Africa Prudential is still driven by our digital transformation strategies, achieving world-class superior value for all our stakeholders as we continue to pursue our diversification strategies.”
During the period under review, revenue from contracts with customers reduced by 52 percent year-on-year on the back of the drop in retainership fee coupled with a significant reduction in fee from corporate actions as a result of the postponement of clients’ AGMs and dividend payment in response to the spread of the novel coronavirus in Nigeria.
The company was, however, able to increase its revenue from digital consultancy by more than 900 percent, thereby emphasising the positive result from the company’s diversification strategy into digital technology.
On the other hand, the company recorded a 3 percent year-on-year increase in interest income driven by a 23 percent surge in the interest realized from loans and advances, thereby overriding the drop from other interest income sources.
Also, this reduced by 9 percent year-on-year, due to the 25 percent decline in profit before finance costs and tax as well as an increase in the company’s operating expenses amidst the mounting pressure on gross earnings brought about by the coronavirus-induced disruption to the company’s operations.
For Mr Idiong, the earnings were too impressive because of the COVID-19, which has forced many businesses to either shut down or operate remotely.
“Globally, this year had kicked off on an unprecedented note, with the unanticipated spread of the coronavirus disrupting economic activities all across the globe, Nigeria inclusive.
“The COVID-19 pandemic had threatened the smooth operations of our business and that of our clients’ mounting enormous pressure on our revenue sources particularly the revenue from contract with customers, the resultant effect was the reduction recorded in our gross earnings for Q1 2020.
“However, the over 900 percent surge in our digital consultancy revenue attest to the fact that we have a lot of opportunities to harness the potential inherent in our digital technology business to boost our revenue whilst upscaling our diversification strategy.
“The period under review tested our commitment to delivering value to our stakeholders while ensuring that we communicate truthfully, calmly and with resolve.
“As an organisation, we prioritize the welfare and safety of our employees and have responded proactively by implementing our Business Continuity Plan (BCP) which involves the work-from-home protocol for all our departments and business segments whilst attending to all shareholders’ request through our electronic channels.
“Further, we have commenced the full end-to-end automation of AGMs while providing technology-driven solutions for the corporate action activities of our clients.
“We will continue to offer services through our various cloud based digital platforms, sustain ongoing technological projects and adequately position for post-crisis continuity of our business operations,” the MD said.
By Adedapo Adesanya
African businessman, Mr Aliko Dangote, has said that due to Tanzania’s current reservations, there is a strong case for the planned East African Dangote refinery to be hosted in Kenya instead.
Last month, it was reported that the billionaire, alongside the presidents of Kenya and Uganda, Mr William Ruto, and Mr Yoweri Museveni, planned to build a new oil refinery in Tanzania. The project will include a pipeline that links the Kenyan port city of Mombasa to the northeastern Tanzanian harbour of Tanga, where the facility will be situated.
However, Tanzanian President Samia Suluhu Hassan last week complained angrily to her Kenyan counterpart that she had not been consulted over the earlier plan to build it on her country’s coastline.
Due to the latest development, the industrialist is now eyeing Kenya as the site of the planned 650,000-barrel-a-day oil refinery, as per the Financial Times. The facility is estimated to cost as much as $17 billion, compared to the $20 billion structure based in Lagos.
“I’m leaning more towards Mombasa because it has a much larger, deeper port,” he was quoted as saying.
“Kenyans consume more. It’s a bigger economy,” he said, adding that crude oil for the refinery could be transported by ship and need not be located near a pipeline that will carry oil nearly 1,500 kilometres from Ugandan oilfields to the Tanzanian coast at Tanga.
“The ball is in the hands of President Ruto,” he said. “Whatever President Ruto says is what I’ll do.”
Mr Dangote said he would need a lot of government protection from President Ruto, noting that it would mean land, financing, and most importantly, protection from what he called the dumping of cheap fuel from the likes of Russia or India.
“There is no refinery in the world that can survive without that protection,” he said. “If we have an agreement, we can start this year.”
Mr Dangote, who has faced multiple accusations of monopoly, built his empire in industries such as salt, sugar, flour, cement, and, more recently, petroleum, largely through a business model that benefited from government incentives, preferential foreign exchange access, and policies that limited foreign competition.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended rallied by 1.18 per cent on Friday, May 8, its fifth in a row for this week.
During the session, the market capitalisation increased by N28.96 billion to N2.488 trillion from N2.459 trillion, and the NASD Unlisted Security Index (NSI) jumped by 48.39 points to 4,158.77 points from the 4,110.38 points recorded a day earlier.
The growth witnessed yesterday was spurred by the gains recorded by six securities, led by 11 Plc, which chalked up N11.00 to sell at 221.10 per unit versus Thursday’s closing price of N210.10 per unit. FrislandCampina Wamco Nigeria Plc added N10.26 to close at N132.98 per share compared with the previous day’s N127.06 per share, and Central Securities Clearing System (CSCS) Plc rose by N2.82 to N75.90 per unit from N73.08 per unit.
In addition, Lighthouse Financial Services Plc appreciated by 7 Kobo to 86 Kobo per share from 81 Kobo per share, UBN Property Plc climbed higher by 5 Kobo to N2.25 per unit from N2.20 per unit, and First Trust Mortgage Bank Plc gained 2 Kobo to close at N2.32 per share, in contrast to the previous session’s N2.30 per share.
Conversely, Geo-Fluids Plc went down by 20 Kobo to N2.90 per unit from N3.10 per unit, and Afriland Properties Plc lost 5 Kobo to end at N16.95 per share versus N17.00 per share.
The volume of transactions for the session surged by 41.8 per cent to 528,891 units from 372,916 units, and the value grew by 11.4 per cent to N34.0 million from N30.4 million, while the number of deals slid by 7.4 per cent to 25 deals from 27 deals.
The most traded stock by volume on a year-to-date basis was Great Nigeria Insurance (GNI) Plc, with 3.4 billion units worth N8.4 billion. Resourcery Plc occupied the second spot after trading 1.1 billion units valued at N415.7 million, and the third position was occupied by Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
The most traded stock by value on a year-to-date basis was GNI Plc with 3.4 billion units transacted for N8.4 billion, followed by CSCS Plc with 60.5 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
By Dipo Olowookere
The local stock exchange reversed the previous day’s loss, with a 2.10 per cent surge on Friday as a result of demand for large-cap equities like Dangote Cement, First Holdco and others.
It was observed that apart from the insurance counter, which shed 0.37 per cent, every other sector closed higher yesterday.
The industrial goods index expanded by 7.26 per cent, the banking segment increased by 3.35 per cent, the consumer goods industry rose by 0.21 per cent, and the energy sector soared by 0.14 per cent.
Consequently, the All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited improved by 5,041.22 points to 244,775.83 points from 239,734.61 points, and the market capitalisation added N3.235 trillion to settle at N157.094 trillion compared with the preceding session’s N153.859 trillion.
The quintet of Neimeth, Cadbury Nigeria, LivingTrust Mortgage Bank, Mecure, and Dangote Cement led the advancers’ table on Friday, with 10.00 per cent growth each to quote at N9.90, N72.60, N3.52, N72.60, and N1,088.00, respectively.
On the flip side, the duo of UAC Nigeria and Industrial and Medical Gases lost 10.00 per cent each to sell for N171.00 and N42.30, respectively, as Eterna declined by 9.93 per cent to N33.55, Learn Africa slipped by 9.89 per cent to N8.20, and Deap Capital tripped by 9.69 per cent to N5.50.
The most active stock for the day was VFD Group, with a turnover of 102.9 million units valued at N1.1 billion. FCMB transacted 99.4 million units worth N1.1 billion, UBA traded 94.5 million units for N3.8 billion, Access Holdings exchanged 85.4 million units worth N2.0 billion, and Zenith Bank sold 46.5 million units valued at N5.8 billion.
At the close of trades, market participants traded 1.1 billion units worth N55.0 billion in 69,996 deals, in contrast to the 1.8 billion units valued at N72.2 billion transacted in 81,131 deals a day earlier, showing a crash in the trading volume, value, and number of deals by 38.89 per cent, 23.82 per cent, and 13.73 per cent, respectively.
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