Economy
Ardova Positions Business for Future Growth, Cuts Borrowing Cost by 69% in 9 months
By Dipo Olowookere
Despite the huge challenges businesses across the globe, especially the oil industry, have faced this year, Ardova Plc has been able to come out stronger.
This has been made possible by the cost-optimisation, superior customer experience, operational efficiency, innovation, and strategic partnerships strategies of the board and management.
In the first nine months of 2020, the energy firm significantly reduced its borrowing cost by 69.6 per cent to N0.7 million from N2.3 billion in the same period of last year.
This was mainly due to the lower interest paid on bank loans and overdrafts in the period under consideration as N299.1 million was paid in contrast to the N1.3 billion paid last year.
Business Post reports that the superior customer experience offered by Ardova resulted in the 3.7 per cent rise in revenue to N128.2 billion from N123.6 billion, with the cost of sales up to N119.2 billion from N115.4 billion, leaving the company with a gross profit of N9.0 billion versus N8.1 billion in the same period of 2019.
In strict compliance with its cost-optimisation policy, Ardova cut is administrative expenses to N5.2 billion from N6.0 billion and this was mainly because of the reduction in board and AGM costs, personnel costs, transport and travel costs, amongst others.
In the first nine months of the year, the distribution expenses reduced to N1.6 billion from N1.7 billion and the operating profit went down to N2.9 billion from N4.2 billion.
Business Post observed that the bottom line of the results was not too palatable in the first nine months of the year, but in the third quarter, the firm bounced back into profitability.
In Q3 of 2019, the company had a net loss of N190.8 million but in Q3 of 2020, it was a net profit of N875.4 million, while the balance sheet closed very strong as the total assets closed at N49.8 billion versus N47.0 billion in FY 2019.
The CEO of Ardova, Mr Olumide Adeosun, in his reaction to the company’s performance in the period under consideration, said it “reflects our continued resolve towards operational excellence despite the challenging operating environment.”
“In the third quarter, we made significant strides in optimizing our core assets, built a resilient balance sheet, and worked extensively in positioning our business for future growth.
“Consequently, this led to increasing top-line revenue, higher margins, and improved operational efficiency.
“Specifically, our business transformation initiatives resulted in a sterling growth of over 2,000 per cent in normalized profit with operating expense ratio and gross margin printing at 5.2 per cent and 7.0 per cent,” he added.
Continuing, he said, “As a forward-thinking organisation, we will continue to explore opportunities in clean energy solutions and appraise the ever-changing downstream regulatory environment to build a socially responsible and formidable integrated downstream energy company.
“These opportunities and reforms, where required, will lead to one-off investments and collaboration with the right partners to deliver sustainable future returns to the business in the short to medium-term.”
“Overall, we are pleased with the progress we have made so far, especially in what has been the most challenging year for businesses across the globe and our industry in particular,” Mr Adeosun, who has transformed the firm since it was acquired from Mr Femi Otedola last year, stated further.
“Nonetheless, we remain committed to continue enhancing shareholder value. The focus over the coming periods will be to consolidate and build on the gains achieved and further refine our processes to ensure we achieve our set objective of superior customer experience, operational efficiency, innovation, and strategic partnerships,” he assured.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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