By Modupe Gbadeyanka
Dangote Flour Mills Plc has returned to profitability after four years of losses, declaring a profit before tax of N11.82 billion for its financial year ended December 31, 2016 in contrast to the N12.5 billion it lost in the corresponding year of 2015.
A review of the results released on the floor of the Nigerian Stock Exchange (NSE) showed that the firm’s operating profit went up to N16 billion compared to a loss of N8.6 billion posted at the preceding year.
In the same vein, profit after tax went up to N10.6 billion in contrast to N12.5 billion loss it declared in 2015.
Similarly, revenue went up by 120 percent from N48 billion to N105.8 billion, while gross profit increased by 556.8 percent to N29 billion compared to N4 billion in 2016. Capital market analysts described the company’s performance as heart-warming given that the company had recorded losses in the past.
Dangote Flour Mills consist of Dangote Flour, Dangote Pasta, and Dangote Noodles. It was sold to Tiger Branded Consumer Goods, but later reacquired and re-positioned for good results.
Having reacquired the flour mills, the new board of directors and management started a restructuring process.
Speaking on the repositioning, the chairman, Dangote Flour Mills, Mr Ighodalo Asue, stated that, “We bought back Dangote Flour Mill from Tiger Branded Consumer Goods and by this move, it means we have a stronger, better, sophisticated and more focused Dangote Flour Mills.
“Since the takeover, we have taken a lot of steps to reposition the company through expansion to drive growth.
“We are also using this medium to restate our commitment to increasing our shareholders.”
The group chief executive officer, Dangote Flour Mills, Mr Thabo Mabe, attributed the return to profitability to several strategies adopted by the company to increase market share and create value for shareholders.
He noted that the Dangote Flour Mills was driven by the vision of putting its products on the table of every Nigerian.
Oil Prices Mixed Amid Weakening US Dollar
By Adedapo Adesanya
Oil prices were mixed on Tuesday despite drawing support from a weakening US Dollar, with Brent futures contract down by 37 cents to $84.53 per barrel and the US West Texas Intermediate (WTI) crude up by 92 cents or 1.2 per cent to $78.82 a barrel.
The US Dollar index turned negative after data showed labour costs increased at their slowest pace in a year in the fourth quarter. This occurred as wage growth slowed, bolstering expectations of the US Federal Reserve slowing its interest rate increases.
Investors expect the Fed to raise rates by 25 basis points on Wednesday, with increases of half a percentage point by the Bank of England and European Central Bank the following day.
The rate increase expected at the Federal Open Market Committee’s January 31- February 1 meeting would bring the policy rate to the 4.5 per cent – 4.75 per cent range; that’s two quarter-point rate hikes short of the level most Fed policymakers in December thought would be sufficiently restrictive to bring inflation under control.
Economists at UBS expect the US Dollar to travel along a weaker path, with limited and short-lived bouts of strength.
“The Fed is getting closer to the end of its rate-hiking cycle. With markets growing comfortable with a terminal fed funds rate close to or at 5 per cent, and US inflation likely to quickly roll over in the first half of this year, downward pressure on the USD should continue to mount,” they said in a note.
The Organisation of the Petroleum Exporting Countries (OPEC) panel will likely recommend keeping the group’s output policy unchanged when it meets at 2 pm (Nigerian time) on Wednesday.
Meanwhile, a Reuters survey showed 49 economists and analysts expect Brent crude to average more than $90 a barrel this year, the first upward revision since October, with gains likely driven by demand from the world’s second top consumer, China.
China has been easing stringent COVID-19 restrictions this month, with the country reopening borders for the first time in three years.
Analysts noted that China’s reopening is supporting demand prospects for oil.
Economy in Danger, Nigerians Suffering—Lagos Assembly
By Aduragbemi Omiyale
The Lagos State House of Assembly has accused the Central Bank of Nigeria (CBN) of compounding the woes of Nigerians through the Naira redesign policy, which it said has also put the economy in danger.
Speaking through its Speaker, Mr Mudashiru Obasa, the Lagos Assembly commended the National Assembly for putting pressure on the Governor of the CBN, Mr Godwin Emefiele, to ensure that Nigerians would still be able to take their old currency notes to the banks after the current deadline of February 10, 2023.
At the plenary on Tuesday, legislators in the state parliament noted that even though the policy was a good one, its timing was wrong as it had further thrown the country into economic chaos, which could become difficult to resolve if urgent steps are not taken.
Mr Obasa noted that the concern of the lawmakers had to do with the pains, anguish and anger spreading among Nigerians over their inability to access the new currency.
“Economists have said most times you cannot use new currency to control inflation, it doesn’t achieve the purpose most times,” Mr Obasa said, adding that the intention of the policy, as claimed by CBN, had been defeated owing to the various complaints from experts and people across the country.
The Speaker said the CBN should have engaged stakeholders while citizens should have been adequately carried along rather than an ‘overnight’ policy by the apex bank.
“There are people in the rural areas. It is obvious that the additional 10 days are not even going to be enough.
“The idea is a good one, but the way it is being implemented will have an adverse effect on the people.
“We need to commend the National Assembly for showing quality representation and prompt action to intervene for an extension of the deadline,” he noted.
The Speaker said that in other countries, old currencies are not discarded in a rush but allowed to fade out of the system gradually.
Mr Rotimi Olowo, the lawmaker representing Somolu Constituency 1, who moved the motion, sought an extension of the deadline till July 2023 in line with the resolution of the National Assembly while noting the suffering the policy had brought on Nigerians.
He complained about the unavailability of the new notes and the effect on the people, including small business owners and those in rural areas.
Contributing to the motion, the chairman of the House Committee on Public Account, Mr Saka Solaja, argued that financial policies are not implemented the way the CBN had gone about the Naira redesign.
“We see videos of people beating themselves mercilessly at ATMs, yet there is no money,” he lamented while supporting the call for an extension of the deadline by the CBN.
On his part, Mr Richard Kasunmu argued that the timing of the policy was not right, especially as the country was still grappling with challenges of effective internet connectivity.
He recalled how he spent five hours a day earlier trying to make an electronic transfer of N55,000 to resolve an emergency situation.
“We should be looking at the larger Nigerian people. If we want to survive the Nigerian economy, this should not be a good time for such policy,” he said.
On his part, Mr Victor Akande stressed that Mr Emefiele breached a part of the CBN Act concerning the policy, while his colleague, Mr Setonji David, noted that, “All over the world, CBN governors are economists, not bankers like Emefiele.
“Our people are suffering, and the money can’t be found at the ATMs. If you go to the ATMs, you would see how people are struggling,” he lamented.
Emefiele Says Banks Will Accept Old Naira Notes After Deadline
By Dipo Olowookere
The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has confirmed that Nigerians who could not deposit their old Naira notes before the deadline would not lose their funds.
Speaking on Tuesday when he appeared before an ad-hoc committee of the House of Representatives chaired by Mr Alhassan Ado Doguwa, he said banks will continue to accept the old N200, N500, and N1,000 notes after February 10, 2023.
Nigerians were earlier given till Tuesday, January 31, 2023, to swap their old currency notes for the newly redesigned banknotes.
But after much pressure, the CBN obtained approval from President Muhammadu Buhari to shift the deadline forward by 10 days.
Last week, the Speaker of the House of Representatives, Mr Femi Gbajabiamila, threatened to sign a warrant of arrest on Mr Emefiele over his refusal to appear before the lower chamber of the parliament to explain the policy to lawmakers.
On Monday night, while speaking on a television programme monitored by Business Post, Mr Doguwa said the House would expect the CBN chief to appear today or risk being arrested by the police.
This morning, he was at the National Assembly to face the lawmakers, and during his speech, he said banks would continue to accept the old notes after the deadline in line with section 20, subsection 3 of the CBN Act, which says even after the old currency has lost its legal tender status, the bank is mandated to collect those monies.
“In agreement with the House of Representatives resolution and subject to section 20, subsection 3, which says even after the old currency has lost its legal tender status, that we are mandated to collect those monies. I stand with the House of Representatives on this.
“What does that mean? It means if you have monies you are unable to deposit to your bank after the expiration, we certainly will give you the opportunity to bring them back into the CBN, we redeem it and pay it into your bank account, or we exchange it. In that case, you do not lose your money.
“I want to appeal to you, this is not an easy exercise, but we are happy that in 19 years, we are able to carry out this important part of our mandate. We are grateful that we are doing it. We want the support of all Nigerians,” Mr Emefiele said.
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