Economy
Economic Downturn, Elections Frustrate Sale of GSK Agbara Factory
By Dipo Olowookere
The sale of the Agbara factory of GlaxoSmithKline (GSK) Consumer Nigeria Plc in Ogun State is yet to be concluded, Business Post has learned.
In 2019, the board of the biopharma company said its manufacturing plant in Ogun State would be shut down by the third quarter of 2021 as the firm was restructuring its business model.
According to a statement released on the development, GSK said the production of its drugs and other products would be handled by a “suitable third party local manufacturer,” saying this was the best strategy to “better serve the Nigerian patients and consumers,” as this development will “not impact GSK’s broader commitments to global health in Nigeria and across Africa.”
It explained that, “This restructuring, which would be effective in Q3 2021, involves working with local contract manufacturers for the supply of GSK’s products, where possible.
“This would support the building of local expertise, transfer of technical knowledge and improve local production capacities in the country.”
Business Post gathered that the GSK Agbara factory was to be offloaded in 2022, but it suffered a setback because buyers were sceptical about the outcome of the 2023 general elections and the macroeconomic environment in Nigeria.
This forced the management to offload some parts of the factory in bits, according to the information contained in the audited financial statements of the organisation for 2022.
GSK said at the time it shut down the factory, the plant and machinery, furniture and fittings, and motor vehicles were worth N666 million, N28 million and N21 million, respectively, with plans to have them sold “within a one-year period.”
“However, due to circumstances that arose in the course of the year, which were previously considered unlikely, some of the assets were not sold as at December 31, 2022,” a note from the results stated.
Explaining the reason for this, the company said, “In 2022, the Nigerian economy took a downturn, and the negative perception of the occurrence of the 2023 general elections in Nigeria made businesses stall on making capital investment decisions which affected the sale of these assets.
“The group took necessary action to respond to the change in these circumstances through direct engagement with potential purchasers to complement the bidding approach originally planned.
“Furthermore, the assets have been impaired and are being actively marketed at a price that is reasonable to their fair value, given the change in circumstances.
“During the year, plants and machinery and motor vehicles with carrying amounts of N29.7 million and N4.8 million, respectively, were disposed of during the year through several bidding processes. Net gains of N7.1 million, which arose from the disposals, have been reported in other gains and losses in the statement of profit or loss under the non-operating segment. There are no cumulative income or expenses included in other comprehensive income relating to the assets held for sale.
“Subsequent to 31 December 2022, additional disposals with a carrying amount of N114 million have been made as at the date of approval of these consolidated and separate financial statements. Negotiations and contracting are currently ongoing with several potential buyers for the remaining assets yet to be disposed of, and the directors expect that all assets will be sold in 2023,” it said.
The 2023 general elections were conducted by the Independent National Electoral Commission (INEC), and Mr Bola Tinubu of the ruling All Progressives Congress (APC) was declared the president-elect, though his mandate is being challenged by Mr Peter Obi of the Labour Party and Mr Atiku Abubakar of the Peoples Democratic Party (PDP).
On Thursday, GSK released its financial statements for last year, and the board proposed the payment of a 55 Kobo dividend to shareholders.
This was after the organisation grew its revenue for the year to N25.4 billion from the N22.5 billion achieved in the preceding year, as the profit before tax closed at N1.2 billion as of December 31, 2022, in contrast to N945.8 million as of December 31, 2021, with the post-tax profit closing at N771.2 million compared with the previous year’s N658.8 million.
By Modupe Gbadeyanka
The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.
The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.
At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.
According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.
It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.
The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.
The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.
As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.
From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.
Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.
In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.
Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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