Economy
Ellah Lakes Works to Improve Cash Flow, Pay Dividends
By Dipo Olowookere
Shareholders of Ellah Lakes Plc may soon begin to get a reward for their loyalty and investment in the company as the board and management are working hard to make them smile.
Ellah Lakes is one company on the exchange struggling to remain afloat and at the moment, it is undergoing a transformation after a change of management.
The new team led by Mr Chuka Mordi is optimistic that the business will return to profitability and reposition itself as a leading agribusiness player in West Africa.
Recently, the firm sealed an agreement with the Ondo State Government for the joint development and management of 5,000 hectares of land for the cultivation of oil palm and cassava.
On Wednesday, the management of Ellah Lakes was at the Nigerian Exchange (NGX) Limited to present its 2019/2020 financial year to capital market stakeholders on the Facts Behind the Figures platform.
At the virtual event hosted by the Divisional Head of Listings Business at NGX, Mr Olumide Bolumole, the Chief Agronomist at Ellah Lakes, Mr Jamie Rixton, said the main focus of the management at the moment is to improve the cash flow of the organisation and ultimately start paying dividends to shareholders.
In his contribution, the MD of Ellah Lakes, Mr Mordi said the company is also “working together with our advisers and the exchange on ensuring that the required free float percentage is achieved in the shortest possible time.”
He assured shareholders that efforts would be made to give them value for their money, noting that, “From a corporate governance point of view, we hold ourselves to high standards of governance as expected by our shareholders and regulator, and as is befitting of our vision to become the leading supplier of sustainable edible oils and starch to the FMCG industry in Nigeria, particularly, and West Africa, in general.”
“Prior to 2019, Ellah Lakes Plc was an insolvent entity on NGX. Later that year, Telluria Ltd completed a reverse acquisition of the company, recapitalising the balance sheet and repositioning the business for growth with a new board and management team.
“Today, we are undergoing a restructuring exercise, which will return the business to profitability and reposition it as a leading agribusiness player across West Africa,” he assured.
Earlier in his remarks, Mr Bolumole commended the management for the progress recorded so far, adding that he was impressed that the team found it worthy to update the market about their plans.
“Given that the market is driven by timely, relevant, and accurate information, interactions with the market are vital for transparency, price discovery and overall performance of securities. I must, therefore, commend the board and management of Ellah Lakes for partaking in this Facts Behind the Figures,” he said.
“Given the invaluable contributions of the agricultural sector to the Nigerian economy, Ellah Lakes Plc continues to exploit the opportunities in the sector.
“The company’s recent agreement with the Ondo State Government for the joint development and management of 5,000 hectares of land for the cultivation of oil palm and cassava highlights its drive and commitment towards creating value for shareholders,” Mr Bolumole added.
“On our part at NGX, we continue to implement policies aimed at strengthening the corporate governance of our listed companies and providing products, services and platforms that are aligned to issuers’ and investors’ requirements in a fair and orderly market,” the NGX top shot promised.
The NGX Fact Behind The Figures presentation provides our listed companies with the opportunity to inform the market of their financial performance as well as other strategic and operational developments.
Since the activation of remote trading and working from home in March 2020, NGX has transitioned this engagement into a virtual session thereby opening up the platform to more participants across the capital market ecosystem.
By Dipo Olowookere
A 0.38 per cent loss was suffered by Nigerian stocks on Tuesday on the back of continued selling pressure from investors embarking on profit-taking.
Data from the Nigerian Exchange (NGX) Limited showed that the contraction was influenced by the 1.78 per cent decline recorded by the insurance sector, the 0.24 per cent slip printed by the consumer goods index, and the 0.09 per cent drop posted by the energy space, offsetting the 0.75 per cent growth achieved by the banking sector and the 0.21 per cent growth recorded by the industrial goods segment.
Investor sentiment was weak during the trading day, as the bourse ended with 13 price gainers and 40 price losers, representing a negative market breadth index.
LivingTrust Mortgage depreciated by 10.00 per cent to N3.42, Multiverse also shed 10.00 per cent to N22.95, McNichols dropped 9.92 per cent to N5.45, Thomas Wyatt dipped by 9.87 per cent to N3.56, and Eterna lost 8.57 per cent to trade at N33.00.
On the flip side, AVA Capital improved by 9.94 per cent to N9.95, Livestock Feeds expanded by 9.71 per cent to N8.65, Neimeth increased by 8.43 per cent to N9.00, AIICO gained 3.47 per cent to settle at N4.18, and Oando grew by 3.30 per cent to N36.00.
A total of 1.6 billion equities valued at N28.7 billion exchanged hands in 54,160 deals yesterday versus the 923.0 million equities worth N37.9 billion traded in 72,544 deals on Monday, indicating a 73.35 per cent surge in the trading volume, a 24.27 per cent decline in the trading value, and a 25.34 per cent slip in the number of deals.
The busiest stock was Japaul, which transacted 904.4 million units for N2.7 billion. Sterling Holdings sold 54.0 million units valued at N431.9 million, FCMB exchanged 49.5 million units worth N545.9 million, Chams traded 44.9 million units for N199.2 million, and Neimeth sold 42.4 million units worth N327.8 million.
Business Post reports that the All-Share Index (ASI) gave up 927.70 points to 244,802.83 points from 245,730.53 points, and the market capitalisation receded by N599 billion to N158.016 trillion from N158.615 trillion.
By Adedapo Adesanya
The Naira put up a better performance against the United States Dollar in the various segments of the foreign exchange (FX) market on Tuesday, August 4.
In the parallel market, it improved its value by N5 to settle at N1,400/$1 compared with the previous day’s value of N1,405/$1, and at the GTBank forex desk, it appreciated by N1 to close at N1,373/$1, in contrast to the preceding session’s N1,374/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX) segment, the Nigerian currency gained N2.28 or 0.17 per cent against the greenback to quote at N1,362.55/$1 compared with the N1,364.83/$1 it was exchanged a day earlier.
Also in the official market, the local currency appreciated against the Pound Sterling during the session by N6.48 to finish at N1,831.41/£1 versus N1,837.89/£1, and chalked up N5.22 on the Euro to sell at N1,568.71/€1 versus N1,573.93/€1.
Interbank FX transactions increased 14 per cent day-on-day as market makers’ activities raised total Dollar volume exchanged to $156.23 million, more than 132 per cent above $137.05 million in turnover at the previous close.
The interbank FX turnover rose despite a marginal rise in deals at the NFEM window as data from the central bank put Tuesday’s quote at 139 from 138.
As for the cryptocurrency market, major tokens were mixed as global stock indexes hit fresh records on renewed enthusiasm for artificial-intelligence-related shares.
With cheaper oil, easing rate expectations and a strong risk-on rally in equities supporting digital assets, analysts say crypto appears to be driven by internal market dynamics rather than macroeconomic factors, even as traders watch for a potential Strait of Hormuz deal.
It was reported overnight that Iran and Oman were close to an agreement to reopen the Strait of Hormuz, with an announcement targeted for Wednesday.
Binance Coin (BNB) grew by 1.8 per cent to $600.54, Bitcoin (BTC) rose by 0.9 per cent to $64,199.86, Solana (SOL) jumped by 0.8 per cent to $73.95, and Ethereum (ETH) advanced by 0.7 per cent to $1,867.21.
But Cardano (ADA) depreciated by 1.9 per cent to $0.1908, TRON (TRX) dipped by 0.6 per cent to $0.3268, Dogecoin (DOGE) slumped by 0.5 per cent to $0.0698, and Ripple (XRP) crashed by 0.4 per cent to $1.06, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Adedapo Adesanya
Brent crude dropped below $80 per barrel, precisely losing $4.41 or 5.3 per cent to settle at $79.36 a barrel on Tuesday, after comments by officials from the United States and Qatar raised hopes for a diplomatic resolution to the Iran war, which could improve oil flows through the Strait of Hormuz.
Also, the US West Texas Intermediate (WTI) futures depreciated by $4.57 or 5.7 per cent to trade at $75.77 a barrel.
US Secretary of State Marco Rubio said on Tuesday there was progress in talks with Iran and Oman about moving more ships through the strait, but a final agreement was yet to be reached.
Also, Treasury Secretary Scott Bessent had said earlier on Tuesday that a deal with Iran to reopen the strait could come as soon as Tuesday or Wednesday.
Qatar’s Foreign Ministry spokesperson Majed al-Ansari said efforts to secure a diplomatic resolution to the war were continuing.
Qatar said it has discussed with US President Donald Trump ways to reduce escalation and converge viewpoints between the US and Iran.
Meanwhile, the latest round of US-facilitated talks between Israel and Lebanon began on Tuesday and will continue through Thursday.
Amid this, Iran still wants control over inbound shipping and visibility over outbound traffic through the Strait of Hormuz, with the ability to intervene if necessary, as part of a plan being discussed with Oman to reopen the strategic waterway.
Market analysts noted that the prospect of a diplomatic solution to the conflict has helped remove some of the geopolitical risk premium in oil prices. If negotiations between the US and Iran make meaningful progress, the market could continue pricing in a lower probability of supply disruptions.
Disruptions to shipping through the strait, through which a fifth of global oil and gas flowed before the war, have forced Middle Eastern nations to cut oil output sharply. The world has lost more than 2.6 billion barrels of oil since the Iran war began in February.
Shipping traffic at the key Gulf waterways of Bab el-Mandeb and the Strait of Hormuz remained unchanged at the start of the week.
The American Petroleum Institute (API) estimated that crude oil inventories in the US rose by 2.69 million barrels in the week ending July 30. Commercial crude oil inventories excluding the SPR have lost just over 58 million barrels over the last sixteen weeks, with US crude inventories down just 7.2 million for the year, according to API data.
Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
