Economy
Forte Oil Liquidity Position Relatively Weak—GCR
By Dipo Olowookere
A local credit rating agency, Global Credit Ratings (GCR), has described the liquidity position of an indigenous energy firm, Forte Oil Plc, as “relatively weak.”
In a statement issued by the rating company, the short term rating of Forte Oil was downgraded to A2(NG), with the outlook accorded as stable.
GCR explained that the weak liquidity as well as the company’s low debt service coverage and significant budget underperformance contributed to the one-notch downgrade of the short-term rating.
However, a long term national scale ratings were assigned to Forte Oil at A-(NG), with its issue rating of A-(NG) concurrently affirmed and the outlook accorded as stable.
It was explained that the ratings factor Forte Oil’s strong market presence in the Nigerian downstream oil industry as the firm owns significant assets across the value chain with an extensive distribution and retail network, supported by long-term relationships with suppliers, and an experienced management team.
In the first half of 2019, Forte Oil successfully divested from its power business and other subsidiaries and given the persistent cash flow challenges, the subsidiaries were a substantial drain on the core business and were partly responsible for the elevated gearing.
GCR said excluding the power business, gross debt from continuing operations fell to N18.7 billion in FY18 (FY17: N34.8 billion). This translated into a much lower net debt to EBITDA of 423 percent at FY18, but still well above forecasts.
The metrics deteriorated further to 662 percent in 5M FY19. Without the power business working capital pressure is also expected to ease, which will contribute to lower gearing.
In addition, Forte Oil plans to utilise proceeds from the sale to reduce debt. GCR said the assigned ratings are thus premised on a sustained reduction in earnings based gearing to below 70 percent over the medium term and reach a net ungeared position by FY21.
GCR stated in the released that the high short-term maturities (70 percent of total debt), are reflective of the short-term nature of fuel inventories, but cash holdings are very low, offering no buffer against debt maturities.
“Some comfort is taken from Forte Oil’s strong banking relationships, and the N13 billion unutilised credit facilities.
“The imminent maturity of the federal government’s irrevocable unconditional promissory note should also somewhat bolster liquidity,” the rating agency said.
It noted that excluding the power business (28 percent of revenue in FY17), Forte Oil still demonstrates strong revenue generating capacity, underpinned by the ongoing retail expansion and aggressive marketing initiatives.
However, the remaining business reports an inherently lower profit margin, due to the high cost environment, amid tight regulation of premium motor spirit (PMS) (70 percent of total revenue).
“This, coupled with high finance costs, saw net interest coverage narrow to a low 1.6x in FY18 (FY17: 3.1x), which shrank further to 0.5x in 5M FY19,” the statement obtained by Business Post said.
In the medium to long term, Forte Oil plans to strengthen its margins through increased fuel volumes and a focus on higher margin lubes and greases.
GCR stressed that a rating uplift is dependent on demonstrated reduction in debt and a significant ramping up of volumes and margins (in line with targets).
“Conversely, persistently high gearing metrics post the sale, as well as poor interest coverage, could negatively impact the rating,” it noted.
Economy
BNB Price Reflects Changing Dynamics in the Digital Asset Market
Economy
NASD Unlisted Security Index Crosses 4,000-point Benchmark Again
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange achieved a milestone on Friday, April 24, 2026, after five securities on the platform helped with a 1.85 per cent growth.
Data showed that the NASD Unlisted Security Index (NSI) again crossed the 4,000-point benchmark yesterday.
The index chalked up 73.64 points during the trading day to close at 4,052.59 points compared with the preceding session’s 3,978.95 points, while the market capitalisation added N5.38 billion to finish at N2.424 trillion versus Thursday’s closing value of N2.380 trillion.
The price gainers were led by Okitipupa Plc, which grew by N25.00 to sell at N305.00 per share compared with the previous price of N280.00 per share. Central Securities Clearing System (CSCS) Plc gained N6.92 to close at N76.26 per unit versus N69.34 per unit, Afriland Properties Plc appreciated by N1.00 to N17.00 per share from N18.00 per share, FrieslandCampina Wamco Nigeria Plc improved by 55 Kobo to N99.55 per unit from N99.00 per unit, and Food Concepts Plc increased by 5 Kobo to N2.70 per share from N2.65 per share.
However, there was a price loser, MRS Oil, which dipped by N21.75 to N195.75 per unit from N217.50 per unit.
During the final session of the week, the value of securities jumped 75.2 per cent to N41.3 million from N23.6 million units, and the number of deals expanded by 62.9 per cent to 44 deals from 27 deals, while the volume of securities declined marginally by 0.9 per cent to 447,403 units from 451,522 units.
At the close of trades, Great Nigeria Insurance (GNI) Plc was the most traded stock by volume (year-to-date) with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
GNI was also the most active stock by value (year-to-date) with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 59.6 million units transacted for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Economy
Naira Slips to N1,358/$1 as FX Reserves, Policy Uncertainty Concerns
By Adedapo Adesanya
It was not a good day for the Nigerian Naira in the currency market on Friday, April 24, as its value depreciated against the major foreign currencies at the close of transactions.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX), it lost N4.53 or 0.33 per cent against the United States Dollar yesterday to trade at N1,358.44/$1, in contrast to the N1,353.91/$1 it was exchanged on Thursday.
Equally, the domestic currency slipped against the Pound Sterling in the official market during the session by N8.14 to close at N1,834.02/£1, compared with the previous rate of N1,825.88/£1 and dropped N8.01 against the Euro to sell at N1,590.73/€1 versus N1,582.72/€1.
Also, the Naira depreciated against the US Dollar at the GTBank FX desk on Friday by N4 to quote at N1,370/$1 compared with the previous session’s N1,366/$1, and at the parallel market, it depleted by N5 to settle at N1,380/$1 versus the preceding day’s N1,375/$1.
Data published by the Central Bank of Nigeria (CBN) indicated that NFEM interbank turnover surged to N43.562 million across 68 deals, up from N28.117 million the previous day.
Despite the CBN’s reassurance that the recent drop in external reserves is not worrisome, the market remains unsettled by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market as gross reserves continue to decline to $48.4 billion.
The outlook for the Dollar appears supported by broader macro risks, including elevated oil prices tied to the tanker traffic disruptions in the Strait of Hormuz and a continued US-Iran standoff over ceasefire negotiations.
A look at the digital currency market showed that investors are sitting on the edge as the US Dollar rebounded amid geopolitical and inflation risks despite continued inflows into US spot bitcoin Exchange Traded Funds (ETFs).
Solana (SOL) rose by 1.2 per cent to sell $86.45, Cardano (ADA) appreciated by 1.1 per cent to $0.2517, Dogecoin (DOGE) grew by 0.9 per cent to $0.0989, Ripple (XRP) improved by 0.3 per cent to $1.43, Ethereum (ETH) soared by 0.2 per cent to $2,316.83, and Binance Coin (BNB) chalked up 0.1 per cent to sell for $637.44.
However, TRON (TRX) depreciated by 1.3 per cent to $0.3235, and Bitcoin (BTC) lost 0.2 per cent to close at $77,562.27, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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