Economy
Guinness Nigeria Announces N12.6bn Loss in 2020, ‘Suspends’ Dividend Payment
By Dipo Olowookere
Shareholders of Guinness Nigeria Plc may not get any cash reward for the 2020 financial year ended June 30 because the company board did not recommend any dividend payment for approval at the forthcoming Annual General Meeting (AGM) unlike in the previous years.
The reason for this action may not be far-fetched as the brewery giant had a bad fiscal year because the key performance indicators were not impressive, according to an analysis by Business Post.
In the 2019 accounting year, the board proposed a final dividend of N1.52 each and in the 2018 fiscal year, N1.80 was paid as a cash reward to the firm’s investors. However, in the just-concluded accounting year, no dividend was recommended by the board of directors.
During the year, the company’s revenue depreciated by 21 per cent to N104.4 billion from N131.5 billion in 2019 and this was significantly due to decline in the sale of the company’s products in the local market, Nigeria. Also, revenue from export was largely impacted in the period under review.
It is important to note that in the fourth quarter of the company’s financial year, its core markets; bars, restaurants, hotels, event centres and others were shut down by the federal government because of the COVID-19 pandemic. This may have largely contributed to the huge decline in the revenue generated.
In the results, the firm said its cost of sales reduced to N71.1 billion from N91.4 billion, while the gross profit dropped to N33.3 billion from N40.1 billion.
Also, other income decreased to N503.0 million from N781.5 million, while marketing and distribution expenses were pruned to N18.5 billion from N21.8 billion, with administrative costs rising to N14.3 billion from N9.9 billion.
In the year, Guinness Nigeria recorded an operating loss of 234 per cent, N12.8 billion, compared with the operating profit of N9.0 billion in the 2019 fiscal year, while the finance income reduced to N301.0 million from N750.9 million, with the finance costs jumping to N4.5 billion from N2.6 billion.
While the company had a loss before tax of N17.1 billion versus the pre-tax profit of N7.1 billion a year earlier, it printed a post-tax loss of N12.6 billion compared with the post-tax profit of N5.5 billion in FY’19, indicating a decline by 329 per cent, with the earnings per share at -N5.74 in contrast to N2.50 in 2019.
In the financial statements, Guinness Nigeria said during the initial phase of the lockdown imposed by the federal government, it obtained authorisation “from relevant government agencies to allow the continuation of trading activities, where possible.”
It further said following the easing of the lockdown, “our Benin site has been partially reopened to allow for the running of our spirit line and packaging line within the site.”
“Regarding our Ogba site, the Brew House team has returned to work as well. Within both sites, we continue to strictly control the number of persons on-site in order to ensure adherence to social distancing guidelines and the necessary PPEs (hand sanitizers, gloves, wipes, masks as required) have been provided to all employees.
“Transportation arrangements have also been made for essential employees required on-site and temperature checks continue to be observed before site access is granted to any employee,” it added.
By Aduragbemi Omiyale
The ex-depot prices of the two major petroleum products in the country, Premium Motor Spirit (PMS), commonly known as petrol, and Automotive Gas Oil (Diesel), have been slashed by Dangote Petroleum Refinery.
The company, in a statement on Wednesday, disclosed that while petrol is now N1,165 per litre, diesel is now N1,570 per litre.
The energy firm said it slashed the prices to reaffirm its commitment to providing affordable, high-quality petroleum products to the Nigerian market.
The latest cut in the price of PMS represents N50, as it was previously sold to marketers at N1,215 per litre, while diesel witnessed an N80 reduction, as it was formerly being sold at N1,650 per litre.
Dangote Refinery stated that the downward price review reflects its ongoing efforts to enhance energy affordability, improve access to refined petroleum products, and support economic activities across Nigeria, saying it remains committed to ensuring stable supply while leveraging operational efficiencies to deliver value to consumers, businesses, and stakeholders.
As Africa’s largest refinery, Dangote Petroleum Refinery continues to play a pivotal role in strengthening Nigeria’s energy security, reducing reliance on imports, and supporting the nation’s economic development through the supply of world-class petroleum products.
The company reaffirmed its dedication to contributing to the growth of the Nigerian economy and passing on the benefits of improved operational efficiencies to consumers whenever market conditions permit.
By Adedapo Adesanya
Dangote Petroleum Refinery is preparing to raise about $5 billion through an initial public offering (IPO) expected to conclude in October, in what could become the largest stock market listing in Africa’s history.
The company has already submitted an initial application to the Securities and Exchange Commission (SEC), with approval expected in the coming weeks. Once authorised, the refinery is expected to release its prospectus in September ahead of the public offer.
The primary listing will be on the Nigerian Exchange (NGX) Limited, although investors across Africa are expected to participate through structured investment instruments rather than a dual listing.
The proceeds will be used to expand the capacity of the 700,000-barrels-per-day refinery in Lagos and possibly support plans to replicate the project in Kenya as Dangote seeks to deepen Africa’s energy independence.
The proposed IPO comes after the refinery benefited from increased demand for refined products during the recent Iran conflict, supplying jet fuel across Africa and into Western Europe as global shortages disrupted markets.
As per Reuters, stock exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have held discussions with advisers to the transaction as interest in the offering continues to build across the continent.
Kenya alone could account for as much as $500 million of the targeted capital raise, driven largely by demand from institutional investors, including pension funds, the publication reported.
While the company is targeting a $5 billion raise, the final amount will depend on the outcome of the SEC’s review. If achieved, the offering would represent more than four per cent of the Nigerian Exchange’s current market capitalisation.
The IPO follows a $2.5 billion private placement completed last month, in which a six per cent stake in the refinery was sold, implying a valuation of about $40 billion.
That valuation, however, would place the refinery well above several listed global refining companies. Turkey’s Tupras, which operates a similar combined refining capacity across four facilities, has a market value of roughly $12 billion, while US-listed HF Sinclair, with a comparable processing capacity, is valued at around $16 billion.
Although the NGX generally requires companies on its main board to maintain a minimum free float of 20 per cent, there have been exceptions. Dangote Cement, for instance, currently has a free float of just over 12 per cent.
The publication also reported that investors outside Nigeria are likely to gain exposure through instruments such as global depositary receipts or exchange-traded products linked to the Nigerian-listed shares, rather than through a cross-listing on other African exchanges.
The founder of the 700,000-barrels-per-day capacity plant, Mr Aliko Dangote, said in April that the refinery aims to increase production capacity to 1.4 million barrels per day.
Mr Dangote is also pursuing plans to build another refinery in Lamu along Kenya’s coast in partnership with other East African governments, although it remains unclear whether part of the IPO proceeds will be allocated to that project valued at an estimated $17 billion.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rallied by 0.89 per cent on Tuesday, August 4 amid renewed buying interest in unlisted stocks.
During the session, the market capitalisation added N24.07 billion to end at N2.739 trillion compared with Tuesday’s N2.715 trillion, while the NASD Security Index (NSI) gained 40.11 points to quote at 4,563.96 points compared with the preceding day’s 4,523.85 points.
The NASD OTC Exchange ended the trading session with two price losers and three gainers, led by Central Securities Clearing System (CSCS) Plc, which chalked up N7.80 to close at N119.80 per unit versus the previous session’s N112.00 per unit. Afriland Properties Plc increased its value by N1.27 to N23.95 per share from N22.68 per share, and Nitrox Industrial Gases Plc expanded by N1.15 to N21.15 per unit from N20.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc slid by N8.64 to sell at N144.00 per share compared with the previous day’s N152.64 per share, and 11 Plc dipped by 1 Kobo to end at N225.00 per unit, in contrast to Monday’s closing price of N225.01 per unit.
Tuesday’s trading data showed that the volume of securities rose by 9.0 per cent to 1.6 million units from 1.5 million units, and the number of deals climbed by 6.5 per cent to 33 deals from 31 deals, while the value of securities dropped by 26.9 per cent to N47.6 million from N65.2 million.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 76.9 million units exchanged for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date with 3.4 billion units transacted for N8.4 billion, followed by Infracredit Plc with 2.3 billion units sold for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
