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Nigerian Breweries Cuts Dividend by 54% as Profit Shrinks 54%

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nigerian breweries shareholders

By Dipo Olowookere

Shareholders of Nigerian Breweries Plc, one of the main brewery firms in the country, will have to make do with the 69 kobo being proposed by the board of directors as the final dividend per share for the year 2020.

When compared with the final dividend paid for the 2019 financial year, N1.51 per unit, it is 54.3 per cent lower and the reason for this huge cut can be attributed to the harsh economic situation in the country, compounded by COVID-19, which has significantly reduced the purchasing power of Nigerians.

The disposable income of consumers in the country is very lean, making it difficult for players in the beer industry to generate high turnover and profit like they used to in the past.

In a notice on the Nigerian Stock Exchange (NSE) over the weekend, the brewery giant said the final dividend would be paid to shareholders whose names appear in the register of members as at the close of business on March 10, 2021.

However, the payment is still subject to the deduction of the appropriate withholding tax and approval of the shareholders at the Annual General Meeting (AGM) fixed for April 22, 2021.

If approved, payment would be made the next day. It was also stressed that shareholders may decide to “receive new ordinary shares in the company instead of the final dividend in cash.”

Nigerian Breweries stated that “the election is required to be made on or before April 10, 2021. The reference share price for the purpose of determining the number of shares due to qualifying shareholders who elect for the share option will be a 10-day trading average of the company’s share price on the floor of the NSE, starting on March 11, 2021.”

In the 2020 fiscal year, Nigerian Breweries had it rough as its profit before tax depreciated by 50.4 per cent to N11.6 billion from N23.4 billion in the corresponding period of 2019, while the profit after tax decreased by 54.0 per cent to N7.4 billion from N16.1 billion a year earlier.

A look at the top line of the results by Business Post showed that there was a slight improvement in the revenue, N337.1 billion versus the previous year’s N323.0 billion, while the gross profit decline to N118.7 billion from N131.3 billion.

Also, the other income dropped to N828.1 million from N1.0 billion, while marketing and distribution expenses reduced to N70.7 billion from N77.7 billion, with the administrative expenses slashed to N19.0 billion from N19.4 billion.

Consequently, the operating profit decreased to N29.8 billion from N35.2 billion as the finance income reduced to N246.3 million from N260.7 million, while the finance costs increased to N18.4 billion from N12.1 billion, leaving the net finance cost at N18.0 billion as against N11.9 billion in the same period of 2019.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

Brent Trades $67/Barrel Despite High Crude Inventories

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brent crude oil

By Adedapo Adesanya

The Brent crude jumped to $67 per barrel on Wednesday despite a surprising report that showed a build in crude inventories in the United States, the largest oil-producing country in the world.

During the trading session, the global benchmark, which many country use to price their crude, appreciated by 2.8 per cent or $1.85 to trade at $67.22 per barrel, while the US benchmark, West Texas Intermediate (WTI) crude, gained $1.78 or 2.9 per cent to sell at $63.45 per barrel.

Crude oil prices went on steroids after the Energy Information Administration (EIA) reported a crude oil inventory build of 1.3 million barrels for the week to February 19. The build was much lower than the one the American Petroleum Institute (API) had estimated a day earlier.

The report came a day after the API estimated an oil stock build of over 1 million barrels. It also compared with analyst expectations of a 5.372-million-barrel draw for the reported week and a 7.3-million-barrel inventory draw the EIA reported for the previous week.

Last week’s frigid weather in the American state of Texas will likely keep oil prices higher for some time as production restarts slowly, and reports suggest that some of it may not return at all as companies have decided to halt production.

The bullish sentiment around the black gold could be attributed to the renewal of hopes from banks and traders, especially after Goldman Sachs said it expected prices to hit $70 and top it by the summer.

Also, confidence that a meaningful demand rebound will accompany widening vaccination availability by soon has supported prices and the production outages in the US only served to strengthen it further.

Key players in the oil market have been talking up the rising prices in the coming months, with some even floating the prospect of $100 crude in the next year or two as the global economy recovers from the COVID-19 pandemic.

Still, market participants continue to observed events leading to next week’s meeting between the Organisation of the Petroleum Exporting and its allies (OPEC+).

This meeting, set for March 4, is likely to set the tone into the second quarter of the year as they decide on whether to bump up production or seek even higher prices before the pick-up in demand has started to fully materialize.

Back in December, the group decided to restore 500,000 barrels a day as part of the gradual process, which was paused in January, to push the remaining 7 million withheld barrels a day back into the market.

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Economy

Confusion Over Fresh Court Order on Suspended Oando AGM

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Oando SEC crisis

By Dipo Olowookere

There seems to be confusion over a fresh court order secured by a shareholder of Oando Plc concerning the suspension of the company’s Annual General Meeting (AGM).

In 2019, the Securities and Exchange Commission (SEC) suspended the yearly shareholders’ meeting of Oando, preventing the energy firm from meeting its obligations of filing financial statements to the Nigerian Stock Exchange (NSE).

But on Tuesday, February 23, 2021, one Mr Patrick Ajudua claimed he obtained an order from Justice O. A Musa of the High Court of the FCT, Abuja, declaring the action of SEC, the apex regulator in the nation’s capital market, as illegal and unconstitutional.

It was reported that the court held that Mr Ajudua, as a member and shareholder of Oando, has a right and freedom of association and assembly with other shareholders and the right to receive information at the AGM.

Also, it was reported that a letter dated May 31, 2019, by SEC to Oando sanctioning its management was declared unconstitutional, null and void by the court because it was in violation of Mr Ajudua’s fundamental right to a fair hearing and his human right to receive information on the affairs of Oando and his interest and shares in Oando.

According to reports, the court set aside the directive of SEC suspending/postponing indefinitely the AGM of Oando because it was in violation, breach, and contravention of Mr Ajudua’s right and freedom of association and assembly with other shareholders and right to information from other shareholders and Oando Plc;

The shareholder was said to have obtained an order from the court restraining SEC and Oando from interfering with, disrupting, and or interfering with his constitutional right of association, assembly and right to receive information from other shareholders and members of Oando Plc at the postponed 2019 AGM.

He further received an order of injunction restraining SEC from acting and/or taking any steps pursuant to its letter of May 31, 2019, or interfering in any manner whatsoever with directors lawfully appointed him.

Also, Mr Ajudua was said to have secured an order directing Oando to convene and hold AGM within 90 days of the order of the court in compliance with the provisions of CAMA.

But SEC, in a statement made available to Business Post on Wednesday said it was not aware of the case or the judgment.

“The attention of the commission has been drawn to several publications in the social media, where it is reported that a shareholder of Oando Plc, purportedly obtained a judgment from the Federal Capital Territory High Court against the commission.

“The commission wishes to inform the general public that it was never at any time served with court processes with respect to the purported matter at the FCT High court.

“The commission will consequently take all necessary steps to verify and set aside the purported decision of the said court,” the statement signed by the management disclosed.

However, Mr Ajedua has described his action as “a win” for him and “all shareholders,” noting that, “The lingering delay in resolution of the conflict has brought untold hardship, financial difficulty and loss of capital appreciation on our investments.”

“Therefore, we receive this judgement with humility and the pray that with all hands on deck, we can move the company forward.

“We plead with the regulators to give peace a chance and allow for a harmonious resolution to the conflict.

“The shareholder community will continue to protect our investments by ensuring high compliance with the code of corporate governance and the integrity of the company’s operations in the capital market,” he added.

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Economy

AIICO, Zenith Bank, 14 Others Lift NSE Index by 0.03%

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AIICO rights issue

By Dipo Olowookere

The Nigerian Stock Exchange (NSE) was saved from the claws of the bears on Tuesday, bringing a sigh of relief to investors, who had been forced to endure a turbulent time lately.

The market appreciated by 0.03 per cent, thanks to AIICO Insurance, Zenith Bank and 14 other equities.

Zenith Bank on its part contributed chiefly to the growth witnessed yesterday as a result of the release of its 2020 full-year earnings and the declaration of N2.70 final dividend.

This announcement triggered buying pressure and lifted the All-Share Index (ASI) by 10.77 points to 40,164.86 points from 40,154.09 points and pushed the market capitalisation higher by N6 billion to N21.015 trillion from N21.009 trillion.

At the close of transactions, the volume of shares rose by 16.80 per cent to 338.0 million units from 289.3 million units, while the value of traded equities increased by 7.59 per cent to N3.9 billion from N3.6 billion, with the number of deals rising by 5.63 per cent to 5,232 deals from 4,953 deals.

For another trading day, FBN Holdings was the most active stock with the sale of 64.6 million units valued at N471.8 million, while Zenith Bank traded 52.7 million units worth N1.3 billion.

Transcorp exchanged 42.0 million equities for N38.1 million, United Capital transacted 21.0 million stocks valued at N128.2 million, while UBA traded 18.2 million shares for N153.2 million.

During the session, AIICO Insurance and Livestock Feeds topped the gainers’ table with a price appreciation of 7.14 per cent each to finish at N1.20 per unit and N2.25 per share respectively.

Flour Mills improved by 6.16 per cent to close at N31 per unit, Zenith Bank gained 4.84 per cent to trade at N26 per share, while Cutix appreciated by 4.65 per cent to sell for N2.25 per unit.

Sitting on top of the losers’ list was Sunu Assurances, which lost 9.88 per cent to settle at 73 kobo per share and was deputised by LASACO Assurances, which declined by 9.87 per cent to trade at N1.37 per unit.

Africa Prudential depreciated by 9.85 per cent to quote at N5.95 per share, ABC Transport lost 8.57 per cent to close at 32 kobo per unit, while University Press depleted by 8.53 per cent to trade at N1.18 per share.

For the sectors, only the banking index closed positive with a 1.68 per cent growth as the consumer goods and insurance sectors lost 1.61 per cent and 0.92 per cent respectively, with the energy and industrial goods counters closing flat.

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Economy

Unlisted Securities Market Posts Fourth Consecutive Loss

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Unlisted Securities Market

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a loss on Tuesday and it was the fourth consecutive time this was happening.

During the trading session, the unlisted securities market ended in negative territory as a result of the 0.49 per cent slide it closed with.

This battered the NASD Unlisted Security Index (NSI) by 3.48 points to 707.24 points from the 710.72 points recorded at Monday’s trading session.

It equally depleted the market capitalisation of the bourse by N2.50 billion to N507.45 billion from N509.95 billion achieved the preceding day.

The bearish environment was activated by a loss in the price of Central Securities Clearing Systems (CSCS) Plc stocks by 50 kobo or 3.1 per cent, closing at N15.50 per unit compared to N16 per unit it traded a day earlier.

However, the level of trading activities improved yesterday as the volume of trades rose by 172.9 per cent to 234,152 units from Monday’s 85,800 units.

But the value of the transactions reduced yesterday by 55.7 per cent as securities worth N8.1 million exchanged hands in contrast to the previous N18.3 million.

Also, the total number of deals executed by market participants went down by 72.7 per cent as only three deals were performed at the exchange as against the 11 deals recorded on Monday.

Business Post reports that these deals were carried out on shares of FrieslandCampina WAMCO Nigeria Plc, CSCS Plc, and Nipco Plc.

The market, which closed without a price gainer, had UBN Property Plc emerging as the most active stock by volume (year to date) with the sale pf 15.5 million units valued at N16.8 billion. CSCS Plc trailed with the sale of 4.7 million units worth N73.1 million, while FrieslandCampina WAMCO Nigeria Plc has traded 2.3 million units worth N280.0 million.

In terms of the most traded stock by value (year-to-date), FrieslandCampina occupied the topmost spot with the sale of 2.3 million units valued at N280.0 million. Niger Delta Exploration and Production (NDEP) Plc has exchanged 603,911 units worth N195.9 million, while CSCS has traded 4.7 million units worth N73.1 million.

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Economy

Oil Prices Slip on Surprise Inventory Build

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oil prices fall

By Adedapo Adesanya

Oil prices slipped on Tuesday following a surprise inventory build in the United States after last week’s winter storm affected production.

Brent Crude saw its value chip off 17 cents or 0.26 per cent to trade at $65.07 per barrel, while the United States’ benchmark, West Texas Intermediate (WTI) crude futures, dropped 3 cents or 0.05 per cent to sell at $61.67 per barrel.

The American Petroleum Institute (API) reported on Tuesday a build in crude oil inventories of 1.026 million barrels for the week ending February 19 after analysts had predicted an inventory draw of 5.190 million barrels for the week.

In the previous week, the API reported a draw in oil inventories of 5.8-million barrels after analysts had predicted a draw of 2.429-million barrels.

The market will be waiting for the more trustworthy data from the Energy Information Agency (EIA) which will be released later on Wednesday.

Oil prices recorded a surge on Monday after investment bank, Goldman Sachs, predicted that Brent will reach $70 a barrel in the second quarter and $75 in the following three months, lifting its previous Q2 and Q3 forecasts by $10 per barrel. It expects the lower inventories will lead to an oil price rally sooner and at higher price levels.

Bank of America also said Brent prices could temporarily spike to $70 per barrel in the second quarter.

But the market may be fresh problems as Saudi Arabia and Russia are reportedly once again at odds over oil supply management ahead of another crucial meeting of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) next week.

OPEC’s top producer and de facto leader, Saudi Arabia, would likely prefer the March 3-4 meetings to decide that the OPEC+ coalition holds production flat in April but evidence points to the fact that Russia will likely be pushing for further easing of the production cuts.

Russian Deputy Prime Minister Alexander Novak said earlier this month that the global oil market was balanced and the current price of oil fully reflected this market situation.

The two leaders of the pact are once again going into an OPEC+ meeting with diverging views on how to manage supply to the market. The last time that this happened, oil prices went down to unprecedented levels.

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Economy

CryptoLocally Lists Dogecoin on Decentralized P2P Platform

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CryptoLocally

By Adedapo Adesanya

CryptoLocally has announced that Dogecoin (DOGE) will be available to trade on its decentralized peer-to-peer (P2P) trading platform, giving Nigerian cryptocurrency traders ease of transactions.

DOGE, the cryptocurrency that started as a joke, has become a poster child of the entire industry. Now, users will be able to take advantage of Dogecoin’s bullish market trend.

In a press release, the company stated that as part of efforts to offer the very best P2P trading experience to its customers, there is no better way than by offering one of the hottest cryptocurrencies out in the market today.

“Our relentless effort to bring the best P2P trading experience to our customers has led us to continually innovate and evolve. GIVernance, our governance platform, is one of the fruits of this labour. It empowers our community to take a more active role in steering the development of our platform.

“This shared-governance model gave a powerful voice to our users, using GIV to support proposals that bring more value to CryptoLocally’s ecosystem. In fact, the listing of Dogecoin on our platform is a community-driven initiative led and approved by GIVernance participants.

“The listing of Dogecoin by the community is a fitting example of the workings of a truly decentralized P2P trading venue.

“In CryptoLocally, we give traders what they want when they want it,” it noted.

Dogecoin was created in 2013 by Jackson Palmer and Billy Markus as a light-hearted and fun crypto project. It was meant to be a satirical take on cryptocurrencies with no particular purpose other than a reward mechanism for online content.

The crypto project was based on the popular “Doge” Internet meme and features Shibu Inu as its logo. It was officially launched by Jackson Palmer on December 6, 2013, with the release of its official website. Surpassing all expectations, the website had over one million views within one month of launching.

At the time, DOGE briefly surpassed all trading volumes of all cryptocurrencies combined; even that of Bitcoin. It owes its success to the fun-loving Dogecoin community which has grown tremendously throughout the years.

Mr Markus developed Dogecoin’s protocol based on Litecoin’s scrypt technology. It was meant to be more ASIC resistant and promote more decentralized mining activity on the Dogecoin network.

However, Dogecoin offers faster transactions and confirmations than Litecoin as it has a block time of only one minute compared to the latter’s 2.5 minutes. The transaction fee of Dogecoin is also comparable to that of Litecoin’s, making DOGE a very good alternative to Litecoin as a payment network.

Despite its apparent advantages, DOGE never positioned itself as a payment network nor as an investment vehicle. There is no clear logical reason why people love promoting, holding, and using DOGE. Its unique charisma allowed it to quickly develop a vibrant and strong online community.

It consistently got the attention of business magnate, Elon Musk, and more recently, legendary music artists Snoop Dogg and Gene Simmons. Snoop Dogg put an online mock album with an image caption “Snoop Doge,” while Gene Simmons of rock band KISS called himself the “God of Dogecoin.”

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