Economy
NNPC to Pay First Dividends in Decades in FY 2020—Kyari
By Adedapo Adesanya
The Nigerian National Petroleum Corporation (NNPC) has said it was working diligently to ensure that for the first time in decades, its shareholders would be paid dividends by the end of 2020.
This was disclosed by the Group Managing Director of NNPC, Mr Mele Kyari, at a media parley over the weekend, adding that the organisation was now more open to public scrutiny with its decision to publish its audited financial reports for the first time in 43 years.
He added that although the pandemic had prevented the corporation and its partners from attaining the three million barrels per day crude oil production target, NNPC was determined to cut its losses and become a profit-making entity.
Mr Kyari noted that other transparency initiatives taken by the corporation included its monthly financial reports and joining as a supporting organisation of the Extractive Industries Transparency Initiative (EITI).
The NNPC boss said the national oil corporation had been able to cut its losses by over N800 billion between 2018 and 2019, stressing that based on its projections, it would declare dividends in 2020.
The helmsman noted that the crisis brought about by the COVID-19 pandemic and the effect on its activities, commencing and continuing new oil and gas projects, have been seriously stalled by the liquidity challenges in the oil sector.
He stated that the crisis in the global oil market had forced companies, including NNPC, to further cut down losses, rework project costs, as well as review the production cost per unit of crude oil to remain competitive.
The GMD declared that in the recent past, only the current administration of President Muhammadu Buhari had not interfered in the operations of NNPC. He said this had given the corporation the free hand to take decisions based on facts and figures.
According to him, “There is no company in the country which has cut its losses within one financial year by N800 billion. We have improved efficiency by cutting 97 per cent of our losses.
“NNPC has never published its audited financial statement in 43 years. We came and started doing that and released the 2018 financial statement. We were not afraid of doing that and there were a lot of criticisms that we lost money in refinery operations and pipeline business.
“Our vision is that NNPC will become a company of excellence and declare dividends to Nigerians and shareholders. We are optimistic that at the end of 2020, NNPC should be able to declare dividends to Nigerians, in spite of the impact of the COVID-19 pandemic.”
Mr Kyari reiterated that the COVID-19 pandemic resulted in a net industry loss of about $1 trillion this year.
He said, “According to industry analysis carried out in quarter one, 2020, Exploration and Production (E&P) companies are at risk of losing about $1 trillion in revenue by the end of 2020.
“With new lockdown orders due to resurgence of COVID-19 in Europe and other industrial nations, the estimated revenue shrinkage may likely grow above Rystad Energy estimates by the close of 2020.
“This financial impact and the resultant poor liquidity position is making funding of both existing and new projects more difficult as companies cut spending and defer projects.”
On the issue of political meddling in the operations of NNPC, Mr Kyari explained that having worked for the corporation for almost three decades, it was under the Mr Buhari administration that all forms of interferences stopped.
He stated, “I can confirm that the privilege we have today in NNPC of having unfettered control without any distraction or interference to make decisions and be accountable and responsible for our decisions has never happened until this government.
“I can tell you this because I have been around for 29 years and have worked closely with the top management of the NNPC for about 15 years. This is the only president who has never asked NNPC to do something.
“The president only wants to know and be sure that what we are doing is in the best interest of the country.”
The GMD stated that Nigeria remained more of a gas country than oil, disclosing that the corporation’s new focus is on gas development, as it is the most resilient source of energy in the energy transition process.
He explained, “The only hydrocarbons that survived during the COVID-19 with minimal negative change was gas. Gas will help the country out of its major challenge of electricity. The biggest challenge we have here is to take electricity to homes and industries and to use the resources we have to create that energy this country needs.
“Today, the two reasons we are not getting electricity are because the production is low and we are not able to transmit it to those who need it. That means there is a bottleneck in transmission and distribution system.”
Mr Kyari said despite the difficult times in the industry, NNPC was able to maintain its obligations to the Federation Account for seven months without failure.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed higher by 1.41 per cent on Friday, May 15, supported by four securities on the platform.
During the session, FrieslandCampina Wamco Plc added N14.24 to its share price to sell for N159.00 per unit, in contrast to the previous day’s N144.76 per unit.
Further, Central Securities and Clearing System (CSCS) Plc appreciated by N1.34 to N72.34 per share from N71.00 per share, Geo-Fluids Plc improved its price by 4 Kobo to N2.94 per unit from N2.90 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to trade at 61 Kobo per share compared with Thursday’s closing price of 60 Kobo per share.
As a result, the NASD Unlisted Security Index (NSI) rose by 58.20 points to 4,188.41 points from 4,130.21 points, and the market capitalisation soared by N34.82 billion to N2.506 trillion from N2.471 trillion on Thursday.
During the session, the volume of trades went up by 180.8 per cent to 1.2 million units from 417,349 units, and the value of transactions increased by 29.8 per cent to N29.8 million from N23.2 million, while the number of deals fell by 22.6 per cent to 24 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 60.8 million units exchanged for N4.1 billion, and Okitipupa Plc with 27.9 million units valued at N1.9 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
By Dipo Olowookere
The bears overpowered the Nigerian Exchange (NGX) Limited on Friday, sinking it further by 0.76 per cent when the closing gong was struck by 4 pm.
The nation’s flagship equity market was under selling pressure during the session, as investors booked profits after the shares witnessed price appreciation in the past trading sessions.
The energy sector was the most impacted, as it shed 4.43 per cent. The consumer goods index declined by 0.90 per cent, the banking counter decreased by 0.15 per cent, and the industrial goods sector lost 0.08 per cent, while the insurance counter gained 2.42 per cent, which was not enough to salvage the situation.
Consequently, the All-Share Index (ASI) contracted by 1,912.19 points to 250,330.92 points from 252,243.11 points, and the market capitalisation moderated by 1.225 trillion to N160.444 trillion from N161.669 trillion.
Zichis was the worst-performing stock for the session after it gave up 9.97 per cent to close at N29.43, FTN Cocoa slipped by 9.95 per cent to N8.96, The Initiates slumped by 9.90 per cent to N32.30, LivingTrust Mortgage Bank tumbled by 9.88 per cent to N3.83, and International Energy Insurance dropped 9.71 per cent to trade at N2.79.
The best-performing stock was ABC Transport, which grew by 10.00 per cent to N6.27. May and Baker also appreciated by 10.00 per cent to N47.30, SCOA Nigeria surged by 9.98 per cent to N33.05, Trans-Nationwide Express expanded by 9.97 per cent to N7.06, and DAAR Communications jumped 9.76 per cent to N2.25.
Yesterday, investors traded 1.1 billion shares worth N44.3 billion in 65,744 deals compared with the 1.0 billion shares valued at N41.6 billion transacted in 74,822 deals a day earlier. This indicated a dip in the number of deals by 12.13 per cent, and a rise in the trading volume and value by 10.00 per cent and 6.49 per cent, respectively.
Chams was the busiest equity for the day, with 328.5 million units sold for N1.1 billion. UBA traded 61.6 million units worth N2.7 billion, First Holdco transacted 58.7 million units valued at N4.2 billion, Secure Electronic Technology exchanged 51.9 million units worth N45.0 million, and Access Holdings traded 51.8 million units valued at N1.3 billion.
By Adedapo Adesanya
The last trading session of the week at the Nigerian Autonomous Foreign Exchange Market (NAFEX) ended on a negative note for the Naira on Friday, May 15, as it lost N15 Kobo or 0.1 per cent against the Dollar to trade at N1,371.04/$1 compared with the previous day’s N1,370.89/$1.
However, it further appreciated against the Pound Sterling in the same market segment yesterday by N20.77 to close at N1,830.61/£1 versus Thursday’s value of N1,851.38/£1, and gained N7.91 against the Euro to settle at N1,595.07/€1 versus N1,602.98/€1.
At the GTBank FX desk, the Naira lost N2 against the US Dollar during the session to sell at N1,383/$1 compared with the preceding session’s N1,381/$1, and at the black market, it remained unchanged at N1,385/$1.
The Naira is forecast to be broadly stable, supported by Dollar sales by the Central Bank of Nigeria (CBN) amid steady, higher oil receipts, with the market settling into a balance.
Policy direction is also expected to give the market some boost as the CBN said the new edition of the FX market guidelines will deepen liquidity, improve transparency and strengthen confidence in the country’s foreign exchange market.
According to the Governor of the CBN, Mr Yemi Cardoso, the update is due to changing global economic realities, domestic reforms and the need for a more coherent and forward-looking regulatory framework. According to him, the last edition of the FX manual was issued in 2018, making the latest review both timely and necessary.
Meanwhile, the cryptocurrency market plunged into the red zone as rising bond yields hit risk assets across markets, while traders are increasingly betting the Federal Reserve may need to raise rates again. Rising energy prices and resurging inflation could force central banks back into tightening mode.
Cardano (ADA) shrank by 4.4 per cent to $0.2557, Dogecoin (DOGE) slid by 3.7 per cent to $0.1104, Ripple (XRP) depreciated by 3.5 per cent to $1.41, Solana (SOL) crashed by 3.5 per cent to $87.81, and Binance Coin (BNB) slumped by 3.4 per cent to $659.64.
Further, Bitcoin (BTC) declined by 2.6 per cent to $78,547.49, Ethereum (ETH) lost 2.1 per cent to quote at $2,209.19, and TRON (TRX) tumbled by 0.7 per cent to $0.3509, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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