Economy
Owners of Chicken Republic Declare N3.3bn Net Profit
By Adedapo Adesanya
Food Concepts Plc, owners of the popular Chicken Republic, has declared a 135.7 per cent growth in its profit after tax (PAT) for the financial year ended December 31, 2019.
The company revealed this in its financial statements and a look at the books showed that the net profit increased to N3.3 billion from N1.4 billion in the 2018 fiscal year.
The firm recorded a 73.3 per cent rise in profit before tax to N2.6 billion from N1.5 billion in 2018 and in the period under review, it received a tax credit of N723 million, which boosted the net profit for the year.
Food Concepts trades its shares on the floor of the NASD OTC Securities Exchange and in the year under review, the revenue generated, which was made from contracts with customers, rose 51.6 per cent to N13.8 billion from N9.1 billion in the preceding year.
A breakdown showed that operations within Nigeria accounted for the chunk of the revenue (N13.6 billion versus N8.9 billion in 2018). Meanwhile, operations outside the shores of the country recorded a drop in revenue by 6.7 per cent as N208 million was made in the year as against N223 million.
Also recording a drop during the period was the operating income, which went down by 2.9 per cent to N135 million from N139 million recorded in 2018.
There was a rise in the number of raw materials and consumables used during the period as N6.4 billion was expended against N4.1 billion on record the year before.
Equally, employee benefits expense rose by 40 per cent during the year with N2.1 billion spent compared to N1.5 billion in the previous full year.
Operating profit rose during the period by 109.1 per cent to N2.3 billion from N1.1 billion during the preceding year.
Speaking on the result, the Chairman, Mr Odunayo Olagundoye, noted, “We have, once again, grown our revenues and our bottom line and despite various Macro and Micro economic challenges, we are pleased to share with you your company’s key achievements for the financial year ended December 31, 2019.
“We have achieved many milestones over the past few years; we continued to open our flagship brand Chicken Republic stores, whilst adding a new and exciting brand Pie Express to our portfolio of brands.
“We concluded our rights issue in 2019 and secured the requisite funds to continue investing in new stores, IT infrastructure and Central Kitchens; we also built a strongly integrated manufacturing and supply chain division, that will enable our future growth strategy.”
“Our company has overcome many challenges over the years and is now well-positioned to exceed the many milestones achieved in 2019. We have generated strong cash flows and as a result, have achieved robust profitability.
“We have a solid new store pipeline in place for 2020 and will fund our growth and ambitious plans with a combination of cash generated from operations and cash raised from the rights issue.
“Our staff are motivated, happy and responding well to the direction set by the board, executive and senior management teams,” the Managing Director, Mr David Butler, noted.
“Our growth continues to be driven both by same-store sales growth and the expansion of our Chicken Republic and Pie Express brands; we have seen a 56 per cent year-on-year increase in customer traffic to our stores – representing a significant gain in market share. We have opened 25 new shops taking our total to 94 company-owned and franchised locations,” he added.
He noted that due to the COVID-19 pandemic, Food Concepts Plc was declared an Essential Service and continued to trade noting that despite the related challenges, the company has continued to see its sales, customer count and profitability continuously increasing.
He assured that “It is still early days with many predicting a rocky, protracted rollercoaster-type recovery to the COVID-19 pandemic… but I can assure you that our business is improving daily and reacting well under the current circumstances.”
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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