Economy
UAC Nigeria Gets N3.6bn Shares of UPDC REIT
By Dipo Olowookere
One of the shareholders of UACN Property Development Company (UPDC), UAC Nigeria, has been allocated 649 million units of UPDC Real Estate Investment Trust (REIT) stocks worth N3.6 billion.
Recall that in 2020, UPDC, as part of the process its restructuring process, unbundled its holdings in UPDC REIT and made allocations to all its shareholders, including its parent company, UAC Nigeria Plc.
UPDC had explained that the initiative was to maximise returns to its shareholders by providing direct access to the steady and regular dividend distributions of UPDC REIT.
This deal and a few others had an impact in UAC Nigeria in the 2020 financial year.
Also, recall that last year, UAC Nigeria struck a deal with Custodian Investment Plc for the transfer of 51 per cent stake in UPDC, reducing its stake to 42.85 per cent. UAC Nigeria received N6.6 billion in cash proceeds from the transactions.
“In December 2020, UAC received 649 million units of UPDC REIT, valued at N3.6 billion as part of the partial exit from UPDC.
“This is in addition to the N6.6 billion received in H2 2020 for the sale of a 51 per cent stake in UPDC,” the Group Managing Director of UAC Nigeria, Mr Fola Aiyesimoju, stated.”
“We benefited from N1.2 billion in non-recurring gains from investments in associates, MDS Logistics Limited and UPDC,” Mr Aiyesimoju added.
Last year, the revenue generated by UAC Nigeria increased 3.0 per cent to N81.6 billion from N79.2 billion supported by sales growth in the Animal Feeds & Other Edibles segment (4.6 per cent), the Packaged Food & Beverages segment (1.8 per cent) and the Quick Service Restaurant Segment (1.9 per cent).
These segments were deemed essential services during the period of stringent restrictions to the movement of people and goods to curtail the spread of COVID-19.
However, the gross profit dropped 5.5 per cent to N15.7 billion from N16.6 billion due to limited sales during the strictest phase of the lockdown in April and May, higher input costs, and distribution expenses.
At the end of the year, the profit after tax from continuing operations decreased to N3.8 billion, from N5.3 billion a year earlier, while the total profit closed at N4.3 billion in contrast to the N9.3 billion loss reported in FY 2019, with the earnings per share (EPS) at N1.06 in 2020 versus the negative N1.83 in 2019.
In his reaction to the performance of the company last year, Mr Aiyesimoju said, “FY 2020 was challenging, with operational disruptions related to COVID-19 and #EndSARS protests.”
He noted that the team “focused on executing our strategy, implementing initiatives relating to UPDC, significantly reducing leverage and increasing cash, strengthening management, and driving profitability.”
“Operating performance for the year was negatively impacted by the aforementioned disruptions as well as input cost escalation. Our efforts resulted in net income of N4.3 billion in 2020.
“In the fourth quarter, our businesses rebounded and profit after tax increased 136 per cent to N2.4 billion (N1.4 billion, adjusting for non-recurring items) from N1.0 billion in 2019, supported by cost management initiatives that reduced operating expenses by N1.4 billion (30 per cent),” he added.
By Aduragbemi Omiyale
On Tuesday, December 17, 2024, President Bola Tinubu will present the 2025 budget to a joint session of the National Assembly.
The size of the 2025 Appropriation Bill is about N47.9 trillion and would be presented to the parliament for approval.
Speaking at the plenary on Thursday, December 12, 2024, the President of the Senate, Mr Godswill Akpabio, said the presentation by Mr Tinubu would be at the chamber of the House of Representatives.
However, it is not certain if the lawmakers will pass the budget before December 31 to allow for a recent budget cycle of January to December.
Recall that on December 3, the senate approved the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025 to 2027.
This was after the President presented this the National Assembly on November 19 ahead of the consideration of the 2025 budget proposal.
In the MTEF/FSP, the government said it planned to borrow about N9.22 trillion from local and foreign sources to finance the budget deficit.
It pegged the crude oil benchmark at $75 per barrel and a daily oil production of 2.06 million barrels at an exchange rate of N1,400 to $1, and a targeted gross domestic product (GDP) growth rate of 6.4 percent.
At the plenary today, Mr Akpabio informed his colleagues that, “The President has made his intention known to the National Assembly to present the 2025 budget to the joint session of the National Assembly on December 17, 2024.”
By Adedapo Adesanya
Nigeria added 150,000 barrels per day to its crude production in November 2024 as it continues to pursue an ambitious 2 million barrels per day target.
According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s oil production rose to 1.48 million barrels per day in November, up from 1.33 million barrels per day the previous month.
In its Monthly Oil Market Report (MOMR), OPEC revealed that at 1.48 million barrels per day, it is the continent’s leading oil producer, surpassing Algeria’s 908,000 barrels per day and Congo’s 268,000 barrels per day.
Business Post reports that OPEC doesn’t account for condensates, which Nigeria’s accounts for in its broader 2 million barrels per day target.
Despite the surge in production levels, Nigeria is still under producing its 1.5 million barrels per day output quota under a deal involving OPEC and 10 other producers known as OPEC+.
OPEC said it relied on primary data gotten through direct communication, noting that secondary sources reported 1.417 million barrels per day as Nigeria’s crude production in November — up from 1.4 million barrels per day in October.
The data also shows that OPEC’s total oil production among its 12 members rose by 104,000 barrels per day in the month under review.
According to secondary sources, the total of the 12 OPEC countries’ crude oil production averaged 26.66 million barrels per day in November 2024.
“Crude oil output increased mainly in Libya, Iran, and Nigeria, while production in Iraq, Venezuela, and Kuwait decreased”, OPEC said.
“At the same time, total non-OPEC DoC crude oil production averaged 14.01 mb/d in November 2024, which is 219 tb/d higher, m-o-m. Crude oil output increased mainly in Kazakhstan and Malaysia,” the organisation added.
In a related development, OPEC trimmed its 2024 and 2025 oil demand growth forecasts for the fifth time this year.
Now, the cartel expects the world’s oil demand growth at 1.61 million barrels per day from the previously 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, a 900,000 barrels per day cut from the previously expected 1.54 million barrels per day.
On the changes, OPEC says 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.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 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 billion.
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