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Cadbury Nigeria Plc Reports N516m Loss in Q2 2021 Results;(Share Price:N9.00K)

Cadbury Nigeria Plc released its Q2 2021 Unaudited results for the period ended June 30th, 2021.

 Key Highlights

  • Revenue grew by 16% to N18.5bn from N15.9bn in the previous quarter.
  • Loss before tax stood at N516m.
  • Loss after tax stood at N516m.
  • Net Assets declined by -2.8% from N13.6bn to N13.2bn.
  • Share Price Currently Stands at N9:00k

Q2 UNAUDITED REPORT FOR PERIOD ENDED 30 JUN

 2021 N’m2020 N’m% Change
 JUNJUN 
Revenue18,52315,91716.4%
PBT(516)767-167.3%
Taxation   –(229.997-100.0%
Profit(516.167)536.660196.20%
Basic EPS(N)(27)29193.1%

·                     BALANCE SHEET INFORMATION

Net Asset13,19113,566-2.8%

 

First Bank grows half-year profit by most in 6yrs

First Bank Nigeria Holdings (FBNH) Plc has posted its highest profit in six years in the first half of 2021 as non-interest income surged.

The tier-one lender grew profit by 6.9 percent to N38 billion in the first half of 2021 compared to N35.6 billion in the same period last year

First Bank recorded higher profit during the period despite a plunge in interest income because of the surge in non-interest income.

Interest income plunged 20.9 percent to N103.8 billion in H1 2021 from N131 billion in the same period last year.

However, non-interest income surged 48.1 percent to N118.7 billion from N80.1 billion in the periods under review.

“FBN Holdings delivered a resilient performance in the half year, reflective of our focus on strengthening the organization in recent years. We remain committed to our strategic objective of driving further stability in performance, as well as delivering sustainable growth over the years to come.

In line with our focus on revenue diversification, we continue to grow our non-interest income as we progressively become a more transaction-led institution and implement innovative and technological driven measures to improve overall efficiency,” U.K. Eke, the Group Managing Director said.

The fall in interest income is reflective of Nigeria’s low-interest rate environment.

Yields on treasury bills slumped 84 percent to N1.48 billion compared to N9.6 billion in the period.

“While these points negatively impacted overall revenue generation, we are confident that FBN Holdings can navigate this challenging operating environment and keep delivering sustained innovative solutions that enrich customer experience as well as deepen financial inclusion,

Further analysis of the report shows that the lender’s Fees and commission income jumped 23.8 percent to N69 billion while Fees and commission expense also rose 30 percent to N11.7 billion.

As a result, net fees and commission income surged 26.2 percent to N57.3 billion compared to N46.7 billion in the same period last year.

The lender’s profit before tax rose by 9.1 percent to N45.2 billion in the first half of 2021 up from N41.1 billion last year.

Operating income hit N222.5 billion, up 5.3 percent compared to N211.4 billion in the same time last year. Operating expenses also grew 9.6 percent to N152.6 billion in the first half compared to N139.2 as at June 2020.

Impairment charges for losses stood at N24.5 billion, down by 20 percent from ₦30.7 billion in the same period last year.

Investors Gain N30.03bn as NSEASI Inches Up by 0.15% to Open the Week Positive

Equities market closed today on a positive note, as NSEASI appreciated by +0.15% to close at 38,604.72 basis points as against +0.16% appreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at -4.14%. 

Market breadth closed negative as JBERGER led 17 Gainers as against 24 Losers topped by ETERNA at the end of today’s session – an unimproved performance when compared with previous outlook. 

Market turnover closes negative as volume moved down by -36.90% as against +48.92% uptick recorded in the previous session. TRANSCORP, CILEASING and FCMB were the most active to boost market turnover.  PRESCO and ZENITHBANK topped market value list. 

CILEASING leads the list of active stocks that recorded impressive volume spike at the end of today’s session.        

Bullish Run Sustained as Average Yield Falls 100bps WoW

The Nigerian Treasury Bills (“NT-Bills”) secondary market maintained a bullish run last week on the back of improved system liquidity (N198.9bn long on Friday, 30-Jul-21) and as unsuccessful PMA bids filtered in. As a result, the average yield across the curve dipped 100bps W-o-W to close at 5.90% (from 6.90% the previous week) with the 14-Oct-21, 30-Sep-21, and 16-Sep-21 instruments recording the most buying interest, contracting 219bps, 210bps, and 202bps WoW respectively.


At the Primary Market Auction (“PMA”) last week, the Central Bank offered N22.9bn across all maturities and was met with mixed demand with subscription ratios of 0.6x, 0.2x, and 2.7x for the 91-, 182- and 364-Day instruments respectively. In addition, rates were sustained at the short- and medium-tenured bills while the 364-Day bill declined again by 47bps to stop at 8.20%.


Please see details below:

Auction Date28-Jul-2128-Jul-2128-Jul-21
Allotment Date29-Jul-2129-Jul-2129-Jul-21
Maturity Date28-Oct-2127-Jan-2228-Jul-22
Tenor91-Day182-Day364-Day
Offer (N)7,193,228,000.0047,476,888,000.00161,522,566,000.00
Subscription (N)4,225,989,000.008,419,200,000.00440,286,686,000.00
Allotment (N)3,174,989,000.003,536,200,000.00258,527,896,000.00
Range of Bids (%)2.4900 – 10.00003.3999 – 12.00007.7000 – 9.6000
Previous stop rates2.503.508.67
Current Stop Rates (%)2.503.508.20
Bid-to-Cover Ratio1.3x2.4x1.7x
Allotment Ratio0.4x0.1x1.6x
Subscription Ratio0.6x0.2x2.7x


Going into the week, we expect active trading sessions in the NT-Bills secondary market on the back of improved system liquidity which stood at N230.9bn in the positive as of Friday. Thus, we advise investors to position in relatively attractive yields across the curve. Additionally, qualified investors may take advantage of available Commercial Paper Offerings.

Please see the indicative secondary market NT-Bills rates below:

MaturityTenor (Days)Rate (%) p.a.Yield (%) p.a.
28-Oct-21873.303.33
25-Nov-211154.204.26
13-Jan-221644.634.73
10-Mar-222205.355.53
12-May-222836.246.56
9-Jun-223117.267.74

Rates are valid till 01:45 pm today (02-Aug-21)

*Please note that the minimum subscription for NT-Bills is N100,000.00

Commercial Paper Update: United Capital Plc Offers 11.91%% & 13.00% Yields on 180 & 270-day Tenors Respectively
Please see below, the indicative terms of the proposed offer:

Issuer:United Capital Plc
ArrangersFSDH Capital Limited, United Capital Plc, UCML Capital Limited
Series:56
Tenor:180 days270 days
Implied Yield:11.91%13.00%
Discount Rate:11.25%11.86%
Maturity:Tuesday, 01 February  2022Monday, 02 May 2022
Pricing Method:Fixed Price
Target Size:Up to N20 Billion
Offer Open:Thursday, 29 July 2021
Offer Close:Wednesday, 04 August 2021
Allocation:Wednesday, 04 August 2021
Funding Date:Thursday, 05 August 2021
Issuer Rating:‘A’ by DataPro Limited; ‘A-‘ by Agusto & Co. Limited
Minimum Subscription:N5   million and multiples of N1,000 thereafter
Use of Proceeds:Short-term working capital requirements
Tax Consideration:Free and clear of withholding taxes

Offer Valid till 09:00 am on Wednesday (04-Aug-21)
*Please note that the minimum subscription for Commercial Papers is N5,000,000.00.


 FGN Bonds Update: Average Yield Dropped Marginally by 2bps WoW

We witnessed a mixed performance in the FGN Bond secondary market last week, as investors adjust their portfolios with relatively attractive yields across the curve. Consequently, the average yield on all instruments contracted slightly by 2bps W-o-W to close at 12.07% (from 12.09% the previous week).

Specifically, the short- and long-tenured instruments witnessed the most demand, as average yield dipped 15bps and 4bps W-o-W respectively.

Going into the week, we expect a sustained bullish trend in the secondary market particularly in the short- to mid-end of the curve. Therefore, we maintain our advice that investors position in attractive yields along the curve, particularly at the mid-dated instruments which gained the previous week.


Please see indicative secondary market bonds rates below:

BondTenor (Years)Yield (%)Coupon (%)Implied Price (N)
Apr-2329.3012.75105.37
Mar-2439.8014.20109.90
Mar-25410.3013.53109.56
Jan-26511.1012.50104.82
Mar-27611.6016.29118.93
Feb-28711.5513.98110.95
Jul-341311.9512.15101.28
Mar-361512.4012.4099.96
Apr-371612.3016.25127.13
Apr-492812.3014.80119.53

Rates are valid till 01:45 pm today (02-Aug-21) 

*Please note that the minimum subscription for FGN Bonds is N20,000,000.00

Nigeria’s economic growth still far from reducing poverty

Nigeria’s GDP per capita income or what economists interpret as economic growth per head is projected to rise in 2022, after seven years of decline following a growth forecast of three percent by the Economic Intelligence Unit (EIU), the world leader in global business intelligence

Second Niger Bridge: Enhancing social integration and regional connectivity

One of the most profound sayings in the southeast region of Nigeria, is an adage that says, “The world is a marketplace”. When put in clearer context, this adage carries two meanings, the first, which seems to be the most obvious, is that the Igbo ethnic nationality, fondly called Ndigbo, spread across the southeast and parts of the South-South, are majorly traders and business-minded people. The second, which carries a deeper connotation, is that the marketplace is the core of social, community and business interaction.

 

 

Office space demand drops to 5-year low

Prime office space suppliers are not having it easy as they struggle to retain occupancy and seek strategies to get new tenants. Transaction activity, particularly new leases, dropped in the first half of 2021 to the worst levels the market has recorded since the 2016 recession

Elahor Aiboni, first female MD to lead Shell Nigeria

World energy giant, Shell, has named Elohor Aiboni as the managing director of its Nigeria deep-water business, Shell Nigeria Exploration and Production Company Limited (SNEPCo) with effect from 1st August 2021.

Elohor is the first female to lead a Shell exploration company in the over 60 years of Shell’s operations in Nigeria. She succeeds Bayo Ojulari who retired on 31st July 2021 after five years as SNEPCo’s MD and over 30 years of service in the Shell group

Nigeria’s idle gas projects can leverage $53trn fund

In a world where funding for fossil fuel investment is waning, global Environmental Social and Governance (ESG) fund projected to hit $53 trillion by 2025 can present a system of autarky for over billion dollars’ worth of idle clean energy projects stranded across Nigeria.

Oil Bulls Remain Confident Despite COVID Concerns – OIR 300721

  Crude prices drew hefty support this week from U.S. inventory dynamics, with commercial stocks falling to their lowest since January 2020 and indications that the tightening is set to continue.

IMF’s Borrowing to Nigeria, Other Low-Income Countries to Hit $48bn

The International Monetary Fund (IMF) has projected that its financial assistance to low-income countries, most of which are in Africa, could hit $48 billion covering the current COVID-19 pandemic and its immediate aftermath

BDC Market Implodes as the CBN Stops Sale of Dollars to the Parallel Market

Nigeria’s Bureau de Change (BDC) market went into a tailspin at the beginning of the week as traders buckled under the Central Bank of Nigeria’s decision to discontinue the sale of weekly foreign exchange (FX) to the market.  

CBN to Refund Minimum Capital Deposits and Licensing Fees to BDC Promoters

The Central Bank of Nigeria (CBN) has released a circular stating that it will start an immediate refund of capital deposit to Bureaux de Change (BDC) promoters with pending applications.

About the Author

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First Ideas Limited is an investment and financial advisory company established in 1994 to provide advisory services to high net worth individuals, trust funds, financial institutions and medium sized companies in growth sectors.

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