Headlines – First Ideas Limited


-Equities market closed today on a positive note, as NSEASI appreciated by +0.02% to close at 39,485.65 basis points as against +0.07% appreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at -1.95%.
Market breadth closed positive as MORISON led 18 Gainers as against 10 Losers topped by UNILEVER at the end of today’s session – an unimproved performance when compared with previous outlook.
Market turnover closes positive as volume moved up by +24.97% as against -6.05% downtick recorded in the previous session. TRANSCORP, MBENEFIT and GUARANTY were the most active to boost market turnover. GUARANTY and ZENITHBANK topped market value list.
AIRTELAFRI leads the list of active stocks that recorded impressive volume spike at the end of today’s session.
Nigeria economy yet to heal after highest GDP growth since 2014
Nigeria’s economy expanded at the fastest pace since 2014 in the second quarter of 2021, but does not count for much given the economy has only profited from the easing of COVID-19 restrictions that curbed economic activity last year
OPay: From Telnet to Africa’s biggest unicorn
Today, Zhou Yahui, the Chinese billionaire owner of Opera, may have the title of founder/CEO of OPay, but the roots of the company trace back to Telnet, a digital transformation company.
Buhari to submit 2022 budget to NASS in September
President Buhari is expected to submit the federal government’s N14trillion budget proposed for 2022 to the National Assembly in September for appropriation. This is in order to meet his December 31st deadline for signing into law
Reps accuse MDAs of extra-budgetary spending
The House of Representatives on Thursday said agencies of government embark on extra-budgetary spending contrary to the 1999 Constitution (as amended) and the Fiscal Responsibility Act
How equity funding helps startups thrive in challenging economy
Nigerian tech startups have raised $321million in the first half of the year 2021, despite the economic challenges and socio-political environment. Fintech startups like Kuda have raised $80 million and Flutterwave picked a $170 million funding to take its valuation to over $1 billion, making it a unicorn company
COVID pushes Nigeria’s ICT sector to second largest
Nigeria’s economy rose to 5 percent in the second quarter of 2021 the highest it has come in seven years with the information and communication technology (ICT) sector contributing a major share and becoming the second-largest sector, according to the latest data on GDP by the National Bureau of Statistics (NBS).
How NNPC recorded first profit after tax in 40 years
In the last 40 years of its operations, the Nigerian National Petroleum Corporation (NNPC) has consistently recorded losses in its statement of account. In the year 2020, however, the corporation recorded its first profit after tax, a whooping N287 billion. This feat was recorded in the COVID-19 lockdown year
Average Fare Paid by Commuters for Intercity Journey Increased by 0.81% MoM in July 2021 – NBS
The Transport fare Watch report for July 2021 covers the following categories namely bus journey within the city per drop constant route; bus journey intercity, state route, charge per person; airfare charge for specified routes single journey; journey by motorcycle (Okada) per drop; and waterway passenger transport.
FG Spent 91% of Revenue on Debt Servicing in Six Months
The Federal government spent N2.02 trillion on debt servicing in the first six months of this year. This figure represents 90.5 per cent of the total revenue of N2.23tn generated by the federal government within the period.
NNPC Pegs 2022 Base Oil Price at $57/Barrel
The Nigerian National Petroleum Corporation on Wednesday provided a base crude oil price scenario in the medium term, stating that the commodity was pegged at $57/barrel for 2022.
39 million Africans May Fall into Poverty This Year, Says Adesina
President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, has warned that another 39 million people in the continent could fall into poverty at the end of this year.
FRSC Failed to Remit N5.1bn Into Federation Account in Four Years, Says Fiscal Commission
The Fiscal Responsibility Commission (FRC) says the Federal Road Safety Corps (FRSC) failed to remit N5.1 billion into the federation account. The unremitted fund is said to be part of the revenue generated by the agency between 2016 and 2019.

ZENITHBANK Declares N106bn PAT in H1 2021 Audited Results; Proposes 30K Interim Dividend
Zenith Bank Plc released its H1 2021 Audited results for the period ended June 30th, 2021.
Key Highlights
• Gross Earnings declined by -0.2% to N346bn from N346bn in the previous quarter.
• Profit before tax grew by 2.6% to N117bn.
• Profit after tax grew by 2.2% to N106bn.
• Net Assets grew by 2.3% from N1.12tn to N1.14tn.
• Share Price Currently Stands at N24:30k

                                                   ZENITHBANK PLC
                         Q2 UNAUDITED REPORT FOR PERIOD ENDED  30 JUNE
2021 N’m    2020 N’m    % Change
       JUN        JUN   

Gross Earnings 345,559 346,088 -0.02%
Profit(loss) before Taxation 117,059 114,124 2.6%
Taxation (10,940) (10,298) 6.2%
Profit/(loss)after Taxation 106,119 103,826 2.2%
Basic & Diluted Earnings Per share(k) 3.38 3.30 2.4%
Net Asset 1,143,447 1,117,473 2.3%

Corporate Declation
Proposed Dividend 0.30k
Qualification date 10-Sep-21
Payment date 20-Sept-21
Closure date 13- Sept- 21

The Zenith Bank Group recorded a growth in profit before tax of 3%, rising to NGN117 billion from NGN114 billion reported in the previous year. The Group also recorded a 9% growth in non-interest income from NGN116 billion in June 2020 to NGN127 billion in 2021, while interest income dropped by 6% from NGN217 billion to NGN204 billion as yields from some interest-bearing assets declined. This was mitigated by a 26% decrease in interest expense from NGN60 billion in June 2020 to NGN44 billion in June 2021 resulting in an increase in net interest income from NGN157 billion to NGN160 billion in June 2021. Overall, the significant reduction in interest expense by 26% and growth in non-interest income by 9% gave rise to improved profitability.
The Group’s retail journey continues to deliver positive results. Retail deposits grew by NGN38.2 billion from NGN1.72 trillion to NGN1.76 trillion year-to-date (YTD). Savings balances grew marginally by 2% YTD to close at NGN1.18 trillion from NGN1.16 trillion as at December 2020. The drive for increased retail deposits and a low-interest yield environment helped reduce the cost of funding from 2.2% to 1.3% in the current period. However, the low-interest environment also affected the net interest margin, which declined from 9% to 6.5% in the current year due to the re-pricing of interest-bearing assets. Operating expenses grew by 10% YoY but growth remains below the inflation rate. Although returns on equity and assets also reduced from 21.5% to 18.5% and from 3.0% to 2.5%, respectively, the Group improved its Earnings per Share (EPS) which grew 2% from NGN3.30 to NGN3.38 for the half year ended June 2021.
The Group also increased total customer deposits by 8% to close the period at NGN5.77 trillion, which demonstrates growth in the Group’s market share. Total assets grew marginally to NGN8.52 trillion as at 30 June 2021 from NGN8.48 trillion as at 31 December 2020. Despite the challenges imposed by the COVID-19 pandemic and the challenging operating environment, the Group grew its risk assets as gross loans grew by 3% YTD, from NGN2.92 trillion to NGN2.99 trillion. This was conservatively achieved at a low NPL ratio of 4.51% (FYE 2020: 4.29%) and a reduced cost of risk of 1.3% (June 2020: 1.8%). Prudential ratios such as liquidity and capital adequacy also remained above regulatory thresholds at 69.9% and 22.0%, respectively.
Despite the continued prevalence of COVID-19, there is a cautious optimism that the global economy will continue to recover as vaccination programmes are intensified. Locally, Nigeria’s GDP grew by 5.01% in the second quarter and inflation which peaked in March 2021 at 18.17% is gradually trending down (currently at 17.38% as at July 2021). The Group is well-positioned to maximise the opportunities that these recovering fundamentals present while leveraging e-technology to expand the retail footprint to deliver improved returns to all its stakeholders.

Guinness Nigeria Reports N1.26bn PAT in Q4 2021 Results; Proposes 0:46k Final Dividend
Guinness Nigeria Plc released its Q4 2021 audited results for the period ended June 30th, 2021.
Key Highlights
• Revenue grew by 54% to N160bn from N104bn in the previous quarter.
• Profit before tax stood at N17.1bn.
• Profit after tax stood at N12.6bn.
• Net Assets grew by 1.7% from N73bn to N74bn.
• Share Price currently stands at N31:00k
2021 N’m 2020 N’m % Change
Revenue 160,416 104,376 54%
Profit before Taxation 5.769 17,074 -66%
Taxation (4,514) 4.495,000 -200%
Profit after Taxation 1,255 (12,579) 110%
Earnings Per share(k) 57 (574) 110%
Net Asset 74,287 73,038 1.7%

Corporate Declation
Proposed Dividend 0.46k
Qualification date –
Payment date –
Closure date –

Speaking on the announcement, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria Plc said: “The performance of fiscal 2021 showed that the business delivered growth despite the challenging external environment characterized by COVID-19 restrictions and high inflation”.
“Revenues grew double-digit across all key categories, particularly our strategic focus brands Guinness, Malta Guinness as well as our local and imported spirits. This was supported by improved product mix and headline price increases in key brands. Gross margins declined by 3% driven by inflationary pressure, a shift towards more expensive can products given at-home consumption trends, and forex devaluation impacting some materials.” Magunda explained.
The company however revealed that its net finance costs remained on similar level as last year despite the lower debt position, due to the devaluation of Naira impacting the foreign currency-denominated trading balances.
“Tax was impacted by a one-off historic charge. Profit before tax increased to N5,8billion, a 134% growth versus same period last year; and Distribution expenses increased by 22% versus last year behind volume growth due to efficiency improvements across distribution channels”, Managing Director/CEO, Guinness Nigeria Plc, Baker Magunda said.
“Going into the new fiscal year, we are conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending. However, we will continue to focus on our strategy – optimising our route to consumer, innovating at scale to satisfy our consumers and improving cost control – as we continue to emerge stronger from the current crisis. We remain confident about the execution and resilience of our Total Beverage Alcohol strategy as a key driver of sustainable growth in the market”, he added.
The Chair of the Board of Guinness Nigeria Plc, Dr. Omobola Johnson assured that “the Board will continue to support Management in its efforts to sustain global best practices aimed at consistently delivering business growth for stakeholders.
We remain confident that the strategy is comprehensive and robust, and that we are making the right investments in the company to ensure our long-term competitiveness” she said.

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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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