Afrinvest Oil & Gas Sector Report 2022 – Treading the Thin Line

On the supply side, global oil output increased by 1.4mbpd to average 95.0mbpd in 2021 (2020: 93.7mbpd), leaving a shortfall of 1.6mbpd in contrast to excess supply observed in 2020 (2.7mbpd). We observed that the OPEC+ supply to the market was subdued, partly due to technical and operational challenges encountered by members and allies. Source Afrinvest Read More

W’Bank Commits $8.5bn to Nigeria, Faults N6.7tn Subsidy

– The World Bank has committed $8.5 billion to Nigeria to fund critical issues ranging from agriculture to education. Disclosing this on Thursday in Abuja during a summit organized by the Emergency Coordination Center, the World Bank Country Director to Nigeria, Shubham Chaudhuri, noted that the amount was the largest of any country. Source Punch Read More

Funding, insecurity Stall $2.8b AKK Project, Gas Export

– Barely six months to expected completion of the $2.8 billion Ajaokuta-Kaduna-Kano (AKK) pipeline project, indications emerged yesterday that the delivery of the project may remain elusive despite heightened momentum for Nigeria to export gas to Europe. Source The Guardian Nigeria Read More

Bank of England Increased Rate to 1.75% in August 2022, up by 0.50%

– The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 3 August 2022, the MPC voted by a majority of 8-1 to increase Bank Rate by 0.5 percentage points, to 1.75%. Source Bank of England Read More

Again, SEC Warns Investors against Illegal Crowdfunding Platforms

– The Securities and Exchange Commission (SEC) has renewed its warning to investors patronizing unregistered investments crowdfunding platforms. Source THISDAYLIVE Read More

Setting Up a Business in Africa: 6 Reasons Why Payroll Management Fails

– Payroll is a pivotal component of organizational success, but it is also one of the most difficult to calibrate due to its complexity. Payroll is more than just paying employees on time; it requires a high level of numerical skill, administrative know-how, and compliance expertise. Source Proshare  Read More

Stakeholders Disagree Over FG’s Approval to Lease 3 Aircraft for Nigeria Air

– The approval of the Federal Executive Council for the country’s national carrier, Nigeria Air, to lease three aircraft to enable it to commence operations has caused some controversy in the aviation sector with experts disagreeing on the best course of action. Source The SUN Read More

Oil Prices Steady as Market Juggles Supply Shortage, Demand Worries

– Oil prices steadied in Asia trade on Friday, after hitting their lowest levels since before Russia’s February invasion of Ukraine in the previous session, as the market juggled concerns of supply shortage and slower demand. Source Reuters Read More

FCCPC: Disconnecting Customers’ Electricity Supply Without 10-Day Notice Is Unlawful

 – The Federal Competition and Consumer Protection Commission (FCCPC) says it is illegal for electricity distribution companies (DisCos) to disconnect customers from the power supply without a 10-day prior notice from the date of bill delivery. Source TheCable Read More

Kora is the New Commonwealth-Sourced Foreign Direct Investment (FDI) Project for the West Midlands

– As the Commonwealth Games opened in Birmingham, the UK, pan-African payments infrastructure, Kora was announced as a new Commonwealth-sourced foreign direct investments (FDI) project for the West Midlands. Source Kora Read More

FG to Generate N160bn from Call, Data Taxes

 – The Federal Government will generate about N160.46bn from excise duty on telecommunication services in 2023. According to the Nigerian Communications Commission, the combined revenue of operators in the GSM, Fixed Wired, and Internet Service Providers was N3.21tn in 2021. Source Punch Read More

Nigeria Computer Society Inducts 854 New Members

– Nigeria Computer Society (NCS), the umbrella body of all Information Technology (IT) professionals in Nigeria, today, August 4 2022 inducted eight hundred and fifty-four (854) new members. Source TechEconomy Read More

Pension Assets Hit N14.2trn on Improved Compliance

– Nigeria’s total pension assets under management (AUM) hit N14.2 trillion at the end of May 2022, as the number of registrations into the Contributory Pension Scheme rose to 9.7 million. Source BusinessDay Read More

Investors Gain N81.01bn as NGXASI Inches up by 0.28%; Open Repo Rate Contracts by 0.17% to Close at 14.50%%; NAFEX Rate Appreciates to N426.17

1. EQUITIES MARKET 

 1.1 NGX – Listed Equities

Nigerian Equities Market erased previous day loss to close in the positive territory as sell pressure wanes

 

The NGX All-Share Index inched up by 0.28% to close at 50,722.33 basis points as against 0.03% loss recorded to close at 50,582.30 basis points at the end of the previous trading session. In Naira terms, the NGX Market CAP records N81.01bn gain.

 

YTD, the NGXASI Stands at +18.74%

The total volume traded advanced by +14.08% to close at 148.81m, valued at N1.93bn and traded in 4,091 deals. HONYFLOUR was the most traded stock by volume with 16.88m units traded while GTCO was the most traded stock by value which is put at N445.68m.

Sectoral performance was broadly positive as eleven (11) NGX sector index closed northward, five (5) closed southward while two (2) closed flat. The NGX Consumer Goods Index inched up by 1.52% to top the gainers while NGX Insurance Index dipped by -0.40% to the losers’ chart.

Dangote index closed flat at 138.37 basis points while Elumelu index also closed flat at 109.23 basis points.

At the close of trading, market recorded 22 gainers to 9 losers and 64 unchanged. ETERNA topped the list of gainers while UNILEVER topped the list of losers. Thus, market breadth closed positive as the Market Breadth Index (MBI) is put at 0.20x.

 

 

Volume and Value Contribution

HONYFLOUR led the volume’s chart with 16.88% contribution and closely followed by GTCO and FBNH

 

GTCO tops the value’s chart with 27.47% contribution and closely followed by ZENITHBANK and MTNN

 

NGX Corporate News

Tourist Company of Nigeria Plc has notified of the resolutions passed at the 57th Annual General Meeting of the Company held on Friday, July 29, 2022 at the Federal Palace Hotel & Casino, 6 – 8 Ahmadu Bello Way, Victoria Island, Lagos, by 11:00 am

 

1.2 NASD OTC Exchange – Unlisted Equities

The NASD market index dipped by 0.09% to close at 761.27 basis points as against 1.85% loss recorded previously to close at 761.92 basis points

The total volume traded declined by -61.20% to close at 0.463m units valued at N6.65m and traded in 8 deals.

At the close of trading, NASD OTC market recorded zero (0) gainer(s) to one (1) loser(s)

Volume and Value Contribution

SDFOODCPT led the volume chart with 75.17% contribution While SDNIPCOPLC led the value chart with 52.33% contribution

 

NASD Earnings Summary

No Financial statement was released on the NASD OTC Exchange today.

 

NASD Corporate News

No Corporate News was released on the NASD OTC Exchange today.

 

1.3 Global Indices

On the global scene, the Argentina MerVal Index leads the top five gainers with 2.40% gain while the Russia MICEX Index tops the top five losers with -2.92% loss as of 4pm Nigerian Time

 

1.4 African Indices

Similarly, on the African scene, the South Africa ASI tops the top five gainers with 1.17% gain while the Zimbabwe All Share Index tops the top five losers with -0.98% loss as of 4pm Nigerian Time

 

 

2. BONDS AND FIXED INCOME MARKETS

 

2.1 Debt Market Size

The FMDQ Debt Market Size was not available as of the time of finalising this report.

 

2.2 Overnight and Open Repo (OPR)

The overnight lending rate closed flat at 15.00% while the Open Repo (OPR) rate contracted by 0.17% to close at 14.50%

 

 

3. COMMODITIES MARKET

 

3.1 AFEX Indices

The AFEX ACI declined by 0.90% to close at 454.00 points while the AEI also closed flat at 188.96 points

 

3.2 AFEX Commodity Prices

Paddy Rice advanced by +0.16% to top the gainers’ chart while other commodities closed flat.

 

3.3 Global Commodity Prices

Gold recorded 1.01% loss while Silver also declined by 1.63% as of 11:45 NY time

 

In the energy market, Brent advanced by 1.68% while WTI also advanced by 1.66% as of 10:50AM Central Daylight Time (CDT)

 

 

4. CURRENCY/ FX MARKET

The naira closed flat at the I&E FX Window at N428.13/USD while the NAFEX rate appreciated by 0.43% to close at N426.17

 

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Nigeria targets $600m on resumed export of Hibiscus flowers to Mexico

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Start-ups worse hit by surging inputs costs

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Honeywell Flour Mills Plc Declares N2.4bn Loss in Q1 2023 Results, (SP: N2.07k)

Honeywell Flour Mills Plc released its Q1 2023 Unaudited results for the period ended June 30th, 2022.

Key Highlights

• Revenue grew by 23% from N33.06bn to N40.67bn.
• Loss before tax stood at N2.19bn
• Loss after tax stood at N2.4bn
• Share Price Currently Stands at N2.07k

Honeywell Flour Mills Plc. (HFMP), a leading foods manufacturer in Nigeria, today announced financial figures for the quarter that ended June 30, 2022. The company, which became a member of Flour Mills of Nigeria Group on the 12th of May 2022 after the successful completion of the acquisition transaction continues to take pragmatic steps towards building a more sustainable brand.

Financial Results Summary

1. Revenue of N40.6 billion, up by 23% compared to N33.0 billion recorded in the corresponding quarter of 2022
2. 4 billion toss for the period compared to a profit of N15Om in the corresponding quarter of 2022

The quarter reflects the impact of the unprecedented socio-economic environment and global inflationary strains. These market disruptions led to incessant increases in input costs, particularly of wheat and diesel which pushed up prices of the company’s products relative to locally produced substitutes. HFMP is expected to be earnings and margin accretive during the latter part of this year.

Following the company’s acquisition by FMN, Nigeria’s leading producer of quality products and owner of the iconic brand ‘Golden Penny’, HFMP is now poised to become a robust Nigerian food processing entity that can better leverage financial, technical, and human resources as part of Nigeria’s largest foods company.

Speaking on the plans in place by the company to ensure that the HFMP continues to maintain market relevance, Nassib Raffout, the Managing Director of the company commented:

“We are confident that our performance in the second quarter of the year will record significant improvement. We are deploying measures to cushion the effect of the exacerbating input prices while also strengthening and expanding our business portfolio by accessing new markets and driving margin improvement through operational efficiency. We will continue to execute our five core strategic pillars through three (3) key drivers of growth, efficiency, and capability. And with consumer behaviour evolving faster than ever, we are adapting to this new reality by executing with speed to meet the needs of our multiple stakeholders. We are committed to investing in our capabilities, know-how, and talents to continue to create value”.

HFMP is committed to innovating across all its value chains for the purpose of developing quality, healthy, and nutritious food products to Nigeria’s growing population and enhance manufacturing and supply chain efficiencies.

Nigerian Exchange Group Plc Reports N820m PAT in Q2’22 Results; (SP: N21.10K)

Nigerian Exchange Group Plc released its Q2 2022 Unaudited results for the period ended June 30th 2022.

Key Highlights

• Revenue grew by 140.4% from N1.59bn to N3.82bn.
• Profit before tax stood at N1.22bn
• Profit after tax stood at N820m
• Share Price Currently Stands at N21.10k

“In 2021, we took strategic steps to reorganize our business by laying the foundation for the rebirth of our franchise as we became a fully-fledged for-profit making company with a clear focus on maximizing resources and improving stakeholder returns. Our performance in the first half of 2022 is a testament to our ability to deliver long-term value. We recorded impressive growth in our top line to deliver a profit before tax of N1.22 billion despite the peculiar challenges inherent in our operating environment.

Our goal remains to sustain our position as a leading integrated market infrastructure group in Africa, by diversifying our revenue streams, and identifying and investing in new businesses. We remain focused on building formidable businesses through broader and deeper involvement in every sphere of the capital market value chain through informed investments in profitable verticals and enhanced risk management practices, without losing sight of emerging opportunities in unrelated businesses within the Sub-Saharan African region”.

Group Financial Performance Review

• Gross earnings recorded a significant growth of 138.3% to N4.22 billion from N1.77 billion as of June 2021 benefitting primarily from a 140.4% growth in revenue (91% of gross earnings), and 119.6% growth in other income (9% of gross earnings).
• Revenue growth of 140.4% (N2.23 billion) to N3.82 billion in June 2022 from N1.58 billion recorded in June 2021 was driven by:
  • 165.1% growth in treasury investment income (26.6% of revenue) to N1,017.4 million in June 2022 relative to N383.7 million in the comparative period in 2021 driven largely by relatively higher yields on the Group’s treasury bills, bonds and fixed deposit investments.
  • 198.4% growth in transaction fees (60.7% of revenue) to N2,320.7 million in June 2022 from N777.7 million recorded in June 2021 due to a significant increase in trading activities in Nigerian Exchange Limited (“NGX” or “The Exchange”).
  • 18.6% increase in listing fees (9.5% of revenue) to N363.8 million in June 2022 from N306.8 million in June 2021 buoyed by improved listing on the Exchange in the first half of 2022 relative to the first half of 2021.
  • Rental income (1.4% of revenue) earned from NGX Real Estate lease of office floor spaces recorded a 60.5% increase from N32.2 million in June 2021 to N51.7 million.
  • 15.4% decline in other fees (1.8% of revenue) to N69.7 million in June 2022 from N82.4 million in June 2021 which represents rental income from the trading floor, annual charges from brokers, dealing license and membership fees earned by the Group.
• 119.6% increase in other income (9% of gross earnings) driven primarily by:
  • 376.5% improvement in market data income (56% of other income) to N220.94 million from N46.3 million reported in June 2021 which is made up of technology income, other sub-lease income, and penalty fees.
  • 15.99% growth in other operating income (31% of other income) from N105.6 million in June 2021 to N122.5 million in June 2022.
• Total expenses grew by 102.6% from N1.9 billion in June 2021 to N3.9 billion in June 2022 primarily driven by a 231.6% growth in operating expenses (59.1% of total expenses) to N2.3 billion from N702.9 million in June 2021. This was largely as a result of a finance cost (57% of operating expenses) of N1.3 billion related to a term loan taken during the period. Personnel expenses (34.4% of total expenses) also grew by 27% from N1.01 billion in June 2021 to N1.35 billion during the period under review.
• Operating profit of N273.2 million in June 2022 from an operating loss of N177.2 million in June 2021, as a result of 138.3% growth in gross earnings.
• Profit before income tax grew by 134.4% to N1.22 billion in June 2022 from N521.9 million in the corresponding period in 2021 due to an impressive growth in the top line which was more than sufficient to mitigate the impact of the increases in key expense lines.
• Despite an increase in effective tax rate to 32.95% relative to 13.84% in June 2021, profit after income tax grew by 82.4% to N820.2 million from N449.7 million. This resulted in a decline in profit after tax margin to 19.45% from 25.42% recorded in June 2021.
• Total assets rose by 59.9% to N39.8 billion from N24.9 billion in Dec. 2021, driven primarily by 91.3% growth in investment in associates to N31.99 billion from N14.8 billion in Dec. 2021, and 116.8% growth in Cash and Cash equivalent to N4.3 billion from N2.2 billion in Dec. 2021.
• Total liabilities recorded a 394.7% increase from N3.8 billion in Dec. 2021 to N18.6 billion as a result of a N14.5 billion term loan used to facilitate the increase in investment in select associates.

Chemical and Allied Products Plc Declares N904m PAT in Q2’22 Unaudited Results; (SP:N17.00K)

Chemical and Allied Products Plc released its Q2 2022 Unaudited results for the period ended June 30th 2022.

Key Highlights

• Revenue grew by 52.7% from N5.73bn to N8.75bn.
• Profit before tax stood at N1.33bn
• Profit after tax stood at N904m
• Share Price Currently Stands at N17.00k

 

Chemical and Allied Products Plc (“CAP” or the “Company”), Nigeria’s leading paints and coatings company, announced its unaudited results for the period ended 30 June 2022.

Highlights

• Revenue 53% (27% LfL1 ) ahead of H1 2021 at N8.7 billion.
• Gross profit 102% higher on the back of strong revenue growth and higher gross margin, up 988 bps.
• Operating profit 115% higher at N1.3 billion.
• Profit before tax was N1.3 billion, up 91% from N697 million in H1 2021.

Commenting on the results, Managing Director, Bolarin Okunowo, stated:

“We are excited with the results for this half year, having delivered double digit growth in revenue and triple digit growth in operating profit. We are seeing encouraging results from recent investments in our brands and distribution infrastructure and are confident that these investments will further yield positive results as well as expand the frontiers of our business. Inflationary cost pressures remain a key concern and we are focused on delivering operational efficiencies and taking proactive pricing actions to combat the impact of rising costs.