capital market

Nigeria’s leading FMCGs grow revenue to N504.719bn in H1 2022

Published

2 years ago

August 18, 2022

NewsDirect

Nigeria’s leading consumer goods companies earned a whopping sum of N504.7196 billion as revenue in the half year of 2022, outperforming their earnings in the corresponding period of 2021 of N126.08 billion.

The companies are Dangote Sugar Plc, Nascon Plc, Unilever Plc, Nestle Plc and Cadbury Nigeria Plc. According to the information contained in the half year financial statements of these companies and compiled by research, the companies’ revenues rose by 33.3 per cent compared to half year 2021.

The revenue growth recorded by the companies is remarkable, considering economic disruptions in the global economy occasioned by the ripple effect on energy, power, and food cost, amongst others, caused by the Russia-Ukraine face-off and the global inflationary pressure on household wallets.

The growth in revenue reported by these companies was driven by higher product prices and demand from consumers in the half year of 2022.

The five ranks consumer goods firms quoted on the floor of the Nigerian Stock Exchange by revenues based on published financial statements and also ranked by per cent growth.

Nascon Plc posted revenue of N25.128 billion for the first half of the year 2022 from N17.570 billion in 2021, accounting for an increase of 43 per cent as the firm also grew revenue despite rising cost of sales occasioned by inflation and the Russia-Ukraine war.

Nascon closed last trading day at N11.10 per share on the Nigerian Stock Exchange (NGX). National Salt firm began the year with a share price of N13.20 but has since lost 15.9 per cent off that price valuation, ranking it 129th on the NGX in terms of year-to-date performance.

Cadbury Nigeria Plc leveraged high demands on consumer goods to gain a 50.5 per cent increase in revenue during the review period. The company recorded a revenue of N27.877 billion in half year 2022 from N18.523 billion in 2021, accounting for an increase of 50.5 per cent.

Cadbury closed its last trading day (Tuesday, August 16, 2022) at N14.90 per share on the Nigerian Stock Exchange (NGX), recording a 3.2 per cent drop from its previous closing price of N15.40.

Cadbury began the year with a share price of N8.80 and has since gained 69.3 per cent on that price valuation, ranking it 11th on the NGX in terms of year-to-date performance.

Despite financial and operational headwinds in the first half of the year, Unilever Nigeria Plc reported an 11.89 per cent growth in revenue for the first half of the year 2022 to N43.806 billion as against N39.150 billion in 2021.

The company closed its last trading day on Tuesday, August 16, 2022, at N13.50 per share on the Nigerian Stock Exchange (NGX). Unilever began the year with a share price of N14.50 but has since lost 6.9 per cent off that price valuation, ranking it 113th on the NGX in terms of year-to-date performance.

Dangote Sugar Plc sustained a positive trajectory during the half year ended June 30, 2022, with 181 per cent growth in revenue. The company reported a revenue of N185.457 billion in its half-year 2022 revenue from N65.976 billion a year ago, taking advantage of the rise in sugar price due to operational headwinds in the first half of the year.

Dangote Sugar closed the last trading day at N16.00 per share on the Nigerian Stock Exchange (NGX). Dangote Sugar Refinery began the year with a share price of N17.40 but has since lost 8.05 per cent off that price valuation, ranking it 114th on the NGX in terms of year-to-date performance.

Leading the pack, Nestle Nigeria Plc reported an increase of 29.75 per cent in revenue during the half year as it remained resilient in the operational environment amid volatility in the economy.

Nestle reported revenue of N222.451 billion during the half year of 2022 as against N171.440 billion representing a growth of 29.75 per cent.

Nestle closed its last trading day at N1,300.00 per share on the NGX. The company began the year with a share price of N1,556.50 but has since lost 16.5 per cent off that price valuation, ranking it 130th on the NGX in terms of year-to-date performance.

Vetiva Research (Vetiva) recently released its H2’22 outlook report titled ‘A strange Labyrinth.’ In the Consumer Goods sector report, Vetiva examined factors surrounding and driving FMCGs’ thriving performance and the expectation for the next half year.

Chinma Ukadike, the Consumer Goods Analyst at Vetiva believes that whilst the trend of impressive revenues and bottom-lines across the consumer goods sector has been driven by the growth in volume as evidenced in the sector’s GDP performance, the real headliner is pricing, which has acted as a tailwind for growth in the sector.

Meanwhile, she admits that the role of demand is not to be underplayed, despite the crunch on consumers’ wallets from increasing energy tariffs, lingering pandemic effects and overall inflationary pressures.

In her outlook, whilst she expects the headwind from consumer disposable income to persist, she shared an optimistic view on volumes, which she linked to the expected rise in election spending for the second half of the year.Still, she highlighted the reopened Northern borders as a potential threat to local volumes. On the other hand, she still sees a sluggish half year for consumer discretionary players, given price levels and the state of consumer wallets.

Referring to the impact of the Russia-Ukraine crisis on FMCG players, Ukadike stated that skyrocketing input prices as a result of global supply deficit leaves the industry’s margin on a delicate balance.

She expects that, with the recent pricing hike across board, producers may be unable to really respond with further hikes if costs escalate further.Ukadike expects investors to become increasingly wary of political tensions and uncertainties. However, she does not expect swift sell-offs across the board, given the fundamentals that have driven the current rally.

capital market

Trading on NGX increases by 28%, investors gain N467bn

Published

58 mins ago

May 6, 2024

NewsDirect

The Nigerian Exchange Ltd. (NGX) on Friday recorded 28.14 percent increase in the value of equity transactions, resulting in investors gaining N467 billion.

Specifically, 446.57 million shares valued at N7.10 billion were exchanged in 9,297 deals, in contrast to 665.20 million shares valued at N5.54 billion in 8,446 deals on Thursday.

Consequently, the market capitalisation which opened at N55.856 trillion, gained 0.83 percent or N467 billion to close at N56.323 trillion.

The All-Share Index also added 0.83 percent or 825 points to close at 99,587.25, as against 98,762.78 recorded in the previous session.

As a result, the Year-To-Date (YTD) return rose to 33.18 percent.

Renewed interest in MTN Nigeria, alongside Tier-one banks, Presco Plc, UACN, United Capital, among other leading stocks, sustained the market’s positive trend.

Also, market breadth closed positive with 27 advanced equities outnumbering 20 declined ones.

On the gainers’ chart, Presco led by N22.90 to close at N252.80, Dangote Sugar followed closely by N4.25 to close at N47, while Ellah Lakes Plc gained 30k to close at N3.32 per share.

Jaiz Bank also advanced by 21k to close at N2.35 and Flour Mill rose by N3.25 to close at N36.80 per share.

Conversely, Conoil and Tantalizers led the losers chart by N10.80 and 4k each to close at N97.20 and 36k per share, respectively.

McNichols Plc lost 12k to close at N1.14, Linkage Assurance trailed by 9k to close at 86k and Guinea Insurance shed 3k to close at 30k per share.

Meanwhile, Access Corporation led the activity chart in volume and value with 151.80 million shares worth N2.68 billion, followed by Veritas Kapital with 49.88 million valued at N30.91 million.

United Bank of Africa (UBA) traded 32.89 million worth N845.74 million, Universal Insurance sold 27.14 million shares valued at N9.76 million and Transnational Corporation transacted 21.82 million shares worth N310.32 million.

capital market

NGX-ASI grows by 0 35%, as GTCO stocks trade high

Published

5 days ago

May 1, 2024

NewsDirect

The NGX All-Share Index (ASI) advanced by 0.35% on Tuesday to close at 98,225.63 basis points.

This is compared to the previous day’s loss of 0.28% to close at 97,879.94 basis points.

Generally, the Nigerian stock market closed positively, gaining 345.69 basis points, reflecting a positive market breadth.

The total volume traded advanced by 99.18% to close at N552.21m, valued at N14.92bn and traded in 9,350 deals. GTCO was the most traded stock by volume and value, with N245.46m and N7.95bn units traded, respectively.

At the close of trading, the market recorded 28 gainers, 18 losers, and 81 unchanged. CAP topped the gainers’ list, while DANGSUGAR topped the losers’ list.

Meanwhile, GTCO had the highest volume, contributing 44.45%, while FBNH and ACCESSCORP followed closely.

The value chart also revealed that GTCO contributed the most, with a 53.26% share.

capital market

Dangote Sugar revenue rise by 20.1% in Q1, 2024

Published

5 days ago

May 1, 2024

NewsDirect

…Targets 700,000MT of refined sugar in 4 years

Dangote Sugar Refinery Plc (DSR) has declared an increase of 20.1 per cent in its revenue in its first-quarter result for 2024.

The company posted a revenue of N122.7 billion according to results shared with the Nigerian Exchange.

This is as the Company also unveiled plans to produce 700,000 metric tonnes of refined sugar from locally grown sugarcane in the next four years, through its Backward Integration Programme (BIP).

Chairman of Dangote Sugar Refinery Plc, Aliko Dangote stated this at the company’s 18th Annual General Meeting (AGM) held yesterday in Lagos.

Dangote, at the AGM, said in alignment with the Federal Government of Nigeria’s policy guidelines, DSR continues to focus on and enhance its Backward Integration Project (BIP) by deploying and reviewing project strategies to ensure efficient delivery.

He noted that the 700,000 metric tonnes would meet 50 percent of the current market demand for refined sugar. According to him, the 10-year sugar development plan to produce 1.5 million MT of sugar per annum from locally grown sugarcane remains a germane roadmap to the attainment of the Company’s objectives.

“Our focus is on achieving the revised targets set for DSR Numan Operations, Dangote Adamawa Sugar Limited, and Nasarawa Sugar Company Limited, while we are hopeful that the Taraba State Government will resolve the community payment issues that have led to the stoppage of activities at the Dangote Taraba Sugar Limited, Lau/Tau project.”

He added that “During the year under review, despite the challenges we were faced with, the company significantly scaled up investment in the Backward Integration Projects with the ongoing expansion of the DSR Numan factory refining capacity from 3,000TCD to 9,800TCD year-end.

“The factory will be increased with an additional 5,200TCD to 15,000 TCD (tonnes of cane crushed per day) eventually to meet the need in view of the massive land development activities also going on at the site. The aim is to achieve 24,200 hectares in total by the year 2029.”

He also emphasised that despite the adverse impact on the business environment by the continuous increase in the inflationary trend, lack of liquidity and FX to fund the company’s equipment import among others for the backward integration projects, concerted efforts are ongoing to secure the needed funds for the development of the Nasarawa Sugar Company Limited project at Tunga in Awe Local Government Area of the state.

“This will enable the company to put in place the needed infrastructure for the eventual commencement of full-scale production and ensure that the Dangote Sugar Backward Integration ‘Sugar for Nigeria Project’ is achieved. In the end, over $700 million investment would be committed to the Backward Integration Programme,” he added.

Dangote said that the Dangote Sugar (Ghana) Limited, was established as a subsidiary of the Company during the year under review, in line with the plan to expand its presence in the sugar industry across Africa.

On outlook, he stated that “achievement of the goals of the Sugar Backward Integration Master Plan remains our focus. This will go a long way in delivering the anticipated benefits, especially in FX savings and cushioning its impact on our operations amongst other benefits to the company, all stakeholders, and the nation.”

Group Managing Director/CEO of Dangote Sugar, Ravindra Singhvi said, “Despite these challenges, we are resolute and focused on the delivery of our business targets in the medium to long term.”

He pointed out that “as we continue to navigate through the scarcity and high cost of foreign exchange, escalating costs of raw materials amongst others, our focus is to enhance the effectiveness of our supply chain processes, optimise cost, improve our operational efficiencies and delivery on our Sugar for Nigeria backward integration project.”

He said, “The target is to produce a minimum of 1.5MT refined sugar annually from locally produced sugarcane at our integrated sugar production estates, which is expected to alleviate some pressure on costs and our demand for foreign currency.

“Achievement of a sustainable business remains one of our key strategies and concerted efforts were made towards sustaining the achievements we have recorded in the past,” Singhvi added.