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

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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.

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Transcorp Power Plc grows PBT by 775% in Q1 2024

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Transcorp Power Plc (Transcorp Power), one of the electricity generating subsidiaries of Nigeria’s leading, listed conglomerate, Transnational Corporation Plc (Transcorp Group), has demonstrated impressive financial performance in its released Q1 2024 unaudited financial statements, for the period ended March 31, 2024.

The Company recorded N67.86 billion in gross earnings, compared to N21.04 billion reported in Q1 2023, reflecting a significant increase of 223 percent.

The strong performance is further demonstration of the Company’s strategic focus and effective execution, as part of Transcorp Group’s implementation of its integrated power strategy.

Commenting on the financial highlights, Evans Okpogoro, the Chief Financial Officer said, “The Q1 2024 results saw a gross margin of 51 percent, a cost to income ratio of 70 percent and net profit margin of 30 percent compared to Q1 2023 gross margin of 37 percent, cost to income ratio of 87 percent and net profit margin of 13 percent.

“This highlights the remarkable operational efficiency gains of the Company. Transcorp Power has continued to grow its revenue aggressively and consistently over the last five years.  We expect that by year end 2024, we will see a similar growth trajectory recorded between FY 2022 and FY 2023.”

Transcorp Power MD/CEO, Peter Ikenga, commented on the results, saying, “We are pleased to report further robust financial performance, despite sectoral challenges such as gas supply issues and macroeconomic challenges.  Our ability to sustain growth amidst this environment shows the resilience of our business model and the efficient execution of our strategic initiatives.

“We remain committed to leveraging our strengths to capitalise on emerging opportunities, drive sustainable growth and provide superior value to all our stakeholders.

“We will continue to prioritise ingenuity, operational excellence, corporate governance, and stakeholder engagement, to deliver superior value for our long-term growth,” he added.

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Investors end week’s trading with N173bn loss

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Investors in the Nigerian equities market ended the week’s trading with a N173 billion loss on Friday.

This followed the slump in the share value of Unity Bank, FBNH, Tantalizer, and Deap Capital Management & Trust, amongst others on the trading floor today.

After five hours of trading at the capital market, the equity capitalisation crashed to N56.2 trillion from N56.4 trillion posted by the bourse on Thursday.

Similarly, the All-Share Index (ASI) fell to 99,539.75 from 99,845.91 achieved by the bourse the previous day.

The market breadth was negative as 14 stocks advanced, 19 declined while 87 others remained unchanged in 7,168 deals.

FTN Cocoa Processors led other gainers with 9.60 percent growth in share price to close at N1.37 from its previous N1.25 per share.

R.T. Briscoe, Livestock Feeds, and Royal Exchange also raised their share prices by 9.26 percent, 9.02 percent, and 8.06 percent respectively.

On the flip side, Unity Bank led other price decliners as it shed 10 percent off its share price to close at N1.62 from the previous N1.80 per share.

Tantalizers, Deap Capital, and Caverton Offshore equally shed their share prices by 8.57 percent, 7.35 percent, and 6.83 percent respectively.

On the volume index, United Bank for Africa (UBA) traded 38.715 million shares valued at N880.5 million in 687 deals followed by Guaranty Trust Holding Company (GTCO) which traded 38.296 million shares worth N1.31 billion in 629 deals.

Access Holdings traded 34.339 million shares valued at N584.5 million in 660 deals.

On the value index, banking stocks led the way again as GTCO recorded the highest value for the day, trading stocks worth N1.31 billion in 629 deals followed by UBA which traded stocks worth N880 million in 687 deals.

Zenith Bank traded equities worth N875 million in 622 deals.

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NGX: Sell-offs in banking stocks drop value of transactions down 2.60%

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Bearish sentiment persisted on banking stocks at the equity market on Friday, making the value of transactions traded on the floor of the Nigerian Exchange Ltd.(NGX) down by 2.60 per cent.

Analysis of the market activities indicated trade turnover settled lower relative to the previous session.
Specifically, investors transacted a total of 257.86 million shares valued at N5.40 billion exchanged in 7,168 deals, as against 285.91 million shares worth N5.54 billion exchange in 7,726 deals posted on Thursday.
Consequently, the market capitalisation, which opened at N56.469 trillion, shed N173 billion or 0.31 per cent to close at N56.296 trillion.
The All-Share Index also dropped 0.31 per cent or 306 points to settle at 99,539.75, compared to 99,845.91 recorded in the previous session.
As a result, the Year-To-Date (YTD) return dipped to 33.12 per cent.
Sell-offs in Guaranty Trust Holding Company (GTCO), FBN Holdings, Zenith Bank,  Access Corporation,  Stanbic IBTC Bank, Jaiz Bank, as well as United Capital and Unilever Nigeria, among other top decliners, drove the market to a negative terrain.
Meanwhile, market breadth closed negative with 20 losers and 14 gainers.
On the losers’ chart, United Bank led by 10 per cent to close at N1.62, FBN Holdings followed by 9.83 per cent to close at N24.30, Tantalizers declined by 8.57 per cent to close at 32k per share.
Deap Capital Management shed 7.35 per cent to close at 63k and Caverton went down by 6.83 per cent to close at 1.50 per share.
On the gainers’ chart, FTN Cocoa Processors led by 9.60 per cent to close at N1.37, RT Briscoe trailed by 9.26 per cent to close at 59k, Livestock Feed gained N1.45 per share.
Royal Exchange Assurance added 8.06 per cent to close at 67k, while Consolidated Hallmark Plc rose by 7.44 per cent to close at N1.30 per share.
On the activity chart, UBA led in volume with 38.72 million shares traded in value of N888.55 million, while GTCO led in value with 38.30 million shares worth N1.31 biliion.
Access Corporation also sold 34.34 million shares worth N584.54 million, Zenith Bank traded 24.41 million shares worth N875.85 million and The Initiative Plc transacted 17.52 million shares worth N34.13 million.
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