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

FG lists N4.214bn April savings bonds on NGX

Published

3 days ago

May 16, 2024

NewsDirect

The Federal Government has listed its April 2024 Savings Bonds worth N4.214 billion on the Nigerian Exchange Limited platform.

This was disclosed in the market bulletin signed by Godstime Iwenekhai, Head, Issuers Regulation Department of NGX.

According to the bulletin, “Trading License Holders are hereby notified that the April 2024 Issue of the Federal Government of Nigeria (FGN) Savings Bonds was listed on Nigerian Exchange Limited (NGX) on May 13, 2024.”

Details of the Bonds include FGS April 2026, 1.228 million units valued at N1.228 billion at a coupon rate of 17.046 percent, while FGS April 2027, 2.986 million units amounted to N2.986 billion at a coupon rate of 18.046 percent.

The bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria, according to the debt office.

FGN Savings Bond is issued monthly in tenors of two and three years with quarterly payment of coupons (interest) at a rate predetermined and published by the DMO every month.

The retail savings bond product was introduced by the Debt Management Office (DMO) on behalf of the Federal Government in 2017 to democratise its activities in the bond market by making it easily accessible to Nigerians to ensure continuous development of the domestic market and bridge infrastructure deficit which has been a constraint to economic growth.

capital market

LCFE inducts 23 commodities brokers

Published

3 days ago

May 16, 2024

NewsDirect

As part of its capacity building functions, Lagos Commodities and Futures Exchange (LCFE), has onboarded and inducted another 23 Commodities Brokers, the fourth edition in the series, to increase the number of professionals to specialise in various asset classes in the Nigerian commodities ecosystem.

On the list of those inducted last week were the Managing Director, Dynamic Portfolio Limited, Mr Remi Lasaki and many Chief Executive Officers of stockbroking companies in Nigeria.

In his welcome address, LCFE’s Managing Director and Chief Executive Officer, Mr Akin Akeredolu-Ale, urged the inductees join hands with The Exchange to build a virile commodities market that shall be beneficial to all.

“LCFE is working hard to build a market that will benefit the entire Capital Market and its brokers. Each broker can select a commodity and dedicate their focus on it, thereby enhancing your company’s wealth, your individual skill set and contributing to the growth of the Nigerian Economy.

“Together, let us seize this opportunity to build a vibrant and dynamic marketplace that unlocks new possibilities for investors, enhances economic prosperity, and positions Nigeria as a leader in commodities trading.

“The Exchange is actively engaging with the Securities and Exchange Commission to obtain approval for more products like Lithium, diamond and Oil and Gas commodities. Just yesterday, we signed an MOU with a Global Certification Agent Bureau Veritas to certify lithium and other Solid Mineral commodities to be traded on LCFE. Additionally, we have made significant strides in the Cashew ecosystem, signing an MOU with the Cashew Association of Nigeria (CAN), aggregators, and a major cashew processor.

“Eko Gold also represents a pioneering investment opportunity within our commodities ecosystem, leveraging stability and transparency to diversify options, attract capital, and create value across the value chain. LCFE is fully committed to supporting its growth and providing brokers with the tools and guidance needed for effective promotion of the asset classes,” said Akeredolu-Ale.

Corroborating him, the Chairman, Securities Dealing Houses of Nigeria (ASHON), Mr Sam Onukwue, noted LCFE was established for total transformation of commodities exchanges in Nigeria and boost the country’s Gross Domestic Product (GDP).

“The underpinning drive for establishing the exchange was the need to transform and reposition the commodities market and harness opportunities in the commodities ecosystem. This drive will enhance and crate value for all stakeholders in the ecosystem,” he said.

The newly elected President of Chartered Institute of Stockbrokers (CIS), Mr Oluropo Dada, congratulated the inductees and advised them to uphold the ethical standard of the profession and operate with skills and integrity.

Akeredolu-Ale also congratulated the new board and management of Securities and Exchange Commission (SEC), under the new Director General, Dr Emomotimi Agada.

In July last year, the Pan African Exchange inducted 33 commodities brokers, including the first female office holder at Chartered Institute of Stockbrokers (CIS), Mrs Fiona Ahimie.

capital market

Tinubu asks Senate to confirm four board members of SEC

Published

3 days ago

May 16, 2024

NewsDirect

President Bola Tinubu has asked the Senate to screen and confirm four persons appointed as board members of the Securities and Exchange Commission (SEC), the apex regulator of Nigeria’s Capital Market.

The President’s request was contained in a letter read by the Senate President, Godswill Akpabio during the plenary on Wednesday.

The appointed members of the SEC are Emomotimi Agama, Frana Chukwuogor, Bola Ajomale and Samiya Hassan-Usman.

While Agama was appointed as Director-General, Mr Chukwuogor will serve as Executive Commissioner (Legal and Enforcement) of the Security and Exchange Commission. Ajomale was appointed as Executive Commissioner (Operations) while Hassan-Usman was appointed as Executive Commissioner (Corporate Services).

In April, President Tinubu approved the appointment of seven persons as members of the SEC pending their confirmations by the Senate. But, only four names were transmitted to the Senate for confirmation and Tinubu did not give reasons for not including the names of the other three professionals.

In the letter, the President explained that the appointment complied with the provisions of section (1) of the Investment and Security Act of 2007.

“Confirmation of appointment of the Director-General and Commissioners of the Securities and Exchange Commission.

“By the provision of sections 3 and 5 (1) of theInvestment and Securities Act 2007. I am pleased to present for confirmation by the Senate the under-listed four nominees as Director-General and Commissioners of Securities and Exchange Commission,” he said.

The president urged the lawmakers to expedite the screening and confirmation process.

The Senate President thereafter referred the request to the Senate Committee on Capital Markets to report back to the Senate within two weeks.