Over 100 Million Rural People Reached As IFAD’s Fight Against Hunger, Poverty

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Over 100 Million Rural People Reached As IFAD’s Fight Against Hunger, Poverty

As the COVID-19 pandemic raged around the world pushing millions of more people into hunger and poverty, the UN’s International Fund for Agricultural Development (IFAD) increased its support for the most vulnerable and marginalized people, according to the IFAD Annual Report 2020 released today.

With 203 ongoing projects and total financing of US$7.5 billion, IFAD was able to reach 123 million people in 2020.

“Despite the challenges of 2020, we remain convinced that our vision of a world free of poverty and hunger is attainable and should remain in focus,” said Gilbert F. Houngbo, President of IFAD.

“Doing more to build the resilience of rural people does not only mean scaling up investments. It also means going further to reach the people most likely to be left behind, to ensure the rural women and men IFAD serves are better prepared to overcome the challenges they face.”

IFAD-Brand Spur NIgeria
IFAD-Brand Spur NIgeria

In April 2020, IFAD launched the Rural Poor Stimulus Facility (RPSF) with support its Executive Board and member states such as Canada and Germany that made contributions. The Facility has helped rural people hang on to their livelihoods in this difficult period while also maintaining the supply of food.

With supply chains and transportation disrupted, small-scale farmers have received seeds, fertilizer and other support to continue planting and production. Support for digital services like e-marketing and e-money was increased.

In 2020 IFAD stepped up its work with particularly marginalized groups including women, youth, disabled persons and indigenous peoples. New grass-roots activities were started, and 10 times as many people participated in the Fifth Global Meeting of the Indigenous Peoples’ Forum as ever before.

In East and Southern Africa, 2020 was a challenging year with multiple shocks – climate change, locust invasions and the COVID-19 pandemic – posing a serious threat to the livelihoods of rural people. Economic activity also suffered from disruptions from the movement of people and goods and the declining global commodity prices. For the first time in 20 years, the Gross Domestic Product (GDP) in the region declined.

“IFAD in the region is working with partners to help strengthen the resilience of small-scale farmers. In 2020 alone, we invested US$ 167.4 million in three new projects (in Eritrea, Kenya, Tanzania) bringing our operations to 42 ongoing projects with a total investment of US$1.6 billion. Our commitment to rural transformation is much stronger, now that the world has realised that for a sustainable food system we need resilient farmers,” said Sara Mbago-Bhunu, IFAD Regional Director for East and Southern Africa.

As part of IFAD’s contribution to help address the impact of the COVID-19 pandemic on the livelihoods of farmers in East and Southern Africa, IFAD repurposed US$ 47.6 million from its existing activities. In addition, through the Rural Poor Stimulus Facility, IFAD allocated US$26.4 million as emergency grants to assist rural people in accessing inputs for crop production and rural financial services, and to sell their products in the local markets.

“Before the project, I was just sitting at home, because my husband did not have any money. Then I started making money. Now people admire us,” said Mariamo, a young woman artisanal Fisher in Mozambique. IFAD has supported the Artisanal Fisheries Promotion Project to help coastal communities like Mariamo’s become resilient and increase incomes despite the devastating effects of climate change.

“We have realised the value of digital platforms and we will maintain our digital engagement post-COVID19,” Charles Wachira Mwangi, Chairperson of G-Start Youth Group. The youth group was able to continue selling their banana flour during the COVID-19 pandemic, using digital platforms like Facebook, Twitter and WhatsApp. In Kenya, the G-Star Youth group is one of the groups benefiting from IFAD supported Upper Tana Catchment Natural Resource Management Project.

The report outlines how IFAD is revamping its financial infrastructure to be able to invest more and reach more rural people while managing risks. In 2020 IFAD obtained AA+ credit ratings from Fitch and Standard and Poor’s, creating opportunities to mobilize more resources. Ongoing decentralization, with a third of IFAD staff now in the field, means that IFAD can increase partnerships and policy engagement and improve results by being closer to its clients.

IFAD received record commitments of funding from the Member States following the launch of the Twelfth Replenishment of its resources (IFAD12) in February 2020, with the goal of doubling the Fund’s impact by 2030. With a target programme of work of at least $11 billion for 2022-2024, IFAD expects to raise the incomes of 83 million people by at least 20 per cent. New programmes will increase attention to climate change impacts and resilience (ASAP+), and leverage new investment by the private sector (the Private Sector Financing Programme, or PSFP).

UAC Launches Mr Bigg’s Bakery In Amuwo Odofin

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UAC Launches Mr Bigg’s Bakery In Amuwo Odofin

UAC Restaurants Limited in collaboration with CEESAM International Limited, a UAC Restaurants’ franchisee, has commissioned a state-of-the-art bread bakery in Amuwo Odofin, Festac area of Lagos to cater to the neighborhood.

Mr. Bigg’s Family Loaf Bakery was officially unveiled recently and in attendance was Managing Director of UAC Restaurants Limited, Mr. Debola Badejo, Chairman of CEESAM International Limited, Hon. Sam Nwaire and other dignitaries.

The bakery is equipped with modern-day bakery facilities and the plant has the capacity to feed the Festac, Mile 2, Oluti, Amuwo Odofin, Ojo and the environs.

Speaking on the importance of bread business to UAC Restaurants Limited, Mr. Debola Badejo said, “We are constantly looking for ways to offer new and affordable products to the market and Mr Bigg’s family loaf bread, is one of the many new retail offerings that we have in store for Nigerians.”

On the expansion of bread offerings across the country, Mr. Badejo stated that this is one of the many bakeries that we are going to open across Nigeria, and this is in addition to our existing Mr Bigg’s restaurant as well as Debonairs Pizza stores.

Badejo said, “The Mr Bigg’s family loaf is one of the key growth drivers for our retail business.

UAC Launches Mr Bigg’s Bakery In Amuwo Odofin

While our traditional Mr Bigg’s and Debonairs Pizza restaurants remain our core businesses, we believe our retail unit has the opportunity to attract wider patronage and ensure Nigerians have access to Mr Bigg’s products outside our restaurants.”

Reiterating the importance of bread to their business, Hon. Sam Nwaire, Chairman, CEESAM International Limited, a UAC Restaurants’ franchisee said that Mr Bigg’s family loaf has the capacity to contribute about 25 per cent to the business turnover.

According to him, “We felt there is a need to do some add on and that informed the decision to float a bakery to support the business.”

Airtel Africa Revenue Grew By 30.7% to $1.1B, Mobile Money Up 53.7%

Esan Bolaji
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Airtel Africa Revenue Grew By 30.7% to $1.1B, Mobile Money Up 53.7%

Airtel Africa posted 30.7% growth in revenue to $1,1B, driven by constant currency growth of 33.1% partially offset by currency devaluations, mainly in the Nigerian naira (6%) and Zambian kwacha (24.2%), in turn partially offset by appreciation in the Central African franc (6.6%) and Ugandan shilling (5.3%) as indicated in the recently released financial results for the period ended 30 June 2021.

Airtel Africa’s revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region.

The telecoms company’s profit after tax was $142m, a 148.7% increase on the $57m of the prior period. This increase was largely due to higher operating profits along with stable net finance costs, which more than offset the increase in tax charges due to increased profits.

Airtel africa
The logo of telecommunications company Airtel is pictured on an umbrella and chairs set up by vendors in Abuja. REUTERS/Afolabi Sotunde

Airtel Africa’s customer base grew by 8.4% to 120.8 million, with increased penetration across mobile data (customer base up 14.8%) and mobile money services (customer base up 24.6%). The slowdown in customer base growth was due to new SIM registration regulations in Nigeria; excluding Nigeria, the customer base grew by 15.9%.

Mobile money revenue grew by 62.4%, largely driven by growth in Tanzania, Zambia, Uganda and Malawi. Revenue growth was driven by both customer base growth of 23.9% and ARPU growth of 34.5%, due largely to expansion of our distribution network.

Mobile money ARPU growth was driven by the 39.3% growth in transaction value per customer (from $131 per customer per month to $176 per customer per month). Mobile money revenue accounted for 23.2% of total revenue in the quarter, up 4.2 percentage points from 19.0% in the prior period.

Operating profit increased by 67.6% to $352m in reported currency, due to a combination of strong revenue growth and improvements in operating efficiency. In constant currency operating profit grew by 73.9%.

Net finance costs were broadly stable in the period. Effective interest rate increased to 5.0% from 4.7% in the prior year largely as a result of a reduction in foreign currency debt and increase in local currency OpCo debt, however interest charges were broadly stable
due to lower market debt and slightly higher interest income.

Total tax charges increased by $62m, to $117m. The $62m increase in tax charges was due to higher operating profit, a one-time tax case settlement charge of $9m in one of our operating markets and a higher withholding tax of $4m on dividends by subsidiaries. The
the prior period also benefited from the recognition of deferred tax credit of $7m in Tanzania.

Basic EPS was 3.3 cents, up from 1.1 cents in the prior period. This increase was mainly due to higher operating profits which more than offset the increased tax charges from higher profits. Net finance cost and minority interest were broadly stable

Raghunath Mandava, chief executive officer, on the trading update:

“Our Q1’22 results have been very strong, with reported growth of 30.7% in revenue and 42.4% in underlying EBITDA, with constant currency growth of 33.1% and 46.2% respectively. Q1 of last year was impacted by the start of Covid, but even after adjusting for these effects, our Q1’22 revenue growth rates for the Group, service segments and reporting regions were all ahead of Q4’21 trends.

We have posted strong double-digit growth across voice (26.0%), data (37.4%) and mobile money (53.7%), and across all our regions.

Sub-Saharan Africa is now experiencing a third wave of the pandemic. Governments are implementing balanced measures of lockdowns and restrictions. But vaccination levels remain very low. In these challenging times, our business model has so far proven resilient, but we continue to monitor the situation closely for the potential impact on local economies and consumers.

Our total customer base has returned to growth with acceleration in our East Africa and Francophone regions and despite continuing negative net additions in Nigeria. With the easing of these restrictions in late April, we have since been able to gradually increase
locations for activations in line with regulatory compliance across Nigeria, and we have begun adding new customers.

Our continued focus on modernisation and rollout of our network, along with simplifying our products and improving our distribution, have all helped us to make handsome gains on our ARPUs across voice, data and mobile money. Our robust operating model and solid execution should enable us to continue our profitable growth.

We continue to see huge potential across voice, data and mobile money due to the low penetration levels in Africa, as we continue to partner the nations in bridging the digital divide and enhancing financial inclusion. We remain committed to continuing to efficiently and effectively deliver services that help to improve the lives, communities and economies we serve.”

IITA And Partners Organize Seed Fair In Kano And Jigawa

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IITA And Partners Organize Seed Fair In Kano And Jigawa

From 10 to 15 June, IITA and partners organized a joint seed fair in the northern Nigerian Kano and Jigawa states.

The seed fair aimed to create awareness among farmers on the availability of seeds of improved crop varieties and help them to access quality seeds for enhanced productivity.

Additional objectives are to provide market opportunities for the seed companies to market their seed and establish partnerships with different stakeholders along the crop value chains.

The IITA-Kano Station exhibition showcased improved crop varieties that the Institute is promoting in the region. Among the most notable were the improved seed varieties of cowpea, soybean, and maize. They also provided information materials on improved crop management and IITA’s work to support farmers with new technologies to help them realize high yields.

The implementing partners of the Accelerated Varietal Improvement and Seed Delivery of Legumes and Cereals in Africa (AVISA) Project organized the fair with the theme “Quality seed: the basis for enhancing product quality and achieving better yields for smallholder farmers”.

IITA And Partners Organize Seed Fair In Kano And Jigawa-Brand Spur Nigeria
IITA And Partners Organize Seed Fair In Kano And Jigawa-Brand Spur Nigeria

The partners in Nigeria are IITA, the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), Syngenta Foundation for Sustainable Agriculture (SFSA), Institute for Agricultural Research (IAR/ABU), University of Agriculture Makurdi (UAM), Center for Dryland Agriculture (CDA-BUK), Kano Agriculture and Rural Development Authority (KNARDA), and Lake Chad Research Institute (LCRI).

The 3-day event attracted over 1200 participants, including researchers, seed companies, input suppliers, farmer-processors, buyers of improved seed, community leaders, and service providers.

The Fair took place in selected farmers’ hubs established by the Syngenta Foundation at Tofa and Bunkure communities in Kano and Birni Kudu in Jigawa. The Fair was officially opened at each Center by the District Head of the Local Government Areas.

In her opening remarks, AVISA National Coordinator, Prof. Mary Yeye, stressed that AVISA aims to make available improved seed varieties to improve the lives of smallholder farmers. She said, “This will be achieved as farmers adhere to good agronomic practices. Achieving this will automatically translate to increased income and improve the standard of living of the farmers.”

IITA-Kano Station Head Alpha Yaya Kamara emphasized the significance of quality seed as a prerequisite for increasing yields on farmers’ fields. “Using high-quality seed is one of the most important elements in increasing agricultural production in any farming system,” he said.

SFSA Country Program Manager Isaiah Gabriel said the foundation’s mission was to facilitate commercialization and increase the adoption of specific varieties of cowpea and sorghum. They also aim to build a sustainable seed and grain production system in Nigeria.

He encouraged the seed companies to capitalize on the one-stop-shop farmers’ hub platform the SFSA established in several LGAs in Kano and Jigawa states for seed sale and grain aggregation.

IITA Seed System Specialist Lucky Omoigui explained that the AVISA project aims to develop a viable seed delivery system in Nigeria that will enhance farmers’ access to quality seed of legumes and cereals. He noted that good seed interacting with a good environment would determine the crop’s health and productivity.

Representatives from ICRISAT—Dr. Ignatius Agaraiwa, Dr. Ajeigbe Hakeem, Dr. Michael Vabi; IAR Zaria—Prof. Daniel Abba; and Bayero University, Kano—Prof. S.G. Mohammed also delivered goodwill messages underscoring the increasing demand for quality seeds of improved crop varieties.

They applauded the opportunities the seed fair created for farmers within and outside the communities to purchase quality seeds of the various improved varieties.

In addition to improved seeds, many farmers purchased other inputs such as insecticides and fertilizers for this year’s cropping season.

Exxon Mobil Corporation Declares Third Quarter Dividend

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Exxon Mobil Corporation Declares Third Quarter Dividend

The Board of Directors of Exxon Mobil Corporation today declared a cash dividend of $0.87 per share on the Common Stock, payable on September 10, 2021, to shareholders of record of Common Stock at the close of business on August 13, 2021.

This third-quarter dividend is at the same level as the dividend paid in the second quarter of 2021.

Through its dividends, the corporation has shared its success with its shareholders for more than 100 years.

Which African Countries Are Investing the Most in Cryptocurrency?

Esan Bolaji
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Which African Countries Are Investing the Most in Cryptocurrency?

The region of Africa is going through an economic revolution that’s unlike anything that has gone before, with this largely being driven through the burgeoning fintech sector.

More specifically, we’re seeing the 2$-trillion cryptocurrency market begin to disrupt the existing financial market, with virtual currency adoption on the rise and various assets now being utilised for investment purposes.

But why is crypto adoption growing at such a rapid rate in Africa, and which countries are investing the most in this? Let’s find out!

Cryptocurrency
Which African Countries Are Investing the Most in Cryptocurrency?

Why is Crypto Adoption on the Rise in Africa? 

There are various reasons behind the rise in crypto adoption in Africa, including the prevalence of unbanked residents in the region.

More specifically, around 57% of Africa’s total population (around 95 million people), currently don’t have a traditional bank account. This has left an entire generation of people who are financially excluded, with cryptocurrency well-equipped to bridge this gap and create a more equal society.

This is thanks to the technology’s innate accessibility and immutability, and its decentralised nature which removes any point of central control or the risk of manipulation.

Similarly, the last 20 years have seen numerous African countries have gone into a sustained period of economic volatility, which is commonly characterised by hyperinflation.

Describing any selection of price increases that exceed 50%, there have been numerous episodes of late, with South Sudan’s rate of inflation peaking at 102% between 2016 and 2017.

In Zimbabwe (which has a troubling history of hyperinflation), the central bank recently released a $50 dollar bill with a value of just $0.60 (at the bank’s current rate of exchange). This means that it’s not enough to afford a single loaf of bread, making it completely unfit for purpose.

Once again, cryptocurrency provides the perfect antidote to this, thanks to its decentralised nature and relative invulnerability to macroeconomic factors such as interest rates and inflation.

Which 3 Countries are Investing in Cryptocurrency the Most?

OK, we hear you ask, but which African nations are investing the most in the cryptocurrency market? This is certainly an interesting question given the prevalence of forex trading platforms that offer accounts with a $30 welcome bonus, so here’s our pick of the most prolific investors.

  • South Africa: SA remains the single biggest crypto investor in the region, while the country is also ranked seventh on a global scale. Amongst its individual weighted metric include 41 on-chain deposits, while the P2P exchange trade volume has a value of 10 (placing it third by this metric behind the US and Ukraine globally.
  • Nigeria: Next up is Nigeria, which has a worldwide rank of eighth and is the second most prolific crypto investor in the region of Africa. Nigeria’s on-chain value received a weighted value of 14, while the number of on-chain deposits here totals 112. The nation’s P2P exchange trade volume is ranked a little lower with a value of three.
  • Kenya: While Kenya has just dropped out of the world’s top 10 crypto adopters, it remains prolific by African standards and shares in the growing trend for P2P exchanges. According to a Citibank report, Kenya holds more than KES 163 billion ($162 billion) worth of Bitcoin (which is approximately 2.3% of the country’s total GDP).

Lafarge Africa Posts Strong Net Income Growth in Q2; Net Sales up 29.4%

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Lafarge Africa Posts Strong Net Income Growth in Q2; Net Sales up 29.4%

Lafarge Africa Plc, Building Materials company in the Industrial Goods sector announced a 25.7% growth in strong net income to N19.18Billion in its Q2 2021 result from 15.26Billion (Q2 2020). Net Sales up 29.4% with recurring EBIT up 11.1%. Lafarge Africa also reported a strengthened balance sheet with net cash position of N 38.1bn.

The cement production manufacturing company performance improved for the period under review achieved significant growth in its topline and bottom-line figures. A turnover of N145.02 billion was reported, up by 20.30% from N120.54 billion reported the previous year.

Profit after tax grew by 21.40% to N28.32 billion from N23.33 billion reported the previous year. Earnings per share increased to N1.76 from the EPS of N1.45 in Q2 2020.

At the share price of N22.90, the P.E ratio of Lafarge Africa stands at 13.02x with an earnings yield of 7.68%

PERFORMANCE OVERVIEW – Group Quarter 2 2021

Lafarge Africa
Source: NGX Limited, Lafarge Africa

Khaled El Dokani, CEO of Lafarge Africa, commented:

“Our performance remained resilient in Q2 2021, with net sales of +29.4%, recurring EBIT of +11.1% and net income of +25.7%, compared to the previous year. We are equally pleased with the progress we are making on sustainability; our use of affordable clean energy and our agroecology footprint is in accordance with the acceleration of our net-zero pledge”.

H2 OUTLOOK 2021

  • Good demand momentum is expected in H2 2021.
  • We will continue to maximize volume opportunities across our markets and actively manage our costs.
  • We will consolidate our efforts in Sustainability.

Mondelēz posts 12.4% sales growth, boosted by key business acquisitions

Esan Bolaji
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Mondelēz posts 12.4% sales growth, boosted by key business acquisitions

Mondelēz International has posted a net revenues increase of 12.4% driven by Organic net revenue growth of 6.2 percent, favourable currency, and incremental sales from the company’s acquisitions of Hu, Grenade and Gourmet Food in its second-quarter 2021 results. Volume and pricing drove Organic Net Revenue growth, partially offset by an unfavourable mix.

Mondelēz gross profit increased $300 million, while gross profit margin increased 20 basis points to 39.6 percent primarily driven by the increase in Adjusted Gross Profit margin.

Adjusted Gross Profit increased $168 million at constant currency, while Adjusted Gross Profit margin increased 20 basis points to 39.9 percent due to pricing and manufacturing productivity, partially offset by higher raw material costs and unfavorable product mix.

Commenting on the result Dirk Van de Put, Chairman and Chief Executive Officer said,

“We delivered another strong quarter of performance across all key metrics, including top-line, profitability and cash generation. We continue to see strength across the vast majority of our geographies, categories and brands as we remain intensely focused on consistent execution and reinvestment to further strengthen our position.

Mondelēz

We are confident that our strategy, long runway of clear growth drivers and advantaged enablers will continue to drive consistent and attractive growth and value generation over the long term.”

Other key financial highlights

  • Operating income increased $159 million and operating income margin was 13.1 percent, up 100 basis points primarily due to lower intangible asset impairment charges, lapping prior-year costs associated with the JDE Peet’s transaction and higher Adjusted Operating Income margin, partially offset by higher restructuring costs and the impact of pension participation changes. Adjusted Operating Income increased $68 million at constant currency, and Adjusted Operating Income margin increased 30 basis points to 16.2 percent primarily driven by lower manufacturing costs, pricing and overhead leverage, partially offset by higher raw material costs, unfavourable product mix and higher advertising and consumer promotion spend.
  • Diluted EPS was $0.76, up 100.0 percent, primarily due to lapping prior-year costs associated with the JDE Peet’s transaction, a higher gain this quarter on equity method investment transactions, an increase in Adjusted EPS, lower intangible asset impairment charges and favourable year-over-year mark-to-market impacts from currency and commodity derivatives. These factors were partially offset by the unfavourable impact from enacted tax law changes, higher restructuring costs and the negative impact from pension participation changes.
  • Adjusted EPS was $0.66, up 1.6 percent on a constant-currency basis driven by operating gains and fewer shares outstanding, partially offset by higher taxes primarily due to a lower net benefit from non-recurring discrete tax items.
  • Capital Return: The company returned approximately $900 million to shareholders in cash dividends and share repurchases in the quarter. Today, the company’s Board of Directors declared a quarterly cash dividend of $0.35 per share of Class A common stock, an increase of 11 percent. This dividend is payable on October 14, 2021, to shareholders recorded as of September 30, 2021.

2021 Outlook

Mondelēz International provides its outlook on a non-GAAP basis, as the company cannot predict some elements that are included in reported GAAP results, including the impact of foreign exchange. Refer to the Outlook section in the discussion of non-GAAP financial measures below for more details.

With 2020 net revenues of approximately $27 billion, MDLZ is leading the future of snacking with iconic global and local brands such as Oreo, belVita and LU biscuits; Cadbury Dairy Milk, Milka and Toblerone chocolate; Sour Patch Kids candy and Trident gum.

UAC Reports Profit of ₦765M for H1, up 258% on Revenue of ₦46.5B

Esan Bolaji
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UAC Reports Profit of ₦765M for H1, up 258% on Revenue of ₦46.5B

UAC of Nigeria PLC (UAC) announced its unaudited results for the half-year ended 30 June 2021. UAC’s revenue in H1 2021 increased 26.9% YoY to ₦46.5 billion supported by sales growth across all operating segments. The company’s profit after tax from continuing operations was ₦765 million, up 258% from ₦214 million in H1 2020.

Commenting on the results, Group Managing Director, Fola Aiyesimoju, stated:

“We are gaining traction in our focus on growth. Higher sales across all our operating platforms translated to 27% revenue growth year on year. Price increases and operational efficiency offset input cost escalation resulting in a 105% increase in operating profit.

Profit before tax is 25% higher year on year. Net income was negatively impacted by losses from UPDC PLC and MDS Logistics Limited and we are working with our partners to restore these companies to profitability.”

Segment Revenue

  • Animal Feeds and Other Edibles segment (+13.4% YoY) driven by price increases to offset rising raw material costs.
  • Paints segment (+59.4% YoY) on account of higher volumes compared to H1 2020 which was impacted by limited sales due to the restrictions in the movement of people and goods in Q2 2020.
  • Packaged Food and Beverages segment (+45.5% YoY) driven by volume growth in the snacks, water and dairy categories and price increases in the snacks and water categories.
  • Quick Service Restaurant segment (+62.0% YoY) driven by additions to company-owned restaurants (corporate stores) and improved volumes and performance of existing stores.

UAC of Nigeria: Topline growth and improved margins drive underlying earnings growth in Q3

Key Highlights Review: H1 2021

  • Profit before tax was ₦1.3 billion, an increase of 25.3% YoY against ₦1.0 billion in H1 2020. Profit after Tax from continuing operations was ₦765 million, an increase of 258% YoY against ₦214 million in H1 2020.
  • Total profit for the period was ₦763 million in H1 2021, a 34% decline from the ₦1.2 billion reported in H1 2020. UAC recorded ₦944 million profit from discontinued operations in H1 2020 which impacts year on year comparison.
  • Operating Profit was ₦1.7 billion in H1 2021, 105.4% higher than the ₦828 million recorded in H1 2020. Revenue growth and higher other income (+75.8% YoY), partly attributable to profit on the sale of land by CAP PLC, offset higher operating expenses (+ 9.5% YoY). Operating expenses as a percentage of sales improved by 238 basis points to 15.0%.
  • Earnings per share from continuing operations for H1 2021 was 5 kobo, an improvement from the loss per share from continuing operations of 7 kobo in H1 2020.
  • Free Cash Flow for the period was negative ₦15.1 billion in H1 2021, compared with positive ₦239 million in H1 2020. Free cash flow was impacted by a deliberate strategy to increase inventory levels in the Animal Feeds and Other Edibles segment and the Paints segments, as well as the shareholder loan disbursed to UPDC PLC to refinance its corporate bond.
  • Annualised Return on Equity (ROE) from continuing operations in H1 2021 was 0.6%, 305 basis points lower than H1 2020 (3.7%). Annualised Return on Invested Capital (ROIC) was 299 basis points higher at 5.2% (H1 2020: 2.2%).

Seplat Energy Grew Revenue By 32% to $308.8M in H1 2021

Esan Bolaji
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Seplat Energy Grew Revenue By 32% to $308.8M in H1 2021

29 July 2021: Seplat Energy Plc (Seplat Energy), a leading Nigerian independent energy company listed on both the Nigerian Exchange and the London Stock Exchange, announces its unaudited results for the six months ended 30 June 2021. Seplat Energy’s total revenue for the period was $308.8 million, up 32.2% from the $233.5 million achieved in 2020.

Crude oil revenue was $244.8 million (H1 2020: $180.1 million) a 35.9% increase compared to 2020, reflecting higher realised oil prices of $64.69/bbl for the period (H1 2020: $35.94/bbl). A $59.9 million oil underlift was recorded under other income in the period, compared to $49.4 million in H1 2020 reflecting oil produced but not lifted in the period.

Based on the document made available to Brand Spur, Seplat Energy’s gross profit increased by 135.8% to $88.9 million (H1 2020: $37.7 million) because of higher revenues. The cost of sales in the period was $219.9 million (H1 2020: $195.9 million).

Production evacuation from the Gbetiokun fields resulted in barging costs of $4.7 million; the higher operational and maintenance costs of $54.1 million includes a combination of costs to support extensive asset integrity works carried out in the period and other production costs which were correctly classified in Q3 2020.

The profit before tax was $62.1 million (H1 2020: $145.3 million loss). The net finance charge was $47.5 million, and higher than planned due to costs associated with the debt restructuring in the period compared to $34.8 million in 2020.

The net profit for H1 2021 was $36.2 million (H1 2020: $110.2 million net loss). The resultant basic EPS was $0.10 in H1 2021, compared to $0.14 basic loss per share in H1 2020.

Financial Highlights

  • EBITDA of $178.9 million
  • Cash generated from operations $125.8 million
  • Cash at bank $298.8 million, net debt of $456.4 million
  • Successful issue of $650 million 7.75% senior notes to redeem existing $350 million 9.25% senior notes and repay $250 million drawn on $350 million RCF
  • Refinanced $100 million Westport RBL facility; raised a $50 million offtake linked to the RBL in July
  • Total capital expenditure of $57.5 million

Seplat energy Revenue declined by 10.7% to N136bn in Q3 2020 Results Brandspurng

Operational

  • Working-interest oil and gas production within guidance at 50,786 boepd
  • Liquids production of 30,028 bopd in H1 2021
  • Gas production up 21% to 120 MMscfd
  • Oben-50 and 51 gas wells completed in the period and producing
  • Safety record extended to more than 20.5 million man-hours without LTI on Seplat-operated western assets
  • First liftings from Amukpe-Escravos Pipeline expected Q4 2021

Q2 2021 interim dividend

Following a review of Seplat’s dividend policy, the Board has approved a Q2 2021 interim dividend of US2.5 cents per share (subject to appropriate WHT) to be paid to shareholders whose names appear in the Register of Members as at the close of business on 12th August 2021.

Roger Brown, Chief Executive Officer, said:

“Seplat continues to deliver a robust performance despite the ongoing pandemic. Our second-quarter volumes were significantly higher than the first three months and we remain confident of a good outcome to the year as we drive improvements across our operations.

The strength of our balance sheet was demonstrated in March when we were able to refinance at a considerably lower cost through the issue of $650 million senior notes. We have since committed to quarterly dividend payments providing more frequent returns to shareholders. For the second quarter, we have declared a dividend of US2.5 cents per share.

In May we announced a change of name to Seplat Energy, reflecting our belief that we must diversify our business so we can offer the optimal mix of energy for Nigeria’s future needs. Having established ourselves as one of Nigeria’s most successful indigenous independent oil and gas companies, we will now build on that strong base and accelerate our domestic gas business, expanding along the gas value chain into LPG and CNG.

As part of Nigeria’s energy transition, we will selectively target opportunities in gas to power and solar energy, critical to providing an alternative to expensive diesel-generated electricity”.

Outlook for 2021

For 2021 we expect to produce an average of 48,000 – 55,000 boepd, taking into account the impact of OPEC+ quotas. We continue to hedge against oil price volatility and expect a higher proportion of revenues to come from long-term gas contracts at stable prices.

We have significant cash resources and will continue to manage our finances prudently in 2021, expecting to invest more than $180 million of capital expenditure across the full year, with $57 million already invested.

We remain confident that our ongoing cost-cutting initiatives and prudent management of cash will enable further reductions in debt, whilst supporting dividend payments and investment for growth.

Following its successful funding, the completion of the ANOH project remains a major priority and we expect this to be achieved in H1 2022, at a lower cost than originally estimated at FID.

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