Custodian Investment Plc released its audited full-financial year 2020 for the year ended December 31, 2020. There was an uptick in the top and bottom line of the company.
It also recommended the declaration of dividends subject to the approval of Shareholders at the Company’s Annual General Meeting to be held in due course.
Key highlights
Gross earnings rose by 22.2% from N61.4 billion in 2019 to N75 billion in 2020.
Profit before tax rose jumped 69% from N8 billion in 2019 to N13.6 billion in 2020.
Profit after tax rose by 111% from N6 billion in 2019 to N12.6 billion in 2020.
Custodian Investment Plc. is an investment company with a significant holding in companies and brands including Custodian and Allied Insurance Limited, Custodian Life Assurance Limited, Custodian Trustees, Crusader Sterling Pensions Limited and UACN Property Development Company Plc. all rendering best in class services in their respective spheres.
The Company is managed by a Board comprising thoroughbred professionals with proven track records in their various fields of endeavour, who brings broad and deep insights derived from several years of fruitful and eventful years of experience to bear on the direction of the Company.
Currently, with group-wide assets under management (AUM) in excess of NGN 300 billion (approx. $1b), the Company ranks high among eminent players in Nigeria’s Other Financial Services Sector of the economy.
Working-interest production within guidance at 51,183 boepd, despite demand fall and OPEC+ quotas
Liquids production of 33,714 bopd, gas production of 101 MMscfd
Eland OML40/Ubima assets produced 8,855 bopd, 26.3% of Group liquid volumes
Low unit cost of production at $8.90/boe, with cost-cutting initiatives ongoing, particularly at OML40/Ubima
Drilled/completed nine wells and brought eight onstream in 2020
ANOH project now budgeted under original $700 million FID estimate, but COVID-19 related delays to H1 2022
Financial highlights
Final dividend of $0.05 per share recommended ($0.10/share for full year)
EBITDA of $266 million, operating profit of $121 million (before non-cash impairments and unrealised fair value losses)
Strong cash position of $259 million after $100 million RCF repayment, $58 million dividends paid in the year, and $150 million capex; net debt at $440 million with most maturities after 2021
IAS 36 COVID-19 impact assessment and IFRS 9 non-cash impairment provision of $144.3 million, majority booked in Q2 2020
Corporate updates
Creation of New Energy unit to manage gas processing and future low carbon to zero carbon initiatives
AGPC financing signed in February 2021, $260 million raised, with commitments for $450 million
Advanced stage to extend maturities for existing Eland RBL, raise additional funding via offtaker financing for Elcrest capex
$5.0 million funding of share purchase programme, by Trustee, for Seplat LTIP, starting immediately
Board directive to eliminate Related-Party Transactions by end of 2021
Summary of performance
*Includes impairments of $114.4 million on revaluation of assets and $29.9 million on financial assets **Adjusted for non-cash items including impairments, fair value adjustments, abandonment, and exchange loss | www.wordpress-1516176-5827464.cloudwaysapps.com
Roger Brown, Chief Executive Officer,said:
“2020 was a challenging year for the Company but Seplat has once again shown its resilience and ability to overcomechallenges and deliver production in line with guidance, operating with minimal incidences of COVID-19cases.
From the $330 million of cash generated from operations, we have increased our capital investment, invested in ANOHand voluntarily paid down $100 million of debt, further deleveraging the balance sheet. Despite seeing the lowest oilpricesinour10-yearhistory,wehavecontinuedtohonourourcommitmenttoshareholdersofaregularincomestreamon their investment, by maintaining a total dividend of $0.10 per share for theyear.”
“Gasisthelower-carbonfeedstockforaffordableelectricityforNigeria’syoungandrapidly-growingpopulation.Seplatis leading Nigeria’s transition away from spending scarce foreign currency on imported, expensive, high-emissiondiesel-generated electricity and we believe this will provide the necessary baseload for a functioning electricity gridthatwillallowrenewableenergytotakeitsplace,asweseeinthedevelopedworld,whichinlargepartsisstillfuelledby coal. The energy transition in Nigeria must balance both the environmental and the socialagenda.”
“Our flagship ANOH project, with the Nigerian Gas Company, is now fully funded and we have made excellent progressin difficult times, with major gas processing units expected to arrive in Nigeria in Q3 2021, installation to commencebeforetheendoftheyear,mechanicalcompletionandpre-commissioninginQ12022andfirstgasflowingtocustomersbefore the end of H1 2022, at a lower expected cost of up to $650million.”
“We remain committed to providing shared value for all of our stakeholders. During the year, with our Governmentpartners, we provided medical beds and other palliatives to our communities and have started construction on a200-bed infectious diseases hospital. Seplat continues to focus on employment opportunities for communities,education, healthcare and knowledge transfer and local capacitydevelopment.”
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 $150 million of capital expenditure across the full year. 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. Although we expect some COVID-19 related delays to push completion into early 2022, following a cost optimisation programme we now expect the project to cost no more than $650 million, substantially below the $700 million budget previously stated at Final Investment Decision (FID).
Want to start trading Forex? It is better to begin with basic strategies. They will allow you to learn the process better & understand how the market works.
5 Basic Forex Strategies
The ability to correctly analyse the price chart of a currency pair is one of the key skills for a trader. However, its presence does not automatically make a trader successful.
Of course, the trading results are highly dependent on the skills of technical analysis, however, the very skill of analysing charts excludes the participation of any money and emotions of the trader.
It is problematic to exclude money and emotions from the process of real trading in the foreign exchange market. That is why two traders with the same knowledge and skills will show completely different results.
Every day, there are published many trading tips and forecasts for trading in the foreign exchange market on trading sites. However, none of the most accurate predictions will bring profit to a trader if they do not know how to enter the market on time.
There are many methods for choosing the right time to open a deal, but the most universal and, at the same time, effective are five approaches:
Forex strategy based on RSI indicator.
EMA Breakout Indicator.
Entering the market when the price breaks out a certain technical level.
Entering the market at the end of the correction in the direction of the trend.
Opening a trade in a narrow price range precedes a strong price movement.
Let’s see them in more detail.
1. Breakdown of the level
The technical level breakout trading strategy is very simple and is used by many traders. Its essence is as follows: the trader determines static or dynamic levels of support and resistance on the chart and enters the market after the price breaks the levels up (buy) or down (sell).
2. Corrective pullback entry
Trading with the trend is the easiest and most profitable way to trade in the foreign exchange market. Its principle implies that after a strong price movement, the price corrects to the technical trend line (support line for an uptrend and a resistance line for a downtrend), after which it forms the next impulse in the direction of the trend.
This strategy involves opening a position at the end of a corrective pullback. The method is very effective since the money of those traders who did not have time to enter on the previous trend impulses are used as a price engine. Having opened a deal at the right time, all that remains is to allow the price to reach the set goal, bringing the trader a profit.
3. Entry in a narrow price range
Opening a trade when the price is in a narrow price range alarms many traders, although this principle is not fundamentally difficult. From the point of view of logic, it is precisely the location of the price in a narrow price range that is the most optimal time to open a deal.
Volatility is low, allowing you to select suitable levels for positions, and a period of consolidation is usually followed by a sharp downward or upward price leap. This is a useful strategy to learn to trade Forex, especially in South Africa. You can learn more about it in the Forextime blog that will tell you a lot about various Forex trading strategies and news.
4. Forex strategy based on RSI indicator
No trading system can solely rely on the RSI indicator but when used in conjunction with other tools and with proper technical analysis, it can open up new opportunities for Forex trading. Now we are going to set up a strategy based on the RSI indicator.
Entry rule: Buy when RSI crossed below 30, formed a bottom, and then crossed back over 30. Sell when RSI crossed above 70, formed a peak, and then again stepped back over 70. Exit rule: Not formed.
Benefits: The RSI indicator is very good for indicating confirmation on any entry in any simple or complex trading system. Disadvantages: Monitoring is required, there are false signals. The strategy on the RSI indicator is supposed to be used in combination with others.
5. EMA Breakout Indicator
There always comes a time when traders start experimenting with different EMA indicator settings. In doing so, one may often obtain good combinations. Currency pairs: Any. Timeframe: 90 minutes or 3-hour chart, 4-hour chart. Indicator: 50 EMA.
Correct entry: Watch the candlestick to pass the 50 EMA and close above (for a short entry) or below (for a long entry). Enter the second candle after it makes 5 pips more than the previous one. Exit rule: Not formed. Stop-loss order: 15 pips below the 50 EMA.
There is an increasing demand for mobile healthcare services in Kenya according to a report recently launched by Ajua, Africa’s first Integrated Customer Experience Company and Carepay, the company behind M-TIBA, the preferred health financing technology platform for the government, retail and private health sectors.
At the moment over 37% of Kenyans currently use mobile platforms to access healthcare. However, over 90% of Kenyan consumers would like to receive more healthcare services through their phones.
The report which covered Mobile Health Transformation in Kenya revealed that while Kenyans placed a larger emphasis on healthcare due to the pandemic, however, providers were still not seeing this impact in their revenues.
The pandemic also caused a strain on consumers and prioritized essentials. In order to get around this, many healthcare providers are accelerating their digital business models to improve their customer experience by easing access to healthcare services for their customers.
The main healthcare services Kenyans access via mobile are health insurance and payments with the most popular apps being NHIF, M-PESA and M-TIBA. Most important to note, To add to this, up to 93% of those surveyed reported that over the past few months they have had a better customer experience on mobile healthcare platforms.
As healthcare providers prepare to meet the demand for telemedicine services, it is crucial for them to have a comprehensive customer experience strategy around the same.
Speaking on factors that make patients choose a healthcare provider, Kamande Wambui, Head of Data Science Ajua shared,
“After proximity to their workplace or home, the most important consideration when making a choice on what health facility to visit is the level of efficiency. Customer experience, thus, needs to be a major focus in healthcare.”
In addition, Dr. Torooti Mwirigi, Commercial Director, CarePay Kenya addressed the use of customer data and argues that in addition to keeping this data safe, providers need to rethink how they implement it to improve their customer experience before launching any telemedicine services.
Dr. Mwirigi recommends using existing customer health information in a way that is useful to customers,
“As it stands, most of the available data is not packaged into useful use. Patients have to share their medical histories over and over again every time they visit a clinician. There’s an opportunity for healthcare providers to improve information systems that will build trust in the system.”
To conclude, customer expectations are changing and they want to feel that they are in control. Customers need to be offered convenience. Mobile advancements in other industries such as Banking, e-commerce and mobile money providers have already implemented efficient mobile services such as mobile wallets.
This has caused customers, particularly youth, to have higher expectations of mobile service delivery from other service providers.
Women Empowered Global (WEG), a global forum for female entrepreneurs and leaders, together with the Gerety Awards, have organized a Global summit with a free-access pass with prior registration at www.womenempoweredglobal.com/iwd
WEG is “A global society of award-winning influencers empowering women through career, leadership, and entrepreneurial programs”. Together with international experts, they design-focused programs to enrich, develop and stimulate the female workforce.
To date, the company works with over 37 award-winning partners from around the world and has a presence in over 23 countries across 6 continents.
Gerety Awards which has been redefining advertising and communications by setting a new benchmark in creative awards with its all-female power jury offers a fresh, diverse way of celebrating outstanding work in communications and marketing.
In announcing the IWD event Co-Founder Lucia Ongay says:
“The summit will feature internationally acclaimed leaders and present meaningful and thought-provoking perspectives in addressing gender norms, cultural stigma; offering best practices and insights this international women’s day”.
With the Gerety Awards entry deadline now firmly set for April 2, agencies, production companies and brands worldwide have an opportunity to impress upon the Gerety Awards jury. Agencies based in Nigeria are also entitled to enter the Nigerian Agency of the year category through the Portfolio Cut.
A reel that includes 3 different types of work has to be submitted into this category to win the prestigious title of Nigerian agency of the year. The global shortlist and agency of the year by country titles will be announced the second week of June followed by live jury panel discussions that will once again give unique insight from advertising industry leaders as well as being a predictor for awards taking place later this year.
Named for Frances Gerety, the copywriter who in 1948 coined the slogan “A diamond is forever, The Gerety Awards marks the first time that a jury has been brought together to select the best in advertising — all advertising, not just advertising made for women — through the female lens, creating a benchmark that is relevant to the market reality, all while redefining the standard to which advertising has traditionally been held.
Open for entries until April 2, enter your most creative work at geretyawards.com
GERETY TALKS: Just like the award show, the Gerety Talks series puts some of the marketing and creative industry’s true changemakers in the spotlight – and at the centre of the conversation – with the aim to drive progress within the industry on a global scale.
The series will bring together agency and brand leaders from around the globe for a refreshing take on what leadership looks like. Gerety Talks premieres on Facebook, IGTV and YouTube every Tuesday at 17:15 / 11:15 EST.
It predicts that insurers in the motor, life, home and health industries risk becoming less attractive to potential customers if they fail to capitalise on the benefits that AI underwriting systems bring.
The report identified that weakened customer loyalty and the driving down of premiums by increased competition and the shift to digital will cause a seismic change in insurance over the next five years.
It recommends that large insurers focus on using insurtech solutions to improve customer interactions by creating data-driven models or lose market share to newer, digitally-native vendors.
These vendors have developed strategies for leveraging insurtech for their business models and to digitally transform; providing examples of how traditional insurers should capitalise on insurtech. Ping An is set to invest $1 billion per year in insurtech, demonstrating a commitment to the approach.
Health Insurance Premiums Underwritten by Insurtech to Accelerate
The research found that insurtech will affect health insurance strongly, with the value of premiums underwritten by insurtech growing by over 1,000% between 2020 and 2025; exceeding $95 billion globally in 2025.
The research identified the ability to collect and use customer data through wearables, API calls to electronic health records and digital therapeutics as critical to driving digital transformation. The research recommends that health insurers redesign their user experience to be digital-first, to increase user engagement and loyalty.
Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.
The world’s suicide rates keep increasing at such an alarming rate with this cause of death competing with malaria, war and homicide.
The world Health organization report titled “Suicide in the world: Global Health Estimates” shows that Suicide is among the top twenty leading causes of death. It also shows that Nigeria tops African countries having the highest suicide rates.
For Nigeria, WHO said 17,710 cases of suicide were recorded in 2016 at all ages.
Photo by Melanie Wasser
Of these number of cases, 8,410 were females while 9,300 were males. The percentage ratio of men to women was 53:47.
The figure puts Nigeria as the leading country in the African region. It was followed by Ethiopia and South Africa with 7,323 and 6,476 cases respectively.
In the world, the top five countries were being led by India with more 2,15 000 cases in 2016, followed by China that had a total of 136,267 cases.
The other three countries in the top five are America, the Russian Federation and Japan. Nigeria is the sixth-highest globally.
Japan of these countries faced by this spike in suicide rates has made an attempt to curb this problem by appointing a minister for loneliness. What is the relationship between loneliness and suicide? Being lonely can lead to thoughts that creates the condition for depression and in worse cases, suicide itself.
The role of this Japanese Minister for loneliness is to reduce loneliness and social isolation that serves as the backbone for suicidal thoughts and attempts.
While many seem ridiculous to many in Nigeria, the rate of suicide is alarming. Maybe we don’t need a ministerial post for this but we need a proper institutional structure to tackle loneliness and depression the two root causes of suicide.
Initiatives should be created to encourage speaking up whenever someone feels depressed or in any form loneliness and socially isolated from others. Programmes with proper counselling units and groups were people who fought depression and loneliness or who are still fighting can come together and talk about it and how they are fighting it.
The government should also collaborate with the non-government organization that offer mental health services in order to curb this form of illness. Forms of support like government policies and funding such as grants can go a long way in helping these non-governmental organisation fight off this blood-sucking monster called Suicide.
Suicide rates can be reduced if the government takes the routes and find other possible routes like Communication to accompany this and fight off the root causes causing the spike in suicide rates.
Nestle Nigeria is set to deliver on this in fufillment of the company’s global commitment to having 100% of Nestle products packaging recyclable and re-usable by 2025 to protect the environment.
This move-in line with becoming a force of good in the society by talking society Problems that can actually damage the reputation of the business and slow the growth of the company in the nearest future if no action is taken to address it. While this move is an applaudable one globally, the local adaption is bound to face its own share of obstacles.
The move from plastic straw to paper straw might be one with good intentions but intentions are not enough to encourage usage or drive sales. The perception of this new concept is what holds the key to its success or the barrier to the death of this move.
The first question that Nestle the producers of Milo should be asking is if this concept has the tendency or potential to be generally accepted locally. They should be testing whether this concept would be welcomed with open hands or would be dead on arrival.
One of the issues raised about this new concept is the ability of paper to get soggy. What this concern means is that would the paper get soft and wet.
Another concern is whether it would affect the taste of the drink. Addressing these concerns and obstacles are necessary if this concept is expected to survive.
Another concern on a global level is the research that showed that paper straw produces more carbon emission than a plastic straw.
This concerns should be addressed and can be addressed through the improvement in the concept of paper straw production and the use of Communication to address the concerns or obstacles that is out to kill the concept of a paper straw.
The communications task should be focused on driving acceptance through obstacle Identification and proper creative solutions to address the obstacles.
Companies should always thrive for product and market fit and not just production of products and concepts that does not satisfy the need of the market as that can be seen as just forcing product innovation and concepts down the throat of the consumers.
Mobile money is a policy supported by the government and private companies dealing in finances. It is an attempt to make financial transactions and services easier and accessible to people.
This mobile money agent business is one that penetrates even places where banks and related financial ventures involved in services related to mobile money operations can’t seem to reach.
Here are the five steps to take in becoming a successful mobile money agent:
1. Identify a Mobile Money Operator:
This first step is very essential in building your services. What mobile money operator would you like to work with? What are their criteria and are you comfortable with it? These are questions you would need to answer before progressing.
If answered it would allow you to make a choice on what operator you are going to work with. Mobile money operators include Banks, Fintechs and even telecommunications providers. This brand provides solutions that are needed for mobile money to be successful.
2. Capital
Is there any business without capital? Starting a mobile money business does not require much capital except you want to start on a very large scale. You would need money to sort things out and get the business started.
3. Strategic Location:
Many make wrong choices when picking a location. A good location can be picked on the need for mobile money operation around the area or it’s accessibility to a large amount of people. How visible is your location to people? Strategic places can include Markets, parks and where there is little or no financial institutions or banks’ presence.
4. What services would you offer:
There are various mobile money services or solutions to pick from. Choose the ones that is needed by people in that certain area. Common mobile money services include Bill payments and Money transfer. Others include opening bank accounts and airtime recharge top-up.
5. Business Equipments
Obtaining the needed equipment such as a POS machine, good internet connection and a stable power source is essential for your business running smoothly. Also, don’t forget to put out your publicity materials that announced your service and location around places close to where you operate.
These five steps are necessary to fulfil in order to become a successful mobile money agent.
Zenith Bank Plc released its FY-2020 results earlier, reporting a 5.2%y/y growth in Gross Earnings (GE) to N696.5bn. Also, PBT and PAT rose 5.2% and 10.4% to N255.9bn and N230.6bn while Loans and deposits expanded by 19.1% and 25.3% to N3.6trn and N5.3trn respectively. We update our estimates and we review our expectations below.
90bps reduction in CoF bolsters net interest income:
Zenith Bank reported a resilient GE considering the overall pressure on the economy in 2020. The Covid-19 induced macro pressure was reflected in the modest Interest income and non-interest growth numbers which came in at 1.3%y/ y and 8.5%y/y to N420.8bn and N251.7bn, respectively.
Interest income was supported by advances to customers relative to a decline in income from investment assets amid a 19.1% expansion in gross loans and advances.
Nonetheless, ZENITH BANK’s stellar performance is traceable to a significant reduction in interest expense in view of the low-interest-rate environment, resulting in a 90bps decline in cost of funds (CoF) to 2.1% from 3.0%. Thus, net interest income expanded 12.2% to N299.7bn while the Net Interest Margin (NIM) settled at 7.9% (vs. 8.2% in 2019).
Also, while fees & commission income tumbled to N79.3bn (from N100.1bn) in 2020, non-interest income growth was supported by a surge in trading income (mainly on T-bills) to N121.8bn (from N117.8bn). Notably, electronic banking fees tumbled from N42.5bn to N27.1bn amid regulatory changes and a reduction in transaction volumes due to the lockdown.
However, this was offset by a surge in foreign currency gains and trading income, which surged to N50.7bn from N14.2bn in 2019.
Expectedly, impairment charges printed a 64.5% increase to N39.5bn, driving Cost of Risk (COR) from 1.1% in 2019 to 1.5%. OPEX came in 10.4% higher at N256.0bn, driven mainly by ICT charges (N20.4bn vs N9.8bn), AMCON, NDIC (due to deposit expansion), fuel & maintenance, license, registration and subscription-related expenses.
Group Managing Director/Chief Executive, Zenith Bank, Mr. Ebenezer Onyeagwu | www.wordpress-1516176-5827464.cloudwaysapps.com
Thus, the Cost to Income ratio (CIR) increased slightly to 50.0% (vs. 48.8% in the prior period). Accordingly, the profit ratios remained broadly stable as PBT came in at N255.9bn. Thanks to a reduction in the effective tax rate from 14.2% in 2019 to 9.9% in 2020, PAT jumped 10.4% to N230.6bn. Thus, the net margin settled at 33.1% while ROE and ROA settled at 22.4% and 23.8%.
Sterilized cash accounts for 18.8% of total assets:
Zenith Bank’s cash and balances with the CBN jumped 70.0% to N1.6trn, of which over N1.3trn or 83.6% represents mandatory and special reserve deposits with the CBN.
This is unsurprising considering a move by the CBN to begin to issue special bills to banks in Q4-2020 as a strategy to manage liquidity as well the apex banks liabilities to deposit money banks going forward. Meanwhile, gross loans and deposits surged 19.2% and 25.3% to N2.9trn and N5.3trn respectively.
However, LDR and liquidity ratio of 54.7% and 66.2% reflects a cautious approach to risk-asset creation in view of the fragility of the macroeconomic environment. Again, asset quality concerns appear to be well under control as NPL settled at 4.3% (vs. 5% guideline) with a coverage ratio of 112.1% even as capital adequacy ratio (CAR) improved to 23.0% from 22.0%, compared to the regulatory threshold of 15%/16%.
Robust balance sheet and operating efficiency support a BUY rating:
We retain a BUY rating on Zenith Bank at the current price of N26.3/share, buoyed by operational efficiency which was reflected in the reduction in the cost of funds, massive cheap deposits and resilient interest income numbers.
In 2021, interest income from the huge deposits with the CBN should support earnings considering the special bills offering from the CBN which was executed at 0.5%. For context, we expect PAT to remain stable and well above N200bn in 2021, consolidating its industry position as the most profitable bank.
Again, Zenith Bank’s earnings stability continued to more than offset pressure on CAR, as observed in the 2020 numbers. Accordingly, our valuation assumptions feed on the lender’s robust balance sheet position, earnings stability, resilient margins and dividend consistency.
Adjusting our valuation assumption for higher country risk premium as well as the risk-free rate, we revised our TP to N30.4/share with a 15.0% upside potential compared to the current price. The bank trades at a P/B ratio of 0.7x, less than 1.2x for GUARANTY.
Accordingly, we maintain a BUY rating on the ticker.
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