FG grants Ondo, Ekiti permission to reconstruct & toll Akure-Ikere road

Brand Spur
-
0
FG grants Ondo, Ekiti permission to reconstruct & toll Akure-Ikere road

The Government of Ekiti and Ondo States have secured Federal Government’s approval to reconstruct and toll Akure-Ikere road.

This was disclosed via the Twitter account of the Ekiti state government on Friday.

The approval was secured by the governments of Ekiti and Ondo states, led by Kayode Fayemi and Rotimi Akeredolu respectively.

The Federal Government had earlier hinted on its plan to reintroduce toll gates, fifteen years after the administration of ex-President Olusegun Obasanjo scrapped them.

MTN Nigeria Calls for Entries in Academic Research Development & Innovation Challenge (ARDIC)

Brand Spur
-
0
MTN Nigeria Calls for Entries in Academic Research Development & Innovation Challenge (ARDIC)

In furtherance of its commitment to lead the delivery of a bold new digital world by promoting science and technology in Nigeria, MTN has announced call for entries for the Academic Research Development & Innovation Challenge (ARDIC). ARDIC is MTN Nigeria’s latest contribution to the enhancement of academic research in Nigeria. With ARDIC, MTN Nigeria seeks to leverage its existing assets to enable local innovation/research.

ARDIC is a platform to assist young motivated postgraduate researchers in Nigerian universities to build and develop their research ideas into sustainable products and initiatives within six (6) months. In addition to a cash prize of One Million Naira for the winning research idea, ARDIC seeks to introduce an engagement system that provides activation platforms, data, mentorship, experimental sandbox and other benefits to well-motivated Masters/PhD researchers.

Speaking on the new initiative, Chief Transformation Officer, MTN Nigeria, Bayo Adekanmbi said, “As a future-driven organisation, MTN believes that many of the solutions to the bottlenecks that currently exist on the continent, especially in Nigeria, can be solved through research and innovation. However, the academic community often hit a brick wall in translating their game-changing ideas to workable solutions.”

“We have created ARDIC to bridge this gap and enable researchers develop solutions that address some of our most pressing social problems. As a company, we are excited about the possibilities that this call to Nigerian researchers portend.”

Following a rigorous and competitive application process, an independent body of judges that comprises some of the country’s most accomplished academic experts and innovators will select the finalists. The selected researchers will make their final pitch to the panel in Abuja where the inaugural winner of the challenge will emerge.

Five Simple Steps To Protect Against Flu

Brand Spur
-
0
Five Simple Steps To Protect Against Flu

The most common symptoms of influenza (flu) include fever, a dry cough, headache, muscle and joint pain, a sore throat and a runny nose.

Each year, millions of people come down with the flu. Most recover within a week, but for an unlucky few, flu can be deadly.

Seasonal flu epidemics typically occur in late autumn and winter, so we can anticipate them, and prepare accordingly.

In tropical regions, influenza can occur throughout the year, causing outbreaks more irregularly, but prevention is still important.

Here’s how you can protect yourself, and those around you.

Get vaccinated

Annual vaccination is the most effective way to protect yourself against flu, and serious complications.

Vaccination is especially important for pregnant women, at any stage of pregnancy.

It’s also crucial for children aged 6 months to 5 years, elderly people, those suffering from chronic medical conditions, and for health care workers.

Remember: a flu vaccine cannot give you flu. To feel achy or feverish after vaccination is a completely normal and natural reaction, and generally lasts only a day or two.

Wash your hands regularly

Clean hands protect against many infections, including flu. Keeping your hands clean is an easy way to keep yourself and your family healthy.

Wash your hands with soap and running water regularly and dry them thoroughly with a single-use towel. You can also use an alcohol-based handrub if you can’t get to soap and water.

Remember — washing your hands properly takes about as long as singing “Happy Birthday” twice.

Avoid touching your eyes, nose and mouth

Germs are most likely to enter your body through the eyes, nose and mouth.

You can’t control everything you inhale, but you can reduce the risk of infection by keeping your hands away from your face.

If you do have to touch your eyes, nose or mouth, do it with a clean tissue, or wash your hands first.

Avoid being around sick people

Flu is contagious. It spreads easily in crowded spaces, such as on public transport, in schools and nursing homes and during public events.

When an infected person coughs or sneezes, droplets containing the virus can spread as far as one metre and infect others who breathe them in.

If you don’t feel well, stay home

If you’re ill with flu, being around others puts them at risk.

This is especially true for people with chronic medical conditions like cancer, heart disease and HIV.

Quickly isolating yourself can prevent the spread of flu and save lives.

FBNQuest Merchant Bank Shares Insights To Generational Wealth Transfer At Its Wealth Management Customer Forum

Brand Spur
-
0
FBNQuest Merchant Bank Shares Insights To Generational Wealth Transfer At Its Wealth Management Customer Forum

FBNQuest Merchant Bank, the investment banking and asset management business of FBN Holdings Plc, recently hosted its clients to a Wealth Management Customer Forum, facilitated to share in-depth analysis of the impact of long term wealth preservation and inter-generational wealth transfer.

The Forum, themed ‘Our Customers, Our Strength’ focused on three key topics- ‘Health is Wealth’ presented by Consultant Nephrologist, St. Nicholas Hospital Dr. Ebun Bamgboye; ‘Benefits of Generational Wealth Transfer’ delivered by Head Private Trust FBNQuest Trustees Mofoluke Keshinro; and ‘Trends & Opportunities in the Global & Local Economy’ by Head Macroeconomic and Fixed Income Research FBNQuest Capital, Gregory Kronsten.

On generational wealth transfer, the forum highlighted some of the challenges individuals and businesses encounter, due to lack of a proper estate plan. According to FBNQuest Trustees, insights have revealed that globally, only 30% of all family-owned businesses survive into the second generation and only 12% make it to the third generation.  It further explained that 72% of family businesses have no formal business continuity plans and only 7% have hired professionals to help deal with family relationship issues involved in planning for the continuation of the business. The forum also advised on the importance of securing your wealth through the services of professional financial institutions to guarantee successive generational wealth transfer and stable investment growth.

Speaking at the forum, Kayode Akinkugbe, Managing Director/CEO, FBNQuest Merchant Bank, reaffirmed the position of the bank to help customers build more long-term and strong investment portfolios through structured wealth management services. “We work with our clients to provide tailored investments solutions to help build, sustain and transfer wealth across generations. Over the years, we have actively partnered with both individual and institutional clients to grow financial assets and investment portfolios in line with varying wealth management objectives. We ensure that we seek investments that are safe, liquid and profitable for long term sustainability”.

Debbie Irabor, Head, Wealth Management at FBNQuest Merchant Bank, also stated that “the inheritors of a generational wealth transfer must maintain a more global outlook, in ways not only to preserve wealth but investment opportunities to maximise such wealth. This is why we ensure that our wealth management products and advisory services are specifically tailored, as we journey alongside our clients. This customer forum is also for us to engage, get customer feedback, strengthen our relationships, innovate and continue to provide clients with the best solutions required to manage their wealth.

The session also emphasised on the need for individuals to maintain healthy lifestyle habits as a key contributing factor to managing wealth while also highlighting some of the most common health challenges faced in our communities.  The FBNQuest Merchant Bank Wealth Management Forum is designed to appreciate the organisation’s customers and educate them on the importance of Wealth Preservation and Wealth Transfer.

Dangote Group, Togo Partner To Transform Phosphate Into Fertiliser

Brand Spur
-
0
Dangote Group, Togo Partner To Transform Phosphate Into Fertiliser

Dangote Industries Limited and the Government of Togo (GoT) have concluded an agreement to develop and transform Togolese phosphate into phosphate fertilizers for the West African sub-region; in a bid to improve consumption of the product in Africa.

With over two billion tonnes of phosphate reserves, Togo is one of the leading phosphate producers in Africa. By partnering the Dangote Group, the country intends to benefit from the expertise and investment capacity of Africa’s largest industrial group, according to a joint release issued by the Dangote Group and the Communications Department of the Presidency of the Republic of Togo.

With the completion and commissioning of the Dangote Petroleum Refinery and Fertilizer complex in Ibeju-Lekki, Lagos, Dangote Group will be the largest ammonia producer on the African continent, the release noted. Ammonia is an essential ingredient in the transformation of phosphate into fertilizer derived from phosphates. Under the agreement, Togo will provide access to phosphate resources and the Dangote Group will provide access to ammonia and to the Nigerian market.

The project, in line with the second pillar of the Togo National Development Plan, should enable the production of more than 1 million tonnes of fertilizers derived from phosphates once completed. The cost of the investment is estimated at about $2 billion and is expected to create several thousand direct jobs. Mining development work will start before the end of 2019, it added.

On this occasion, Dangote Group also announced the establishment of a cement manufacturing plant with an annual capacity of 1.5 million tonnes in Lomé. This plant will use clinker from Togo and Nigeria and will meet both local and neighbouring countries’ demand, the release noted.

It further added that construction of the Lome plant is billed to start in the first quarter of 2020 and its commissioning scheduled to take place before the end of 2020. The investment is estimated at $60 million and is expected to create 500 direct jobs.

Togolese President, Faure Gnassingbé said, “The structural transformation of our economy is the main objective we have set ourselves in the context of the 2018-2022 NDP. By processing our phosphate we will not only create jobs but we will also be able to provide our farmers with good quality fertilizers at an affordable cost. Having an industrial investor like Alhaji Dangoté shows that our efforts to improve the business climate are paying off. We intend to continue in this dynamic for the well-being of Togolese men and women.”

President/CE Dangote Group, Aliko Dangote said, ‘’This partnership is in line with our transformation agenda in creating prosperity and enhancing economic development not only in Togo but also in Africa.  In addition, the Dangote Group is determined in supporting the Government of Togo in its industrialisation strategy aimed at creating jobs for its citizens and making Togo an attractive investment destination.’’

The two investment agreements reinforce Togo’s industrialisation strategy adopted under the 2018-2022 National Development Plan.

Turkish Airlines Sponsors The 2019 African Economic Congress In Abuja

Brand Spur
-
0
Turkish Airlines Sponsors The 2019 African Economic Congress In Abuja

Turkish Airlines, the airline that flies to more countries and international destinations than any other airline in the world, recently became the Official Airline Sponsor of the African Economic Congress, which held at the Musa Yar’ Adua Centre in Abuja. Thus, the flag carrier showed its continued support of the growth of the African continent and its commitment to being a part of it. In June, Turkish Airlines launched flights to Port Harcourt, its third destination in Nigeria, connecting the city to over 300 destinations worldwide.

With over 500 participants, the three-day event which was themed “Building the Africa we want: A Scheme into Africa’s Investment Process and Drive”, focused on promoting essential collaborations between Africa and the world while addressing challenges in areas like trade and investment, agriculture, and economic policy.

Photo 2: General Manager, Turkish Airlines Abuja, Mehmet Asik delivering a speech at the African Economic Congress which held recently in Abuja.

Speaking at the event, General Manager of Turkish Airlines, Abuja, Mr Mehmet Asiksaid, “Nigeria remains one of our foremost markets, and we continually improve our services to meet the growing demand for travel in order to foster trade relations. At Turkish Airlines, we recognize the importance of tourism and connectivity and that is why we pay extra attention to our excellent service and exciting brand experience. We consider it is important that our passengers have an unparalleled travel experience when they are onboard our aircraft. We understand our position within Africa’s aviation landscape and our support to the African Economic Congress is a way of demonstrating that.”

This is coming on the heels of global carrier’s latest destination in Nigeria, Port Harcourt, where the airline has continued its operation of connecting people to the world.

Benin Medical Care, State-of-the-Art Medical Facility, Opens its Doors in Edo State (Photos)

Brand Spur
-
0
Benin Medical Care, State-of-the-Art Medical Facility, Opens its Doors in Edo State (Photos)

01st November; Benin City, Edo: Benin City was held spellbound this past weekend as Benin Medical Care (BMC), an ultra-modern Medical facility in Benin City, was officially commissioned and opened its doors to the public for the first time. BMC, a private 60-bed hospital and fully equipped diagnostic centre with the latest ultra-modern, international-standard diagnostics amenities, is positioned to cater to different kinds of health requirements for newborns, aged individuals and the general public. The Commissioning event was witnessed by top government officials, head of corporate bodies, traditional rulers, religious leaders, among other dignitaries.

R-L: The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki flanked by Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, and Member, Board of Directors, Benin Medical Care, Mrs. Ngozi Ehigiamusoe, at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.

Chairman of the Board of Directors, BMC, Godwin Ehigiamusoe (PhD), confirmed that “BMC is pioneering and blazing a new trail for holistic, quality healthcare in Nigeria.”

According to him, “BMC’s mission to enhance the health status of Nigerians, especially in Benin City and environs, informed the investment into the standard of the structure and the array of international standard medical equipment within the facility.”

L-R: Chief David Edebiri, the Esogban of Benin Kingdom, Member, Board of Directors, Benin Medical Care, Mrs. Ngozi Ehigiamusoe, Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, and Chairman, Board of Directors, LAPO Microfinance Bank, Dr. Osarenren Emokpae, at the recent Official Commissioning event of Benin Medical Care, state-of-the-art Hospital and Diagnostic Centre in Benin City, Edo State.

Special Guest of Honor at the event, Executive Governor of Edo State, Mr. Godwin Obaseki, in his address said, “This is a visionary and innovative edifice and would make Benin City one of the first stops for medical care within the country”. He reiterated the need for collaboration between the government and private sector to provide quality healthcare, emphasizing that all hands must be on deck to move each region and the country forward. Mr. Obaseki commended the Board of Directors of BMC for providing, through the facility and its services, a high standard of healthcare in Benin and Nigeria at large, while still ensuring that it is affordable.

The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, during his address at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.

Benin Medical Care (BMC) will run Community Health Outreach Programmes including rural mobile clinics, mobile phone health service and a Community Health insurance scheme through which cost of access to health will be lowered for individuals. BMC’s collaboration with other stakeholders in the health insurance space and the health sector will provide a partnership that brings quality healthcare closer to the people of Edo state as well as across other parts of the country.

L-R: Chief D.U. Edebiri, The Esogban of Benin, Chief Edionwe Oliha, The Oliha of Benin, The Osula of Benin and Chief Victor Uzamere, The Obadolaye of Benin.

BMC offers Hospital services such as Pediatrics, Obstetrics and Gynecology, Oncology, Cardiology, General Surgery, Ophthalmology, Dental services, Internal Medicine, ENT, Nephrology, Geriatrics and Urology, as well as a 24-hours Automated Laboratory and Ambulance Services. The Diagnostic Centre has the latest technology in health care with amenities such as 1.5T MRI, 64 Slice CT Scan, Fluoroscopy, Digital Mammography, 4D ultrasound, Digital X-ray, ECG, amongst others.

The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, during his address at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.
The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, during his address at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.
L-R: Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, Honorable Idubor Agharese, Seasoned Protocol Officer and Compere at the Event, and The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, during the ribbon cutting officially declaring the doors of Benin Medical Care open, at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.
L-R: Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, Honorable Idubor Agharese, Seasoned Protocol Officer and Compere at the Event, and The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, during the ribbon cutting officially declaring the doors of Benin Medical Care open, at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.
Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, during his address at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.
Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, during his address at the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.
L-R: Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, discussing with The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, during the Official Commissioning of Benin Medical Care, state-of-the-art Hospital and Diagnostic Centre in Benin City, Edo State.
L-R: Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, discussing with The Executive Governor, Edo State, His Excellency, Mr. Godwin Obaseki, during the Official Commissioning of Benin Medical Care, state-of-the-art Hospital and Diagnostic Centre in Benin City, Edo State.
L-R: Member, Board of Directors, Benin Medical Care, Mrs. Ngozi Ehigiamusoe, Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, and Pastor Charles Osazuwa during the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.
L-R: Member, Board of Directors, Benin Medical Care, Mrs. Ngozi Ehigiamusoe, Chairman, Board of Directors, Benin Medical Care, Godwin Ehigiamusoe PhD, and Pastor Charles Osazuwa during the Official Commissioning of Benin Medical Care, state-of-the-art Medical Facility in Benin City, Edo State.

Nigeria Breweries Earnings Review: Excise pressures and high leverage weighs on 9M profit

Brand Spur
-
0
Nigeria Breweries Earnings Review: Excise pressures and high leverage weighs on 9M profit
  • A decline in net revenue by 1.0%
  • Margins are thinner and this impacts on profits
  • A dividend of N 0.50/s declared and translates to a dividend yield of 1.1%

Excise duty pressures Net Revenue lower

In its recently released 9M numbers, Nigerian Breweries’ (NB) reported a marginal 1.0%y/y decline in Net Revenue (Gross Revenue less excise duty payments) to N235.7bn in 9M 2019 from N238.1bn in 9M 2018. Implementation of the second phase of the Ad Valorem excise duty system underpinned the decline in Net Revenue. Gross Revenue was higher by 1.9% y/y, but excise payments surged 43.2% y/y to N24.2bn. Excise to Gross Revenue ratio came in at 9.3% in 9M 2019 as against 6.6% in 9M 2018. On a q/q basis, the seasonal impact of fewer festivities weighed as Net Revenue fell 24.7% q/q to N65.5bn in Q3 2019 from N86.9bn in Q2 2019 (Q3 2018 – N65.4bn).

Gross Margin recovers on lower Raw material cost

Surprisingly, Cost of Sales fell 2.7% y/y to N139.5bn in 9M 2019 from N143.4bn in 9M 2018. The decline in Cost of Sales was driven by a 4.4% y/y decline in raw materials cost which was surprising considering the high price environment for raw materials like barley. The faster decline in Cost of Sales fed into improved gross margin which strengthened 1.0ppts to 40.8% as at 9M 2019. Gross Profit climbed higher by 1.5% y/y to N96.2bn in 9M 2019 from N94.7bn in 9M 2018. On a q/q basis, Gross Profit fell 33.0% to N24.5bn in Q3 2019 from N36.6bn in Q2 2019.

Opex jump on higher advertising costs

Operating Expenses climbed higher by 6.1% y/y to N71.8bn in 9M 2019 from N67.6bn in 9M 2018. The rise in Operating Expenses was driven by an 11.7% y/y rise in Marketing & Distribution Expenses due to a 21.7% y/y climb in Advertising Expenses as Nigerian Breweries fights for lost market share. On the other hand, Administrative Expenses recorded a double-digit decline of 11.7% y/y 9M 2019 due to reduction in staff headcount following the right-sizing exercise done last year.EBITDA edged lower by 2.4% y/y to N49.7bn in 9M 2019 from N50.9bn in 9M 2018 due to higher Opex while EBITDA margin slipped lower by 0.3ppts y/y to 21.1% in 9M 2019.

Commercial paper issuance drives finance cost higher

Net Finance Cost jumped 51.0% y/y to N8.0bn in 9M 2019 from N5.3bn in 9M 2018 on the back of lower Interest Income (down 4.2% y/y to N0.2bn) and higher Interest Expense (up 48.6% y/y to N8.2bn). NB’s higher Interest Expense was driven by higher Interest-Bearing Liabilities (up 70.9% y/y to N72.8bn) due to the recent Commercial Paper issuances done by the company to finance working capital. While Tax Expense declined 35.6% y/y to N4.9bn, Net income slumped 17.0% y/y to N12.3bn in 9M 2019 from N14.8bn in 9M 2018. We note the company recorded a loss of N1.0bn in Q3 2019 which was lower than the loss made in Q3 2018 (N3.6bn) due to lower revenue occasioned by seasonality.

NB declares interim dividend…The yield of 1.1%

The company declared a dividend of N0.50/s which translates to a dividend yield of 1.1% based on Monday’s closing price of N46.05/share.

Overall view – Excise pressure may force the price hike

Following the implementation of the second phase of the Ad Valorem excise regime, margins have grown significantly thinner, which is impacting on profits. While consumer pockets may be pressed, we believe Nigerian Breweries would have to raise beer prices in order to grow profitability. The loss-making position of the main competitor, International Breweries, may encourage NB to raise prices given IntBrew is expected to follow suit.

We have a Target Price of N55/s and we maintain that investors should hold.

FSDH RESEARCH

Dangote Sugar Earnings Review 9M 2019: Cost pressure drags profitability but renewed optimism

Brand Spur
-
0
Dangote Sugar Earnings Review 9M 2019: Cost pressure drags profitability but renewed optimism
  • Revenues increased by 0.6% y/y
  • Cost of Sales climbed by 2.0% y/y
  • Slump in investment income

Revenue recovers

Dangote Sugar released its 9M 2019 financials on October 29, 2019, where the company reported a 0.6% y/y rise in Revenue to N117.4bn in 9M 2019 from N116.8bn in 9M 2018. However, on a q/q basis, Revenue dipped 12.2% q/q to N37.1bn in Q3 2019 from N42.2bn in Q2 2019. Nevertheless, we note Revenue in Q3 2019 came in higher than Q3 2018 Revenue by 13.4% y/y. This suggests the company may be feeling the impact of the border closure positively as we believe the entry of smuggled sugar must have been severely limited. Across business segments, sales of the 50kg bag category grew 0.9% y/y to N111.2bn while Revenue from retail sugar was up 2.7% y/y to N3.3bn. On the other hand, Revenues from retail molasses and freight services were down 26.8% y/y and 7.3% y/y.

Raw sugar prices drive production cost higher

Cost of Sales climbed higher by 2.0% y/y to N88.4bn for 9M 2019 from N86.7bn in 9M 2018. On a q/q basis, Cost of Sales fell by 13.5%, higher than the 12.2% q/q decline in revenue. However, the growth in Cost of Sales on a y/y basis was faster than the growth in Revenue driven by 4.6% y/y growth in raw materials cost which suggests DangSugar must have been impacted by the mild pressure on raw sugar price. Consequently, Gross Profit fell 3.5% y/y to N29.0bn in 9M 2019 from N30.1bn in 9M 2018. Gross margin printed at 27.3% in 9M 2019, 1.3ppts lower than 9M 2018 28.6%.

Management keeps a lid on OPEX

Operating Expenses edged higher albeit marginally, up 1.6% y/y to N6.2bn for 9M 2019 compared to N6.1bn in 9M 2018 suggesting sustained efforts on keeping costs tight due to weak revenue growth. The rise in OPEX was driven by an 11.2% y/y growth in Administrative Expenses to N5.6bn. On the other hand, Selling & Distribution expenses were down 43.6% y/y to N607.0m. On the back of lower Gross Profit, EBITDA declined 5.1% y/y to N26.1bn in 9M 2019 from N27.5bn in 9M 2018. The EBITDA margin for 9M 2019 was lower by 1.3ppts y/y to 22.3%.

Investment income slumps as profit edges lower

EBIT fell 7.2% y/y to N22.5bn in 9M 2019 from N24.2bn in 9M 2018 on the back of lower Other Income (down 64.2% y/y to N122.1m) and lower operating profit. Notably, Investment income was lower by 72.5% y/y to N593.7m on the back of lower Cash & Cash Equivalents (down 60.6% y/y to N11.6bn). Lower Tax Expense (down 13.0% y/y to N6.1bn) cushioned the decline in Net Income which fell 12.0% y/y to N14.7bn in 9M 2019 from N16.7bn in 9M 2018. Earnings per Share (EPS) stood at N1.24/s for 9M 2019 compared to N1.41/s in 9M 2018.

Overall view – renewed optimism on border closure

Q3 results give us cause for optimism as Revenue continues to recover with the impact of the border closure being partially felt. While cost pressures, particularly on raw materials, remain, we are largely optimistic about Dangote Sugar going forward as we expect the full impact of the border closure to filter into Revenue in Q4. Target price of N12.50/s.

Dangote Sugar Earnings Highlight 9M 2019

FSDH Research

MTN Nigeria Earnings Review 9M 2019: Strong Operations but Leverage Casts a Shadow

Brand Spur
-
1
MTN Nigeria Earnings Review 9M 2019: Strong Operations but Leverage Casts a Shadow
  • Increased revenues by 12.0% y/y growth
  • Jump in net finance costs by 113.4% y/y
  • Solid performance, good buy

Data revenue surge as voice remains sturdy

In its recently released 9M 2019 financials, MTNN reported a 12.0% y/y growth in Revenue to N856.5bn in 9M 2019 from N764.5bn in 9M 2018. The growth in Revenue was driven by double-digit growth in both voice (up 10.1% y/y) and data Revenue (up 34.9% y/y). The growth in data was driven by recent data bundle repricing and improved 4G coverage. Furthermore, the company added 1.6m smartphones to its internet coverage while active data subscribers grew 7.6% to 22.3m subscribers driving data traffic growth of 68.9%. Voice Revenue climbed higher on the back of 0.2% q/q growth in voice subscriber base to 61.6m subscribers.

Best in class

EBITDA margin MTNN’s 9M 2019 performance saw it take the title of the most efficient company by EBITDA margin listed on the Nigerian Stock Exchange. MTNN posted EBITDA margin of 53.7% in 9M 2019, a 10.5ppts rise from 9M 2018’s 43.2%. EBITDA grew 39.3% y/y to N460.1bn in 9M 2019 from N330.2bn in 9M 2018. The growth in EBITDA came on the back of slower growth in Operating Expenses (up 8.7% y/y to N396.4bn in 9M 2019) compared to the growth in Revenue. Markedly, Direct Network Costs declined 21.7% y/y to N177.9bn due to a steep 29.2% y/y decline in BTS (Base Transceiver Station) lease payments. Other expense line items that declined include Value Added Service Costs (down 36.8% y/y) and Roaming Costs (down 13.4% y/y). On the other hand, we observed a steep increase in Cost of Handsets and other accessories (up 70.9% y/y) as the company continues to roll out smartphones in a bid to drive up smartphone penetration which stood at 41.7% according to the company.

Bump in finance costs; the sticking point

MTNN recorded a 113.4% y/y jump in Net Finance Costs to N74.2bn in 9M 2019 from N34.8bn in 9M 2018. This was driven by weaker Finance Income (down 3.8% y/y) and a significant rise in Finance Costs (up 72.8% y/y). We observed the company took on a new lease on which it made interest payments of N51.2bn in 9M 2019. This caused the unexpected deterioration in a leverage position. Consequently, Profit before Tax grew at a slower pace compared to EBITDA, growing by 24.0% y/y to N212.0bn in 9M 2019 from N171.0bn in 9M 2018. A lower effective tax rate of 30.0% drove slower growth in Tax expense and consequently, Net Income climbed 28.9% y/y to N148.3bn for 9M 2019. Earnings per Share printed at N7.29/s in 9M 2019 compared to N5.65/s in 9M 2018.

Overall view – solid operations; good buy but leverage is a key drag

Overall, the company’s performance continues to echo more optimism with all key performance indicators trending higher. The company’s improving efficiency would continue to sustain growth going forward while underlying market potential would continue to boost Revenue. Nevertheless, we remain uncomfortable with the increased leverage taken on by the company through the lease. We expect this to sustain slower growth in bottom-line relative to EBITDA and Operating Profit growth. Overall, solid company; good buy.

MTN Nigeria PLC Earnings Highlights 9M 2019

FSDH Research
1...4,2754,2764,277...5,509Page 4,276 of 5,509