Weekly Nigerian Stock Market At A Glance ended August28, 2015

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By Benjamin Ameh, Lagos

A turnover of 2.051 billion shares worth N17.869 billion in 21,762 deals were traded this week by investors on the floor of The Exchange in contrast to a total of 4.304 billion shares valued at N20.048 billion that exchanged hands last week in 20,219 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.733 billion shares valued at N12.004 billion traded in 12,855 deals; thus contributing 84.48% and 67.18% to the total equity turnover volume and value respectively. The Conglomerates Industry followed with a turnover of 153.481 million shares worth N367.996 million in 1,269 deals. The third place was occupied by the Consumer Goods Industry with 77.577 million shares worth N3.379 billion in 3,496 deals.

The Top Three Equities namely by volume: Zenith International Bank Plc; United Bank for Africa Plc, and Access Bank Plc accounted for 851.981 million shares worth N6.646 billion in 4,894 deals, contributing 41.54.% and 37.19% to the total equity turnover volume and value respectively.

Thirteen (13) equities appreciated in price during the week, higher than eleven(11) equities of the preceding week. Sixty-five (65) equities depreciated in price, lower than Sixty-one (61) equities of the preceding week, while one hundred and twelve (112) equities remained unchanged, lower than one hundred and eighteen (118) equities recorded in the preceding week

The top 10 performed stocks in the week under review were the shares of Dangote Sugar Refinery Plc, Skye Bank Plc, Wema Bank Plc, Forte Oil Plc, Guinness Nigeria Plc, Fidelity Bank Plc, Stanbic IBTC Holdings Plc, Paints and Coatings Manufactures Plc, Associated Bus Company Plc, Costain (West Africa) Plc.

Forte oil plc having successfully concluded the final year accounting with general election over and following steady oil price at international market.

GMD also revealed that additional capital will soon be injected into Forte Oil Plc that will significantly shore up shareholders funds and impact its negative working capital. That the company had concluded its arrangement to diversify into the upstream space through profitable acquisition of upstream assets going forward, he added.

Speaking during the company’s facts behind the figures presentation to the investing community at the Nigerian Stock Exchange (NSE) on Monday, Lagos, Group Managing Director, Forte Oil, Akin Akinfemiwa said that the company would diversify into the upstream space through profitable of upstream assets and harness partnerships with quick service restaurants, financial institutions and telecommunications firms.

Akinfemiwa disclosed that the company had entered into strategic partnership and alliances with technical partners to participate in the proposed Federal Government sale of marginal oil fields and divestment of International Oil Companies (IOC) investment in local oil blocks.

“There is an ongoing plans and commitment with potential investors to inject additional capital through debt or equity within the next few weeks. This, we believe, would significantly impact our negative working capital and also shore up our shareholders funds,” he affirmed.

Akinfemiwa added that the company would also unveil business strategies aimed at boosting the company’s revenue and shareholders’ value in 2015 financial year.
According to him, the company would improve operating margins and diversify revenue base by focussing on high margin products such as expanding the Geregu power plant assets with additional 21 mega watts which is potential cash flow and lubricants with aggressive marketing

“Forte Oil’s downstream petroleum operations extend to Ghana, where its subsidiary, AP Oil and Gas Ghana Limited (APOG) maintains a significant network of retail outlets. This is inline with forte oil’s regional expansion plans into the West African markets such as Liberia, Togo, and Sierra Leone leveraging Ghana as a hub” he said.

“The Company would pursue a merger and acquisition exercise with partners with the same similarities with the company’s corporate governance strategy.”

Forte Oil Plc is oil and gas industry opened its market price with N228.70K and closed the price on N249.89K, created price gap of N21.19k leaving increase at 9.27 percent for the week.

In his words: “We remained committed to making our power business a key driver of our growth initiative by ensuring that it contributes 40 per cent to our group profit before tax in the near future. To this end, we have contracted and commenced a major overhaul of our 414-megawatts Geregu Power Plant to Siemens AG.”

Akinfemiwa affirmed that the management was confident the company is on the right path to becoming Nigeria’s foremost integrated solutions provider with the unveiling of its five-year growth and consolidation strategy.

The Company remains committed to its vision of being the foremost integrated energy solutions provider in Nigeria with strong presence in downstream operations, power and upstream services.

“We will be expanding our reach in the near term to the upstream sector and other related high margin business that will continue to maximize shareholders’ wealth.”
In the same vein: FO was among the companies that reported their results for the first quarter (Q1) ended March 31, and second quarters (Q2) ended June30, 2015 respectively through the floor of the Nigerian Stock Exchange to investing community showed the integrated energy solutions provider posted gross profit of N4.1 billion, compared with N4.1 billion in the corresponding period of 2014.

This affected the bottom line in Q1 as profit after tax fell from N1.1 billion to N784 million. Although the company strived to reduce costs in the areas of sales, distributions and administration, finance charges rose by 37.5 per cent.

The Forte Oil’s half year (Q2) results showed revenue of N61.17 billion for the ended June 30, 2015, as against N79.61 billion recorded in the preceding period of 2014, showing a decrease of 23 per cent.

While Profit before tax stood at N3.26 billion compared with N4.19 billion achieved in 2014, howbeit, profit after tax dropped by 19 per cent to N2.53 billion against N3.13 billion posted in the comparative period of 2014.

However, market analysts are of the opinion that the performance of the company would improve significantly in the remaining three quarters before than the assets acquired with the banks borrowings begin to yield results.

Dangote Sugar Refinery Plc having identified the impact on Nigerian from imported sugar always, either raw for refining or in it refined and granulated forms without any native sugar production industry of any scale and the federal government in 2012 drew up the Nigerian Sugar Master Plan, which is an ambitious drive to make the country self-sufficient in this basic commodity.
The above strategy is policy of ‘Backward integration’ which if followed well can create thousands of jobs and bring more of cash inflow for the country. Dangote sugar is an integral part of this policy ‘national plan in 2012’ which is now almost ready for production
Speaking during its Annual General Meeting held in Lagos recently, the chairman of the company, Aliko Dangote said “Recall that we have already begun the implementation of our sugar development plans. Ten years from now, our target is to produce 1.5million tonnes of refined sugar from locally grown sugarcane that is process of our own, onsite facilities in locations close to key Nigerian markets. We will maximize opportunities to benefit from the extended value chain in sugar production, with the production of fuel ethanol and the generation of electricity from our factories. We believe that our expansion project will generate more than 100000 job opportunities in the coming decade.”
Dangote also said that to this end, your board is following a prudent course of action that will support our backward integration project and enable our company to sustain a stranger financial footing in the future.
“We are driven by a desire to contribute positively towards the development of the communities in which we operate, and to society at large.”
Chairman assured the shareholders that Dangote sugar will continue to implement its sustainability agenda, which is the platform it uses in the delivers of its commitments with focus on environmental awareness, promoting health and safety and minimizing the risk within our operations.
In response to outlook of the company, Dangote said, despite our present economic challenges, the board remains very confident that our company is positioned strongly to enhance its leadership position and our expansion strategy will deliver business success and long term value for shareholders.
He reassured the stakeholders and shareholders that, “I am confident that we have the right strategy, the right people and the right resources to continuously deliver sustainable growth for the company, and return to shareholders in the years ahead.”
At Dangote our goal is to improve everyday life, by providing high quality products and services, whether it’s food, shelter or communication. It is our way of raising the quality of life for all, making life just a little sweeter for everyone.
“Despite challenging circumstances in the past year, the group posted a turnover of N95billion in 2014. Profit before tax stood at N15.3billion, and Profit after tax anchored on N11.6billion. While, earning per share totaled 97kobo, an increase of 8percent over the corresponding year.
Dangote Sugar Refinery Plc recorded a PAT of N11.6 billion in 2014 up from N10.8 billion. Based on the performance, the directors recommended dividend of N4.8 billion, which translates into 40 kobo per share.
During 2014 the primary focus of Dangote Sugar was primary to enhance its operational efficiency, focus on growth plans increase sugar production, and to continue to provide for the needs and requirements of its customers, employees and stakeholders generally.
“Our performance in 2014 was impacted by operational challenges including disruptions to the supply of natural gas (our primary energy source) to the, Apapa Refinery, currency depreciation and the challenges of the security situation in north-eastern Nigeria,” the company said.
The company opened it market price on the floor of the Nigerian Stock Exchange with N6.01k while it closed the same market on N7.26k. The actions created an increase of N1.25k over the previous price which is representing 20.80 percent.
The Dangote was deliberately re-focused on route to market; consumers’ needs and aspirations, products quality, capacity expansion and zero business waste are already producing a sturdier business model which enables us to grow sustainably into the future.
The route to market transformation involved rationalization of trade inventories which brought pressures to a weak performance in the year under review.
However, the performance trend from the last quarter of the year signifies definite progress towards realizing our growth ambitions and making the business more competitive. The short-term impact of our deliberate transformation actions is a 7percent in revenue, an operating margin stood at 8percent from 13.10 percent in last year and a drop in earnings per share from N1.25k in 2013 to N0.64k.
The directors recommend to the shareholders the payments of a cash dividend in respect of the year ended December 31, 2014 of N378329625 that translate to 10 kobo gross dividend per share which immediately approved by the shareholders.
Guinness Nigeria Plc share rose from N119.00k to N127.01k thereby growth to N8.01k represents 6.73percent Fidelity Bank Plc is a fully integrated commercial bank focused on building and maintaining a well-respected brand that caters to the needs of its growing corporate, commercial and consumer banking clientele. Fidelity Bank Plc shares rose by 4.80 percent or N0.06 to N1.31 from N1.25, Skye Bank Plc achieved 17.59 percent or N0.35 price increase, closing at N2.33 from N1.99; Wema Bank plc went up by 11.25 percent or N0.09 to close at N0.89 from N0.80; Stanbic IBTC Holdings Plc advanced by 3.94 percent or N0.71 to close at N18.71 from N18.00; Paints and Coating Manufactures Plc gained 3.63percent or N0.04 to close at N1.14 from N1.10, while Associated Bus Company Plc appreciated by 1.89 percent or N0.01to close at N0.54 from N0.53 per share, Costain (West Africa) PLC rose by 1.75 percent showed an increased figures N0.01 to closed at N0.58 from the initial opening figure of N0.57 per share respectively .


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