The Nigerian Naira plunged to N360 against the US dollar at the parallel market on Wednesday, following a supply shortage of the greenback in the interbank market.
The local currency was traded at N354 against the US dollar on Tuesday, before supply gap in the interbank market widens the difference between the parallel market and interbank rates.
Foreign exchange dealers attributed the development to inadequate liquidity in the forex market.
While currency analysts have said until the Central Bank of Nigeria address the current shortage and devise a better solution to liquidity issue at the interbank level, this will continue.
“This is a liquidity problem, any shortage or additional supply of the greenback will definitely impact the Naira,” said Samed Olukoya, a foreign exchange analyst at Investors King Ltd. “Once addressed, the forex market should return to normalcy.”
The central bank has used intermittent intervention to prop up the Naira exchange rate at the interbank level, but with crude oil prices below $50 a barrel and militant resumed attack that has reduced production by 600,000 barrels a day. It is not clear how the Central Bank of Nigeria plan to sustain the forex market or contain parallel market from reaching N400 a dollar this year.
Currency experts had earlier predicted that the abandonment of Naira’s fix rate would attract foreign investors to offset the anticipated forex deficit, but the global uncertainties caused by the exit of the U.K from the European Union continue to cast doubt on that assumption.
“Nothing much is really happening on the supply side of the market. Liquidity issue is still there. We actually felt that foreign investors should have been coming in by now,” said Kunle Ezun, a currency analyst at Ecobank Nigeria.
Meyer Cost of Sales Dwarf Profit in the Nine Months Ended September 30, 2021
Meyer Plc, one of Nigeria’s manufacturers and marketers of high-quality Paints, continue to struggle in the first nine months ended September 30, 2021.
In the company’s unaudited financial statements filed with the Nigerian Exchange Limited (NGX) and seen by Investors King on Friday, Meyer grew revenue by 34 percent from N566.511 million recorded in the first nine months of 2020 to N759.157 million in the nine months ended September 30, 2021.
However, the company spent 66.48 percent of its revenue on sales. Cost of Sales stood at N504,702 in the period under review.
Therefore, gross profit inched slightly higher by 23.46 percent to N254.455 million, up from N206.097 million achieved in the first nine months of 2020.
Loss from operating activities moderated to -N51.694 million in the period under review from -N133.510 million posted in the corresponding period.
Profit before tax rose to N13.534 million in the first nine months of 2021, up from -N98.404 million filed in 2020 during the peak of the global pandemic. The company paid N4.060 million in taxes in the period under review.
Similarly, profit after tax improved from -N100.528 million recorded in the same period of 2020 to N9.474 million in 2021.
United Capital Reports 72 Percent Increase in Profit After Tax in 9 Months
United Capital has officially rebounded from COVID-19 negative impact following a strong financial statement report released on Friday, October 15, 2021.
The company grew revenue by 60 percent year on year from N7.07 billion recorded in the first nine months of 2020 to N11.33 billion in the nine months ended September 30, 2021.
Operating income also jumped by 64 percent to N11.08 billion in the period under review, up from N6.76 billion achieved in the corresponding period.
As expected, operating expenses grew with an increase in revenue to N4.24 billion in the nine months under review from N2.95 billion filed in the first nine months of 2020.
Profit before tax stood at N7.09 billion in the first nine months of 2021, representing an increase of 72 percent when compared to N4.12 billion posted in the same period of 2020.
Profit after tax responded positively as it jumped by the same 72 percent year-on-year to N5.97 billion from N3.46 billion recorded in 2020.
Earnings per share also grew by 72 percent year-on-year from 77 kobo in 2020 to 133 kobo in the period under review.
See other United Capital key Financial Highlights
- Total Assets: N400.75 billion, compared to N222.75 billion as at FY 2020 (80% year-to-date growth)
- Total Liabilities: N373.86 billion, compared to N198.32billion as at FY 2020 (89% year-to-date growth)
- Shareholders’ Fund: N26.89 billion, compared to N24.43 billion as at FY 2020 (10% year-to date growth)
Comparing 9M 2021 with 9M 2020, the following are worthy of note:
− Total Revenue: During the period under review, United Capital’s total revenue increased by 60% year-on-year driven largely by growth in fee and commission income (+112% year-on-year) and Investment Income (+43% year-on-year).
− Cost-to-Income ratio: The company continue to maintain improvement in operational efficiency as cost-to-income ratio for the period declined by 10.25 percentage points largely attributable to the impressive growth in revenue (+64% year-on-year) relative to operating expenses (+44%year-on-year).
− PBT Margin: United Capital recorded an improvement in Profitability margin during the period under review as PBT margin increased by 7.32 percentage points to 62.60% in 9M 2021 compared to 58.33% in 9M 2020 as PBT grew by 72% year-on-year during the period under review.
− PAT Margin: PAT margin also increased, gaining 7.47 percentage points to 52.65% in 9M 2021 compared to 49.00% in 9M 2020 as PAT increased by 72% year-on-year during the period.
− Total Assets: United Capital’s total assets during the period under review grew by 80% year to date on the account of 98% increase in cash and cash equivalents and 90% growth in financial asset investment
Commenting on the company’s performance the Group CEO, Mr. Peter Ashade, said “I am pleased to inform our stakeholders that United Capital ended the third quarter of the year with another outstanding performance. We delivered an increased revenue of 60% year-onyear, PBT growth of 72% year-on-year to N7.09b and total asset growth of 80% year-to-date.
“During the period under review, United Capital successfully listed three series commercial papers worth N19.72 billion on the FMDQ Securities Exchange. The CPs were issued under the company’s N50 billion commercial paper issuance program. This has further positioned us as a company to provide a wider range of wholesale financing solutions to our clients and complement funding base and support for all our businesses.
“Another remarkable point to note was the Nigerian Stock Exchange’s reclassification of United Capital shares from Low Price Stock Group to Medium Price Stock Group in August 2021 driven by steady growth in the company’s share price over the past months due to our consistent impressive performance over the years.
“I want to assure our stakeholders that we are optimistic on sustaining this exciting performance in the last quarter of the year and beyond. We remain focused on our transformation agenda and to continue to provide best-in-class solutions to all client segments. We are also committed to deliver superior returns as we seek to always delight our shareholders.”
B2B Domestic Payment Transaction Values to Exceed $54 Trillion by 2023; Returning to Pre-COVID Levels
A new study from Juniper Research has found that the transaction value of B2B domestic payments across payment methods will exceed $54 trillion in 2023, up from $49 trillion in 2021. The research predicts a growth of 10%; reflecting a slow recovery in business activity following the impact of the COVID-19 pandemic.
The research identified that while many businesses are now operating at pre-pandemic levels, the longer-term economic consequences of the pandemic are still restricting value growth. As such, leveraging payments automation to reduce manual work and boosting small business cashflow will be critical to recovery.
For more insights, download the free whitepaper: Breaking the Innovation Stalemate in B2B Payments
Domestic Payment Methods Shifting as Digital Takes Hold
The new research, B2B Payments: Key Opportunities, Vendor Strategies & Market Forecasts 2021-2026, found that the need to automate B2B payments at scale is leading to a fundamental shift in the way payments are made. The research forecasts that the volume of B2B domestic cheque payments will fall by 30% globally between 2021 and 2023, with cash payments falling by 11% over the same period. The need to automate payments means a shift towards more easily automated payment types, such as card and instant payments.
Research author Nick Maynard explained: “The pandemic has accelerated the transition away from traditional payment types, with growth focused on instant payments and card payments. This transition will be important for automation, but will take some time, given the established nature of these processes.”
Instant Payments – Fastest-growing B2B Domestic Payment Method
The research found that by 2023, global instant payment transaction volumes in the B2B domestic channel will grow by 56%; the fastest of any single payment method. The research identified the launch of instant payment schemes that can carry additional remittance data as having significant potential for simplifying the complex B2B payments ecosystem. However, the report acknowledged the uneven state of instant payments scheme roll-outs as a critical limiting factor, with Europe moving much faster than North America.
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