May & Baker Nigeria Plc has sustained its positive performance despite the inclement operating environment, recording profit after tax (PAT) of N30.09 million for the half year ended June 30, 2016.
Details of the results showed that May & Baker recorded a turnover of N3.70 billion, showing an increase of nine per cent above the N29.7 billion in the corresponding period of 2015. The company continued to benefit from management’s focus on overall operational efficiency.
For instance, while administrative expenses rose on the back of the high inflation from N263.45 million to N309.48 million; distribution, sales and marketing expenses dropped by 12.4 per cent from N583.20 million to N510.84 million. In all, total operating expenses declined to N820.31 million in 2016 as against N846.65 million in 2015, while finance costs reduced from N284.38 million to N255.80 million.
Consequently, profit before tax rose to N44.25 million, up from N43.73 million recorded in comparable period of 2015, while PAT increased from N29.73 million to N30.09 million. Earnings per share thus improved from 3.03 kobo in 2015 to 3.07 kobo in 2016.
Market analysts said the performance has raised the prospects of good returns in the ongoing business year. The company had increased total dividend payout by 20 per cent to N58.8 million, for the 2015 business year compared to what it paid for 2014 business year.
Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, had told shareholders at the 2016 annual general meeting (AGM) that management would remain focused on improving the performance of the company in spite of the challenges in the macro economy. He assured that the company will remain focused on its long-term goal of building a virile and diversified business that can ensure good competitive long-term returns to the shareholders.
Speaking in a similar vein, Chairman of the company, Lt. Gen. Theophilus Danjuma (rtd), told shareholders that the company was set to break new grounds and enhance the value of their investments.
He said May & Baker Nigeria plans to expand into new business areas as it seeks new opportunities that will add value to its performance while sustaining the growth of existing businesses and investments.
According to him, with its existing businesses showing resilience and the continuing operational efficiency of its World Health Organisation (WHO)-certified pharmaceutical complex in Ota, Ogun State, May & Baker is shifting focus to acquire new competences and expand its business into new profitable ventures.
Gold Gained Ahead of Joe Biden Inauguration 2021
Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.
The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.
He said, “The key factor appears to be the (U.S.) currency.”
As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.
Also, the effectiveness of the vaccines can not be ascertained until wider rollout.
Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.
Crude Oil Holds Steady Above $55 Per Barrel on Tuesday
Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.
Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.
While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.
On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”
“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.
Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.
Crude Oil Pulled Back Despite Joe Biden Stimulus
Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.
Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.
On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.
OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”
“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”
Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.
“The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.
Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.
But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.
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