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NB Plc Records 25% Profit Decline, Recommends N20bn Final Dividend

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Nigerian Breweries PLC
  • NB Plc Records 25% Profit Decline, Recommends N20bn Final Dividend

Nigerian Breweries Plc monday announced its audited results for the year ended December 31, 2016, showing a decline of 25 per cent in profit after tax (PAT), reflecting the challenging operating environment.

Although the leading brewer posted a growth of 6.7 per cent in revenue, a combination of rising inflation and impact of the naira devaluation drove down its bottom-line. Specifically, the company recorded a revenue of N313.743 billion in 2016, up from N293.9 billion in 2015. Cost of sale rose from N149.73 billion to N178.218 billion. Marketing and distribution expenses also rose from N58.45 billion to N61.312 billion. While the company brought down administrative expenses, finance cost increased by 66 per cent from N8.217 billion to N13.645 billion. However, this increase was majorly driven by net foreign exchange loss of about N7.552 billion, compared to N752 million in 2015.

Following the huge forex loss, Nigerian Breweries Plc ended the year with profit before tax of N39.675 billion, down from N54.514 billion in 2015 and PAT of N28.416 billion as against N38.05 billion in 2015.

The directors have recommended a final dividend of N20.457 billion, which translate to N2.58 per share. This brings the total dividend to N28.386 billion or N3.58 per share, having already paid an interim dividend N7.929 billion or N1.00.

However, the directors of the company have also made a recommendation to the shareholders to receive new ordinary shares of in the company instead of the final dividend.

While commenting on its nine months results last year, Nigerian Breweries had said that although the operating environment was expected to remain challenging for the rest of the year, it would “continue to focus on our twin agenda of cost and market leadership supported by innovation.”

The firm expressed confidence that it was well positioned to take advantage of any upswing in the market.

Meanwhile, the stock market opened on a positive note as bargaining hunting activities dominated the trading yesterday. The Nigerian Stock Exchange (NSE) All-Share Index appreciated by 0.34 per cent to close at 25,249.49. The positive performance was partly bolstered by increased demand for Nigerian Breweries Plc as investors reacted to the full year results.

Other stocks that influenced the performance included: Diamond Bank, Oando, Guinness and PZ Cussons among others. The total value of stocks traded on stood at N985.67 million, down by 50.20 per cent from N1.98 billion recorded last Friday. The total volume of stocks traded was 110.01 million in 2,160 deals.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Crude Oil

Brent, WTI Crude Prices Rise in Response to Expected Trump’s Policies

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Crude Oil

Oil prices rose nearly 1 percent on Thursday as the market considered how US President-elect Donald Trump’s policies would affect supplies.

Brent crude oil futures settled up 71 cents, or 0.95 percent at $75.63 a barrel while the US West Texas Intermediate (WTI) crude rose 67 cents, or 0.93 percent to $72.36.

Prices gained support from expectations that Trump’s incoming administration may tighten sanctions on Iran and Venezuela.

On Wednesday, the election of former Republican President Trump initially triggered a sell-off that pushed oil down by more than $2 as the US dollar rallied.

A strong Dollar makes oil expensive and this typically leads to a drop in prices.

In his first term, Mr Trump put in place harsher sanctions on Iranian and Venezuelan oil, limiting supply and supporting oil prices.

However, his successor, Mr Joe Biden briefly rolled back the sanctions but he would later reinstate them.

Such a move would raise the cost of China’s imports, piling pressure on a refining sector grappling with weak fuel demand and tight margins.

However, China and Iran have built a trading system that uses mostly Chinese Yuan and a network of middlemen, avoiding the Dollar and exposure to US regulators, making sanctions enforcement tough.

However, analysts say that the US government has been reluctant to take steps that would remove supply from the global market as a result of the Russia-Ukraine war.

Also supporting prices, the US Federal Reserve cut interest rates by a quarter of a percentage point at the close of its policy meeting on Thursday.

The US Federal Reserve said it will continue assessing data to determine the pace and destination of interest rates as officials reset tight monetary policy to account for inflation that has slowed markedly in the past year and is nearing the US central bank’s 2 percent target.

Interest rate cuts typically boost economic activity and energy demand.

Support also came as some companies cut supply in the US due to Hurricane Rafael. According to the US Bureau of Safety and Environmental Enforcement (BSEE), over 22 percent equivalent to 391,214 barrels per day, of crude oil production was shut in response to the hurricane.

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Petrol

Three Oil Companies Ask Court To Stop NMDPRA From Seizing Their Petrol Import Licences, Accuse Dangote Refinery of Monopoly

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Aliko Dangote - Investors King

In response to Dangote Refinery N1 billion suit, three oil companies including Matrix Petroleum Services Limited, A.A. Rano Limited, and AYM Shafa Limited, have prayed the Federal High Court in Abuja to stop the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) from reviewing or withdrawing their import licenses.

The oil companies also urged the court not to block them from importing petrol in the interest of energy security and promotion of healthy competition in the Nigerian oil and gas sector.

Dangote Refinery had approached the court and filed and a N100 billion suit in damages against NMDPRA for allegedly continuing to issue import licenses to NNPCL, Matrix, and other companies for importing petroleum products such as Automotive Gas Oil (AGO) and Jet Fuel (Aviation Turbine Fuel), despite that the refinery is producing the products in quantity that meets Nigerians’ needs.

The refinery also dragged NNPCL, AYM Shafa Limited, A.A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited in the suit.

Counsel to Dangote Refinery, Ogwu James Onoja SAN, in the originating summons, dated September 6, 2024, claimed that NMDPRA contravened Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing import licenses for petroleum products.

Onoja stated that such licenses should only be granted in cases of petroleum product shortages and not when Dangote Refinery is meeting the needs of the populace.

According to Onoja, NMDPRA has been discouraging local refiners such as Dangote Refinery by its actions.

Responding to the suit through their written address and counter-affidavit, dated November 5, 2024, and filed by Ahmed Raji SAN, the three oil companies said their businesses do not in any way hamper, disrupt, or harm Dangote Refinery’s operations.

The three defendants claimed the plaintiff allegedly sought to monopolise the petroleum industry in Nigeria, where it alone would control supply, distribution, and pricing.

In the defendants’ affidavit, deposed by Ali Ibrahim Abiodun, Acting Managing Director of AYM Shafa (with the consent and authority of Matrix, A.A. Rano, and AYM), it was stated that the defendants are qualified and capable of being licensed as importers of refined petroleum products under Section 317(9) of the PIA and that their licenses to import such products were lawfully issued by the appropriate authority, NMDPRA.

The deponent claimed that it typically takes an average of two months for Dangote Refinery to fulfill orders and that it rarely meets demand, with trucks waiting for months to be loaded at the refinery.

In contrast, he claimed it takes about three weeks to import petroleum products from offshore refineries.

The affidavit revealed that A.A. Rano’s oil depot in Lagos has a storage capacity of 55,000,000 liters and can load about 200 trucks per 24 hours.

The deponent stated that the company also owns 220 filling stations and another 85 affiliates and leased filling stations.

According to the deponent, AA Rano was one of the first to take delivery of AGO from Dangote Refinery, loading 20,000 MT of AGO on or about April 16, 2024, and has since purchased and loaded additional cargoes totaling approximately 190,000,000 liters.

Despite this patronage, the affidavit claimed that Dangote Refinery has continued to place obstacles that make it difficult for A.A. Rano to purchase products solely from the refinery.

The oil companies called on the court to dismiss the suit.

Meanwhile, the court adjourned the matter till January 20, 2025, for a status report.

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Energy

Malaysia’s CNG Ban Sparks Debate in Nigeria as Tinubu Pushes for CNG Adoption

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Nigerians on and off social media have expressed concern following a recent decision by the Malaysian government to phase out Compressed Natural Gas (CNG) vehicles by July 2025.

While the Nigerian government continues to urge citizens to use CNG as a cleaner, cheaper fuel alternative to petrol, Anthony Loke, Malaysian Transport Minister, questioned the safety of CNG.

Announcing the ban, the Malaysian Minister highlighted the risk associated with CNG vehicles, especially after tanks exceeded their 15-year safe usage limit.

Minister Loke announced the ban while speaking at a press conference on Wednesday, November 6.

The Malaysian Minister disclosed that the ban will affect over 44,000 vehicles in Malaysia, including private cars, taxis, buses, and industrial machinery.

According to Loke, “These NGV tanks have a safe usage lifespan of approximately 15 years, and if they are not replaced, they become unsafe to use and may fail at any time.”

Loke announced that the phase-out will be in stages with the first being the halting of CNG sales by the state oil and gas corporation, Petroliam Nasional Berhad (Petronas) at its stations starting July 1, 2025.

The latest development has sparked numerous reactions as Nigerians criticized the Tinubu government for adopting CNG amid Malaysia’s phase-out.

Reacting to the development, @Gozie_mu wrote, “Nigeria to embrace it because we are the world’s dumping site.”

Another user, @iniekott, wrote: “Meanwhile, Nigerian rulers are putting CNG forward as a safe alternative to petrol.

“Note the clear-headed and tangible provisions made by the Malaysian government to help citizens with the transition.”

“Malaysia introduced CNG in the 1990s; now they are stopping it in 2024, while Bola and his supporters are asking Nigerians to change to CNG. APC is taking you 34 years backwards, but some of you’re defending it,” a user, PaschalNwosu5 wrote.

#SmartAtuadi criticized the government’s carelessness saying, “Nigeria seems determined to promote CNG without considering the safety implications that Malaysia has raised.”

Many others called on the government and government officials to lead by example by converting their vehicles to CNG before urging Nigerians to do so.

#Oserume1 commented, “If CNG was a good idea, Tinubu would have converted his official luxury Cadillac Escalade from petrol to CNG!”

@ekenezion said, “The president refused to convert his Escalade to CNG.”

@buzuzu7 opined, “I will only embrace this if all ministers and the presidency lead by example. I can’t be your guinea pig.”

The Nigerian government had since reacted to the CNG ban in Malaysia.

The Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, in his statement said the planned phase-out by the Malaysian government speaks more to the safety of LPG and not the safety of CNG.

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