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NNPC Subsidiary’s Profit Drops by 34%

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NNPC - Investors King
  • NNPC Subsidiary’s Profit Drops by 34%

The National Engineering and Technical Company Limited on Friday announced that its profit before tax for the 2017 financial year dropped by 34 per cent to N3.26bn when compared with the previous year.

NETCO, a subsidiary of the Nigerian National Petroleum Corporation, stated that the PBT decreased by 34 per cent when compared with the N4.9bn it recorded the preceding year.

The company’s Board Chairman, who doubles as the NNPC’s Chief Operating Officer, Upstream, Mallam Bello Rabiu, said the decrease was attributable to the foreign exchange gains, which constituted 56 per cent before tax in 2016 as compared to 4.8 per cent gain in 2017.

He, however, stated that the firm’s revenue increased by 122 per cent from N10.13bn in the previous year to N22.46bn in 2017.

Rabiu stated this at the firm’s 2017 Annual General Meeting in Abuja.

He said the operating profit of NETCO increased by 134 per cent from N0.89bn in 2016 to N2.07bn in 2017, adding that the result was the outcome of improved performance in project execution and cost reduction measures, as well as the new addition of construction and procurement portfolios in the company’s activities.

Rabiu observed that for the first time since the establishment of NETCO, the company was able to declare the highest dividend of N750bn to its shareholders at the AGM.

The Group Managing Director, NNPC, Maikanti Baru, commended the management of NETCO for the performance and assured the company of his continued support.

Baru stated that based on the firm’s performance, he would ensure that NETCO got more projects, especially in the gas sector.

He congratulated the outgoing Managing Director of NETCO, Siky Aliyu, for leaving a legacy behind for his successor, and expressed optimism that the company would perform better next year.

Aliyu had earlier stated that the company set a target to perform 600,000 man-hours of work in 2018, adding that it would continue to explore new opportunities and improve on service delivery to engender more confidence in its clients and stakeholders.

He said his retirement from the corporation would take effect from May this year, adding that he would leave behind a firm that had the largest information technology facilities in the engineering field, with a wide range of choice software for process simulations, plant modelling, structural analysis, stress analysis, designing of control systems engineering, drafting and project management.

NETCO was established in 1989 to acquire engineering technology through direct involvement in all aspects of engineering in the oil and gas and non-oil sectors of the economy. It recently added construction and procurement to its portfolios in the industry.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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Gas-Pipeline

The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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