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CAP Profit After Tax Declined by 24.4 Percent in First Nine Months of the Year

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CAP Paint - Investors King

CAP Posted N928 Million Profit After Tax in First Nine Months of the Year

Chemical and Allied Products Plc (CAP), one of Nigeria’s leading paints manufacturers, reported a 24.4 percent decline in profit after tax in the nine months ended September 30, 2020.

In the financial results signed by Chinwe Okpala, Head, Corporate Affairs and Communications, CAP Plc, the paints manufacturer grew revenue by 3.7 percent year-on-year to N6 billion during the period under review. This represents a 10.8 percent increase when compared to the same period of 2019 when there was no COVID-19 pandemic.

This, the company said was due to 33.7 percent growth recorded in the third quarter when the Federal Government eased lockdown and opened up the economy.

However, the company’s gross profit declined by 2.1 percent year-on-year during the period to N2.7 billion. Largely due to surge in operating cost because of the disruption of global supply chain, rising inflation and double currency devaluation.

Also, profit before tax declined to N1.4 billion, “reflecting a decline of 850 basis points on Profit Before Tax margin due to the decline in operating profit; and a 40.6% decline in net finance income due to lower investment income yields compared to prior year,” the report reads.

Profit after tax declined by 24.4 percent from N1.2 billion achieved in the same period of 2019 to N928 million in the period under review.

Accordingly, earnings per share dipped by 24 percent from 175 kobo posted in corresponding period of 2019 to 133 kobo in the first nine months of 2020.

Speaking on the company’s performance, David Wright, Managing Director, David Wright, said: “In the last quarter of 2019, CAP embarked on a new growth strategy focused on creating value for our shareholders and we are encouraged by the top line growth thus far. CAP’s performance in 2020 has been affected by COVID-19, particularly in April and May as a result of the stringent movement restrictions which constrained production and led to supply chain disruptions.

“Despite the challenging operating environment, we achieved strong revenue and volume growth of 34% and 34.6% respectively in the third quarter of the year. Going forward, we expect to continue to see the positive effects of our growth strategy on our sales and remain focused on managing operating costs to deliver on profit ambitions in the fourth quarter.”

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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Nigerian Exchange Limited

Nigerian Exchange Returns to Red Zone, Equity Investors Lose N67bn

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stock - Investors King

The Nigerian Exchange plunged back into the red zone on Thursday as equity investors incurred N67 billion in losses.

The downward trend was primarily attributed to widespread sell-offs observed across key sectors, including banking, insurance, and consumer goods.

The All-Share Index closed the trading session with a decline of 0.12 percent to settle at 101,239.10 index points while the market capitalization closed lower at N55.40 trillion.

Despite a brief respite earlier in the week, the market failed to sustain its positive momentum.

Year-to-date returns moderated to 35.39 percent, reflecting the volatile nature of recent trading sessions.

Trading activities remained subdued with a 16.43 percent decrease in traded volume to 252.9 million units.

Similarly, total traded value declined by 24.54 percent to N4.94 billion, accompanied by a 15.83 percent dip in total deals to 7,248.

Market breadth leaned towards negativity, with 22 gainers overshadowed by 28 losers.

The decliners included notable companies like Daar Communications, Wema Bank, and PZ Cussons, which collectively contributed to the bearish sentiment prevalent in the banking, insurance, and consumer goods sectors.

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Bonds

Federal Government Falls Short: Raises N1.5tn at February Bond Auction

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Bonds- Investors King

The Federal Government’s February bond auction fell short of its target as it raised N1.5 trillion instead of the planned N2.5 trillion.

The Debt Management Office (DMO) announced this shortfall in a press release on Tuesday. The auction included bonds maturing in 2031 and 2034, with a combined offering of N2.5 trillion.

Despite the lower-than-expected outcome, the DMO highlighted significant investor interest with total bids reaching N1.9 trillion, the highest recorded in any single FGN Securities Auction.

The 2031 bond received allotments totaling N873.53 billion, while the 2034 bond saw allotments amounting to N621.38 billion, making for a total allotment of N1.495 trillion.

The government’s decision to raise funds through bonds reflects its ongoing efforts to meet financing needs and attract both local and foreign investors.

However, the shortfall indicates a potential mismatch between the government’s funding requirements and investor appetite.

While the auction outcome signifies continued investor confidence in Nigerian securities, it also underscores the importance of closely monitoring government borrowing and fiscal management strategies to ensure sustainable debt levels and investor trust in the market.

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Nigerian Exchange Limited

Nigeria’s Equities Market Rebounds, Gains N165 Billion Amid Investor Optimism

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Nigerian Exchange Limited - Investors King

Nigeria’s equities market rebounded on Wednesday as gained N165 billion in value amid renewed optimism and strategic re-entry into undervalued stocks.

The recent downturn which plagued the market earlier in the week saw investors holding back amidst uncertainties surrounding fixed-income securities’ interest rates.

However, Wednesday’s rebound reflected a shift in sentiment as investors identified opportunities for lucrative returns in value stocks.

Key players such as BUA Cement and FBN Holdings spearheaded the market’s upward trajectory with notable gains observed across various sectors.

BUA Cement surged by 4.93% from N142.95 to N150 per share while FBN Holdings gained by 9.96% from N26.10 to N28.70 per share.

Despite these gains, Okomu Oil Palm experienced a decline with its share price dropping from N270 to N243, representing a 10% decrease.

The market’s positive performance defied earlier projections of a prolonged bearish trend. Analysts had anticipated a continuation of the subdued market activity due to prevailing uncertainties in the fixed-income segment.

Wednesday’s trading session saw increased activity, with investors exchanging 302,739,517 shares valued at N6.552 billion across 8,611 deals.

Active trading was observed in stocks such as FBN Holdings, Japaul Gold, Transcorp, Veritas, and GTCO.

The surge in the equities market reflects investors’ resilience and their confidence in the long-term prospects of Nigeria’s economy.

It also underscores the dynamic nature of the market, where strategic investments and timely interventions can yield substantial gains even in challenging times.

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