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Flour Mills Grew Profit by 150.3 Percent to N5.65 Billion in Q3 2020/21

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flour mills posts 184% increase in PAT

Flour Mills Grew Profit by 150.3 Percent to N5.65 Billion in Q3 2020/21

Flour Mills, Nigeria’s leading integrated agro-allied business, declared strong performance for the third quarter ended December 31, 2020.

In the financial statements released on Tuesday, Flour Mills grew profit by 150.26 percent year-on-year to N5.6 billion in the third quarter.

While revenue increased by 31 percent in the quarter and the entire year, with all segments expanding by over 25 percent. Revenue rose to N200 billion in the quarter and for the entire year, revenue stood at N555 billion.

Profit Before Tax rose from N17.5 billion posted in the first nine months of 2019/20 to N23.6 billion at the end of December 2020/21.

The leading agro company grew finance income by a whooping 3,164.3 percent year-on-year to N2.5 billion while finance costs also increased by 16.28 percent year-on-year to N4.98 billion.

Flour Mills Key Financial Highlights for Third Quarter 2020/21

  • Flour Mills revenue rose by 31.11 percent year on year to to N200.23 billion.
  • The firm cost of sales grew by 30.3 percent year-on-year to N178.08 billion.
  • Gross profit jumped by 38.02 percent on a yearly basis to N22.16 billion in the period under review.
  • Distribution and selling expenses expanded by 22.53 percent to N2.35 billion.
  • Administrative expenses declined by 20.90 percent to N5.33 billion in the third quarter.
  • Flour Mills reduce net operating loss by 887.13 percent year-on-year to N3.72 billion.
  • Operating profit appreciated by 46.02 percent year-on-yea to N11.48 billion.

Speaking on the strong performance, Boye Olusanya, the Group Managing Director, said “Our ability to stay resilient, while growing organically in a rapidly changing environment, validates our investment strategy, and the strength of our diversified portfolio.

“We are keeping in stride with the government’s vision to ensure food sufficiency and have delivered another truly remarkable result this year. Our priorities remain the same – feeding growth and productivity in Nigeria’s food and agro-allied sector, feeding communities with empowerment, and feeding Nigeria’s future with significant backward integration projects.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Union Bank CEO, Godson Chukwuemeka Okonkwo Acquires 2.4 Million Shares in the Bank Ahead of Acquisition

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Union bank - Investors King

The Chief Executive Officer, Union Bank Plc, Godson Chukwuemeka Okonkwo, has purchased 2,431,917 ordinary shares of the bank, according to the latest disclosure filing from the lender.

The CEO acquired the 2,431,917 shares of Union Bank at N4.90 per share on Thursday 6th May 2021 from the floor of the Nigerian Exchange Ltd.

Okonkwo’s N11.916 million investment was after Investors King reported a possible acquisition of the bank by Zenith Bank or Access Bank following sources cited by Bloomberg.

Bloomberg said, “Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond has received a number of approaches for its 49.97 per cent holding in Lagos-based Union Bank of Nigeria.”

It also stated that Atlas Mara received interests from Nigerian and Middle Eastern lenders for its remaining assets on the continent, according to Bloomberg sources.

The sources claimed the banks in talks with Atlas Mara asked not to be identified as talks are private. But they mentioned Nigeria’s Zenith Bank Plc, Access Bank Plc and Morocco’s Attijariwafa Bank as some of the banks that have so far expressed interests in acquiring Union Bank.

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Banking Sector

Zenith Bank, Access Bank, Others Express Interest in Acquiring Union Bank

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Atlas Mara - Investors King

Zenith Bank and Access Bank are some of the financial institutions in talks to acquire Atlas Mara Ltd.’s 49.97 percent stake in Union Bank Plc.

Bloomberg said, “Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr. Bob Diamond has received a number of approaches for its 49.97 per cent holding in Lagos-based Union Bank of Nigeria.”

It also stated that Atlas Mara received interests from Nigerian and Middle Eastern lenders for its remaining assets on the continent, according to Bloomberg sources.

The sources claimed the banks in talks with Atlas Mara asked not to be identified as talks are private. But they mentioned Nigeria’s Zenith Bank Plc, Access Bank Plc and Morocco’s Attijariwafa Bank as some of the banks that have so far expressed interests in acquiring Union Bank.

Middle Eastern banks and private equity suitors have also shown interest, according to the people. Some potential buyers have indicated they may acquire all of Atlas Mara’s remaining assets in Africa, which would include its Zimbabwe unit, the people said.

Atlas Mara has been working with Rothschild & Co. to consider options for its Union Bank stake. No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said.

Representatives for Atlas Mara and Zenith Bank didn’t immediately respond to requests for comment. Attijariwafa Bank Managing Director Ismail Douiri and a representative for Access Bank declined to comment.

Speaking on the matter, Frontier and Sub-saharan Africa Banks’ Analyst, Renaissance Capital, Adesoji Solanke, on Thursday said this is good for Atlas Mara.

He said “Good for Atlas Mara if they’re able to exit successfully, as they’ve been selling a bunch of assets over the past year, to KCB and Access Bank respectively across different markets. Whether they get a good valuation for Union Bank is another thing.

“We don’t think it’ll be a transformational deal for Access or Zenith (Return-on-Equity dilutive for both), but could be a good way for the Middle Eastern banks to get a decent foothold in the market. We suspect getting the other private equity investor block to sell will be critical as we wouldn’t expect a strategic bank investor to desire a minority shareholding.”

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Banking Sector

Sterling Bank Post N2.4 Billion Profit After Tax in Q1 2021

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Sterling Bank - Investors King

Sterling Bank Plc grew profit after tax from N2.065 billion recorded in the first quarter (Q1) 2020 to N2.395 billion in the first quarter of 2021.

In the bank’s unaudited financial statement, gross earnings moderated to N31.016 billion in the quarter under review, down from N32.916 billion posted in the corresponding quarter of 2020.

The lender’s operating income rose from N19.968 billion in Q1 2020 to N20.088 billion in Q1 2021, while net operating income after impairment moderated slightly from N18.779 billion in the same quarter of 2020 to N18.321 billion in the quarter under review.

Sterling bank reduced total expenses incurred to N15.816 billion in Q1 2020, down from N16.560 billion in Q1 2021.

Profit before tax stood at N2.505 billion in Q1 2021, up from N2.219 billion achieved in Q1 2020.

Total assets increased to N1.393 trillion in Q1 2021 from N1.299 trillion posted in the final quarter of 2020.

Sterling Bank’s Financial Highlights

• Gross earnings contracted to N31.0 billion primarily due to an 11.0% dip in interest income. This was however moderated by a 27% growth in noninterest revenue.
• We recorded a 15.6% decline in interest expense. This delivered an 80 bps drop in cost of funds as yield on earning assets declined by 210bps. Consequently, net interest margin stood at 7.2%.
• Moderated operating expense further by 4.5% driven by reduction in administrative and depreciation expenses as we continued to optimize our investments across board.
• Customer deposits grew by 9.3% while maintaining a healthy deposit mix of 70.5% in low-cost funding.
• Loans & advances increased by 6.0% YTD to N632.5 billion as cost of risk increased marginally by 10 bps to 0.9%. NPL ratio remained stable at 1.9%.
• Overall the Bank grew its balance sheet by 7.3% to N1.39 trillion and delivered a profit after tax of N2.40 billion in the first quarter of the year.

Commenting on the bank’s performance, Abubakar Suleiman, Chief Executive Officer, Sterling Bank Plc, said “During the quarter, the campaign to vaccinate the global population against COVID-19 gained ground, bolstering consumer and investor confidence. At the macro level, treasury yields, and oil prices retraced towards their historical averages, contributing to reserves accretion and easing the pressure in the foreign exchange markets.

“Riding on the improved operating environment, the bank recorded a year-on-year double-digit growth in profit after tax in the first quarter, aided by a 9.3% rise in customer deposits and a 15.6% decline in funding cost.

“In furtherance of our transformation agenda, we formally launched our digital commodity marketplace, SABEX. This is a product of three years of experimentation and extensive consultation with all key stakeholders and an important component of our strategy to use technology to improve productivity for players across the HEART sectors.

“Overall, we closed with a profit after tax of N2.40 billion in the first quarter of the year, a 16% improvement on the corresponding period in 2020.”

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