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Finance

Highlights of Berger Paints Financial Statements in 2020

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Berger Paints

Berger Paints Nigeria Plc, a leading player in the coating and allied industry, grew revenue by 7.1 percent to N3.84 billion in the financial year ended December 31, 2020, despite COVID-19 disruption. See the complete highlights below.

Highlights of Audited Financial Statements of Berger Paints Nigeria Plc for 2020

2020 financial year ended with a profit of N146 million, see below for further analysis of the result.

  • Revenue increased by 7.1% from N3.58 billion in 2019 to N3.84 billion in 2020 driven by volume growth despite the shutdown in economic activities, disruptions and environmental unrest and the loss of sales for about 7 weeks in the year.
  • Gross profit declined by 15% from N1.66 billion in 2019 to N1.42 billion in 2020 with gross margin of 37%. The decline was largely due to the impact of the COVID-19 pandemic which resulted into a global scarcity of raw materials and consequently a significant rise in raw material prices. Difficulty in sourcing for forex also impacted the cost of inputs significantly.
  • EBIT at N154.05 million representing 62% decline from 2019. This is principally due to the decline in gross profit, increased focus on health and safety in response to the COVID 19 pandemic, recruitment of key management staff and general rise in prices of operational purchases.
  • Net finance income declined 56% due to the shortfall in investment income in the year and impact of the interest rates fluctuations in the year.
  • Profit for the year declined 67% largely on the account of the decline in EBIT and finance income.
  • Free cash flow remained strong at N529 million, representing 34% increase from FY 2019. This shows that the Company remains healthy and is still thriving in the current environment.
  • Earnings per share declined by 68%. However, a proposed dividend of 40 kobo per share for the year demonstrates the company’s unflinching commitment to its promises to the shareholders.

Speaking on the company’s performance in 2020, the Managing Director, Anjan Sircar said: “In spite of the emergence of COVID 19 and other environmental and economic unrest at various times in 2020 in the country which led to the loss of 7 weeks of sales, the performance of BPN for the financial year ended 2020 shows modest revenue growth when compared to the 2019 results. The revenue growth has been largely driven by the strategic focus on the sales of premium products and inclusion of new business partners. This also contributed to the volume growth.

“Just like every other company hit by the impact of the pandemic, we experienced disruptions in oursupply chain presenting difficulties in the purchases of raw materials and resulting in sharp increases of input costs. Furthermore, the challenges in sourcing for foreign exchange and the congestions at our Ports impacted on the Company’s ability to obtain raw materials at advantageous prices.

“However, we have taken steps to reduce similar impact on our business in the future, including undertaking a robust review of our business continuity processes. We have also adopted new business strategies and initiatives for better and improved performance in the 2021 financial year.

“The Company remains strong in its commitment to its shareholders, hence I am pleased to announce that the Board will be recommending to shareholders the payment of 40 kobo per ordinary share to be paid to its shareholders which is 60% higher than the 25 kobo paid in previous year. This is however subject to withholding tax and final approval at the 2021 Annual General Meeting.”

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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Finance

ARISE IIP and Africa Finance Corporation Launch US$ 100M Capital Pool for African Entrepreneurs

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ARISE IIP, the pan-African developer and operator of world-class industrial parks, and Africa Finance Corporation (AFC), the leading infrastructure solutions provider in Africa, today announced the signing of a Memorandum of Understanding to establish a dedicated US $100 million capital pool for African entrepreneurs who are establishing operations within any of the Arise IIP Special Economic Zones (SEZ) in Africa. 

At the heart of this partnership is a shared vision to uplift African entrepreneurs by providing them with much needed financing and advisory services to catalyse growth.

AFC will also actively seek financing from Export Credit Agencies (ECAs), local and regional financial institutions to mobilise funding to support these companies.

This concerted effort underscores ARISE IIP and AFC’s commitment to fostering industrialisation, job creation and economic prosperity in Africa.

Under this partnership, AFC’s comprehensive suite of financial services will extend beyond financing to include financial advisory support for corporate finance, equipment financing and market entry including assisting with joint ventures and technical partnerships for sponsors that may require it, to ensure they are well-equipped to seize opportunities and thrive within the SEZs.

By tapping into AFC’s extensive network and expertise, ARISE IIP aims to cultivate a vibrant ecosystem that nurtures entrepreneurship and drives sustainable economic development across the continent.

Gagan Gupta, CEO of ARISE IIP said about this partnership: “ARISE IIP is about empowerment. By empowering our customers, and ensuring they have the robust financial support needed to meet their operational objectives, this collaboration with Africa Finance Corporation, our long-lasting partner, takes us one step closer to realising our vision of an industrialised and prosperous Africa.

Samaila Zubairu, President & CEO of AFC said: This partnership marks a significant milestone in our commitment to offer strategic financial advisory and corporate finance services to firms focused on value capture and import substitution projects in Africa. By collaborating with our investee company Arise IIP and African entrepreneurs in our Special Economic Zones, we aim to foster an ecosystem that will increase trade, create jobs, and drive economic advancement on the continent.

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Finance

United Capital Plc Reports Stellar Growth with 65% Profit Increase, Announces Dividends

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United Capital - Investors King

United Capital Plc (NGX: UCAP) has unveiled its unaudited financial results for the period ending June 30, 2024.

The company reported a 38% increase in gross earnings year-on-year to N15.15 billion. Profit before tax soared by 63% to N9.06 billion while profit after tax surged by 65% to N7.74 billion.

Total assets rose by 27% in the first half to N1.19 trillion, and shareholders’ funds increased by 33% to N120.34 billion.

These robust results have prompted United Capital to declare an interim dividend of N0.90 per 50 kobo ordinary share, alongside a generous bonus share offering of “2 for 1.”

Peter Ashade, Group CEO, expressed satisfaction with the strong financial outcomes, highlighting the company’s commitment to creating wealth and delivering superior value to shareholders.

“This marks a historic moment with our first-ever interim dividend and bonus share announcement, demonstrating our dedication to stakeholder value,” Ashade stated.

The company remains confident about sustaining its growth trajectory throughout 2024, bolstered by nearly N1.3 trillion in funds under management.

United Capital continues to prioritize activities that enhance and preserve value for stakeholders, maintaining its competitive edge and profitability.

With a focus on trusts, mutual funds, and professionally managed investments, the group is strategically positioned to achieve its growth objectives, ensuring sustainable returns for all involved.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits

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Central Bank of Nigeria (CBN)

Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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