Finance

Meyer Cost of Sales Dwarf Profit in the Nine Months Ended September 30, 2021

Published

2 years ago

October 18, 2021

Meyer Plc, one of Nigeria’s manufacturers and marketers of high-quality Paints, continue to struggle in the first nine months ended September 30, 2021.

In the company’s unaudited financial statements filed with the Nigerian Exchange Limited (NGX) and seen by Investors King on Friday, Meyer grew revenue by 34 percent from N566.511 million recorded in the first nine months of 2020 to N759.157 million in the nine months ended September 30, 2021.

However, the company spent 66.48 percent of its revenue on sales. Cost of Sales stood at N504,702 in the period under review.

Therefore, gross profit inched slightly higher by 23.46 percent to N254.455 million, up from N206.097 million achieved in the first nine months of 2020.

Loss from operating activities moderated to -N51.694 million in the period under review from -N133.510 million posted in the corresponding period.

Profit before tax rose to N13.534 million in the first nine months of 2021, up from -N98.404 million filed in 2020 during the peak of the global pandemic. The company paid N4.060 million in taxes in the period under review.

Similarly, profit after tax improved from -N100.528 million recorded in the same period of 2020 to N9.474 million in 2021.

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Samed Olukoya

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

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Loans

Afrexim Bank Seeks Oil Traders to Finance $3 Billion Loan to Bolster Nigeria’s Naira

Published

5 hours ago

September 27, 2023

Investors King

Afrexim Bank has turned to oil traders to secure a crucial $3 billion loan for the state oil company NNPC LTD, sources close to the matter have revealed.

As the naira hit an all-time low of 1,000 to the dollar on the black market, Afrexim Bank’s initiative aims to provide much-needed relief to the country’s economic woes.

Afrexim Bank, Africa’s foremost export-import bank, has been actively seeking interest from traders over the past few weeks to back the loan, which will be secured against the country’s oil reserves. The bank is now in the process of finalizing the loan terms to present to potential trading partners.

One oil executive privy to the discussions commented, “There is a lot of interest, but they need to see terms.” The executive also noted that the recent surge in oil prices, which have climbed past $90 per barrel, is expected to fuel even greater interest in the deal.

Under the proposed arrangement, traders who provide funding will be reimbursed with physical cargoes of oil. Afrexim Bank is diligently calculating the precise volume of oil that will be offered to these traders in exchange for their financial support, according to one of the sources.

NNPC LTD, Nigeria’s state oil company, announced the $3 billion loan in August as part of its concerted efforts to bolster the weakening naira. The devaluation of the currency and the resulting gap between official and black market exchange rates have prompted individuals and businesses to turn to the unofficial market to obtain dollars, further exacerbating the country’s economic challenges.

The central bank of Nigeria is grappling with a substantial backlog of nearly $7 billion in naira forwards, constraining the availability of dollars in the official market. This has necessitated creative solutions, such as Afrexim Bank’s partnership with oil traders, to mitigate the currency crisis.

President Bola Tinubu, who assumed office in May, initiated reforms that allowed the official naira exchange rate to decline against the dollar.

This policy shift, accompanied by a nearly triple increase in fuel prices, was intended to align market dynamics. While initially successful in narrowing the gap between the official and black market rates, the discrepancy has since widened.

In another move to curtail fuel smuggling and reduce pressure on NNPC to import petrol, President Tinubu authorized a more than threefold increase in pump prices. Despite these measures, NNPC is still fulfilling its obligations to oil trading firms with crude oil, limiting its immediate access to oil resources.

As Nigeria navigates the challenging economic terrain, the collaboration between Afrexim Bank and oil traders presents a unique opportunity to strengthen the naira and stabilize the country’s financial outlook. However, the success of this innovative financing arrangement will depend on the final terms agreed upon and the willingness of traders to participate in the venture.

NNPC has yet to comment on the development, and Afrexim Bank has not issued an immediate statement regarding this initiative. Nevertheless, all eyes are on this groundbreaking partnership as Nigeria seeks to restore stability to its currency and economy.

Banking Sector

Access Holdings Posts 52.6% Profit for the First Half of the Year

Parent Company of Access Bank Celebrates Remarkable Financial Performance in H1’23

Published

1 day ago

September 26, 2023

Investors King

Access Holdings Plc, the parent company of Access Bank, has reported a 58.9 percent surge in gross revenue to N940.3 billion for the first half of 2023.

The financial services giant also recorded remarkable growth in Profit Before Tax (PBT) and Profit After Tax (PAT) at 71.4 percent and 52.6 percent, respectively, culminating in N167.6 billion for PBT and N135.4 billion for PAT during the same period.

These financial milestones were unveiled as part of Access Holdings’ Audited Consolidated and Separate Financial Statements for the period concluding on June 30, 2023.

The driving force behind this unprecedented growth can be attributed to a potent combination of factors. A 63.0 percent growth in interest income and a 51.9 percent increase in non-interest income fueled the surge in gross revenue.

Access Holdings also witnessed a 35 percent year-to-date growth in customer deposits, capping the first half of 2023 at an impressive N12.5 trillion. This remarkable achievement encompassed all business segments, reinforcing the Group’s status as Nigeria’s largest financial institution by total assets.

The company’s total assets grew by 39.0 percent year-on-year to N20.9 trillion while shareholders’ funds surged by 40.6 percent to N1.7 trillion.

These astounding figures underline the Group’s ability to generate value from a diversified business portfolio, spanning banking, asset management, and payment services.

Herbert Wigwe, the Group Chief Executive Officer of Access Holdings Plc, commented on the company’s positive performance, saying, “Our growth plans for the African continent remain firm and clear, driven by the strong long-term growth prospects and trade opportunities seen across many of the countries.”

He went on to emphasize the company’s commitment to its 5-year cyclical strategy, stating, “Our primary objective remains to transform Access Holdings Plc into a leading financial and ecosystem player, fostering opportunities for shared prosperity among all stakeholders.”

Finance

Naira Struggles as Apex Bank Delays Clearing $10 Billion Forex Debts

Published

2 days ago

September 25, 2023

Investors King

The Nigerian economy is facing growing uncertainty as the Central Bank of Nigeria (CBN) has yet to fulfill its promise of clearing over $10 billion in foreign exchange debts owed to Deposit Money Banks (DMBs).

This delay has placed immense pressure on the country’s currency, leading to a challenging situation for both financial institutions and the general public.

Over two weeks ago, the immediate past acting CBN Governor, Folashodun Shonubi, had announced that negotiations on these dollar debts with commercial banks had been concluded and all forex exchange backlogs would be cleared within one to two weeks.

However, multiple top bank executives have revealed that the promise remains unfulfilled, leaving banks in a tight FX liquidity position.

This liquidity crunch has compelled many lenders to temporarily suspend various FX transactions, including school fees and Personal Travel Allowance applications. The situation has also worsened the dollar scarcity at the parallel market, prompting bank customers to turn to the black market to meet their forex needs.

The delay in clearing these forex debts has further eroded confidence in the naira, resulting in a decline in its value to between 990/$ and 995/$ in major cities like Lagos, Abuja, and Kano.

Economic experts warn that if the situation persists, it could lead to higher costs of goods and services, causing more businesses to shut down.

Manufacturers, who heavily rely on imported raw materials, fear that the rising costs will lead to unaffordable products and a preference for cheaper imported alternatives.

The appointment of a new CBN Governor, Dr. Olayemi Cardoso, comes at a critical time, with the central bank facing significant challenges related to the forex market and currency stability.

As the nation grapples with these economic pressures, it remains to be seen how the new leadership will address these issues and restore confidence in the financial markets.