C and I Leasing, a Nigerian maritime company, reported a 129 percent decline in profit after tax for the period ended December 31, 2021, despite slashing personnel expenses.
The company gross earnings fell 5.5 percent from N21.275 billion recorded in the 2020 financial year to N19.883 billion in 2021. Income from lease rental also dipped by 9.1 percent to N16.222 billion. Net lease rental income stood at N8.255 billion in 2021, a decline of 14.3 percent from N9.634 billion filed in the corresponding period of 2020.
Net income from outsourcing also dropped to N1.273 billion in the year under review from N1.602 billion in 2020. Depreciation expense rose to N4.291 billion while personnel expenses inched lower by 6.1 percent to N1.289 billion.
C and I Leasing managed to reduce operating expenses by 36.75 percent from N1.716 billion to N1.085 billion. This significant decline helped bolstered profit before tax by 2.1 percent to N484.9 million in 2021. See other key highlights below.
C and I Leasing Key Financial Highlights for 2021:
▪ Total assets of N58.13 billion, up by 3.74% year-to-date (December 2020: N56.1 billion)
▪ Finance cost of N4.6 billion, declined by 15.1% year-on-year (12M 2020: N5.4 billion)
▪ Shareholders’ funds of N13.77 billion, up by 3.3% year-to-date (December 2020: N13.34 billion)
▪ Capital adequacy ratio of 21% (CBN requirement: 12.5%)
Commenting on the company’s performance, Ugoji Lenin Ugoji, the new Chief Executive Officer/MD, of the company, said “On the Economic Outlook for Q1 2022 and roundup for four quarters of 2021, with only about 2.5% of Nigerians and 10.1% of Ghanaians fully vaccinated COVID-19’s pandemic rippling effects are still being felt by both economies and by extension in most businesses where we have our operations domiciled. We saw a dull demand for some products coupled with rising cost of goods.
“This affected the cash flows of a lot of businesses. However, GDP growth rates of Nigeria and Ghana are expected to be at 2.7% and 6.17% respectively for 2022 and we envisage an increase in demand for products as both economies continue to open and an increased recovery of oil demand”.
“Furthermore, inflationary pressures as well as exchange rate fluctuations have been issues the company continues to deal with. However, measures are in place to ensure we hedge against such uncertainties and an increased focus is now being given non-asset-based revenue options to create a counterbalance for low asset utilization caused by shrinking demand for the assets. Despite the challenges, we have remained focused on cost optimization, business process improvement initiatives and ensuring efficiency in the management of our sales performance.
“We are also actively working on digitizing our value offerings across the Fleet Management, Outsourcing and Marine businesses with increased attention on our emerging E-Business platforms. As you may be aware, people empower technology, technology empowers innovation, the business landscape changes, and this cycle continues, yielding positive results in the long run”.
“We remain resilient; with increased vaccine rollouts, we are hopeful there will be a consistent economic recovery though fault lines such as renewed waves and new variants of the virus pose concerns for the outlook. Amid exceptional uncertainty, the global economy is projected to grow by 4.4% in 2022, specifically the economy of Sub-Saharan Africa is projected to grow by 3.7% in 2022 but we are confident that our business is fundamentally strong to withstand any future challenge towards enhanced performance”.
Nigerian Breweries Records $99 Million Foreign Exchange Loss, CEO Reveals
Nigerian Breweries, a subsidiary of Heineken NV, has faced a setback as it disclosed a $99 million foreign exchange loss in its recent financial report.
The revelation was made by Hans Essaadi, the CEO of Nigerian Breweries Plc, during an investor call held in Lagos.
Essaadi attributed the loss to a myriad of economic challenges gripping Nigeria, including the drastic devaluation of the naira and cash scarcity resulting from the nation’s demonetization program.
He explained that the mainstream lager market witnessed a significant decline due to consumers’ inability to afford products like Goldberg after a hard day’s work.
The naira’s depreciation, losing approximately 70% of its value against the dollar since June, has exacerbated inflation to almost 30% in January.
These economic upheavals have placed immense strain on household incomes, especially in a nation where a significant portion of the population lives in extreme poverty.
Despite recording a 9% increase in revenue to 599.6 billion naira, Nigerian Breweries reported a staggering net loss of 106 billion naira for the fiscal year 2023, a stark contrast to the 13.18 billion naira profit from the previous year.
In response to the ongoing challenges, Nigerian Breweries aims to source more raw materials locally to mitigate foreign exchange risks.
The company has also implemented higher product prices effective February 19th to navigate through the turbulent economic landscape.
Despite the bleak financial report, Essaadi affirmed Nigerian Breweries’ commitment to weathering the storm, expressing confidence in the company’s portfolio, processes, and personnel to navigate the challenging market conditions ahead.
Barclays Plc Shares Surge 6.9% on £10 Billion Shareholder Payout Announcement
Shares of Barclays Plc surged by 6.9% following the announcement of a monumental £10 billion shareholder payout.
The British banking giant’s decision to return such a substantial sum to its investors marks a significant milestone in its financial strategy.
The announcement comes in the wake of Barclays’ robust performance, culminating in a return on tangible equity of 9% for the fiscal year 2023.
Demonstrating a forward-looking approach, the company aims to elevate this metric to above 12% by the year 2026, underlining its commitment to sustained growth and profitability.
Chief Executive Officer C.S. Venkatakrishnan expressed Barclays’ dedication to optimizing its operations and enhancing shareholder value.
By implementing rigorous cost-cutting measures, the company plans to reduce costs by £2 billion over the coming years.
The restructuring efforts extend to the reorganization of Barclays into five distinct divisions, each strategically positioned to cater to diverse client needs and optimize service delivery.
The surge in Barclays’ shares reflects investor confidence in the bank’s strategic direction and its ability to deliver on its promises.
The appointment of new leadership roles and the realignment of business divisions underscore Barclays’ proactive stance in adapting to evolving market dynamics and regulatory landscapes.
Barclays’ pledge to streamline operations, bolster returns, and prioritize shareholder interests positions it favorably within the competitive financial landscape.
The £10 billion shareholder payout announcement signals a pivotal moment for Barclays Plc, solidifying its status as a formidable player in the global banking arena and setting the stage for sustained growth and value creation in the years ahead.
Capital One Financial Corp. to Acquire Discover Financial Services in $35 Billion Mega Deal
Capital One Financial Corp. has announced its intention to acquire Discover Financial Services in a $35 billion deal.
This strategic acquisition positions Capital One as the largest credit card company in the United States by loan volume, intensifying competition with Wall Street’s prominent players.
Under the terms of the agreement, Capital One will purchase Discover at a premium, offering 1.0192 of its own shares for each Discover share—a 26.6% premium based on the closing price on February 16th.
Pending regulatory and shareholder approvals from both entities, the deal is anticipated to conclude in late 2024 or early 2025.
The merger between Capital One and Discover represents the most significant global consolidation this year, surpassing notable acquisitions in various sectors.
By combining forces, Capital One and Discover unite two esteemed consumer-finance brands, effectively eclipsing competitors such as JPMorgan Chase & Co. and Citigroup Inc. in US credit-card loan volume.
This acquisition not only amplifies Capital One’s market share but also grants the company a formidable position within the payment networks sphere.
Capital One’s CEO, Richard Fairbank, described the merger as a “singular opportunity” to establish a robust presence alongside the largest payment networks, underscoring the transformative potential of the deal.
Upon completion, Capital One shareholders will possess approximately 60% ownership of the consolidated entity, with Discover shareholders owning the remaining stake.
The acquisition is expected to yield significant synergies, generating $2.7 billion in pretax benefits.
The strategic rationale behind the acquisition underscores the increasing importance of scale and technological capabilities in the financial sector.
By leveraging Discover’s extensive network and Capital One’s expertise, the combined entity aims to drive innovation and enhance value for customers in an ever-evolving market landscape.
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