…as shareholders call for sustainability
Following signs of recovery shown by the Nigerian economy, five quoted companies, across different sub-sectors, on the Nigerian Stock Exchange have increased their total assets by over N58 billion. The assets rose from N720.533billion as at September 2016, to N778.83billion by the end of September 2017.
The companies are Oando Nigeria Plc, MCNicholas Plc, Med-View Airline Plc, CWG Plc, and E-Tranzact International Plc.
For instance, Oando’s financial statements showed that the oil firm recorded N221.5bn total assets for the month ended September 2017, against N208.27bn, which was reported within the same period in 2016.
MCNicholas also reported N515.8bn total assets at the end of the third quarter of 2017, up from N475.14billion, which was recorded at the same period in 2016.
In the case of Med-view Airline, its total assets for the third quarter ended September 2017 stood at N18.26billion, against N15.43billion reported at the comparative period of 2016. Also, CWG Plc’s total assets rose from N14.76billion in 2016 to N15.08billion at the end of Q3 2017. As for E-Tranzact International, it reported N6.91billion assets in 2016, which rose to N7.42billion in Q3, 2017.
The Q3 2017 corporate results of the companies, according to capital market operators, confirm recent macroeconomic performance indicators, which are all in positive territories.
The growth in the companies’ fortune, especially in terms of asset base, also confirmed the expansion in economic activities as reflected in the Central Bank of Nigeria’s Purchasing Managers Index, which has been robust for six consecutive months, up to September, 2017.
September manufacturing sector PMI also increased from 55 per cent as at August, 2017, to 55.3 per cent; while the non-manufacturing sector’s composite PMI leapt up from 53.4 per cent to 55.4 per cent.
The Managing Director, High Cap Securities Plc, Mr. David Adonri, explained that the Q3 results of the firms contributed to the recent signs of rebound witnessed in the market.
He said, “Several Q3 results are impressive and outperformed previous quarters since economic indicators have largely been positive. The positive asset base recorded by those companies is also as a result of their prudent business strategy.
“The business environment has become more conducive, especially for banks and blue-chip companies, to recommence import finance and other short-term projects. The agriculture sector will also continue its impressive run since their protection by the apex bank is still in force. Manufacturing has also improved, due to availability of hard currency to import raw materials.”
The National Coordinator, Constance Shareholders Association of Nigeria, Mr. Shehu Mikhail, said, “They are just working to make sure the tempo of good corporate earnings is sustained in order to avoid business shutdown. Any reasonable investor would only be praying for consistency of result till the end of the year before he sells, after dividend payout.”
Mikhail called on the government to create friendly policies that would elicit public trust and further boost profitability of the companies, especially in the last quarter of the year.
“The companies that have reported positive asset base should be able to sustain it even in the next quarter. Other companies that sustained losses in their total asset should re-strategise for profitability,” he added.
“All this will depend on government approach to the economy, which includes friendly approach to all the listed companies, by creating an understandable committee that would understand the companies’ problems for better investment,” he said.
The Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, commended the companies for their positive asset base.
He said, “But they must strive for sustainability. Generally, I don’t expect fantastic performance for these companies in the last quarter. The economy is still on the path of recovery. Some companies will do better than others, especially the banks, at the end of the fourth quarter.”
Commenting on the results, the Group Chief Executive, Oando Plc, Mr. Wale Tinubu, attributed the firm’s Q3 financials to the continued implementation of its strategic initiatives of growth through its dollar earning upstream portfolio; deleveraged through recapitalisation, asset divestments and the expansion of its oil export trading
business.
Tinubu said the proceeds from Oando’s business restructuring and asset sales had been successfully used to improve total assets and balance sheet with a reduction of N18 billion in its debt position, from N247 billion as at December 2016 to N229 billion in
2017.
“After five consecutive quarters of contraction, Nigeria’s official exit from the recession, buoyed by improved performance in the oil, agriculture, manufacturing and trade sectors of the economy, is laudable news,” he said.
Tinubu added that the continued increase in oil price to $58 per barrel as last recorded in September 2017, coupled with the ongoing peace efforts in the Niger Delta, had significantly impacted on the companies’ fourth successive profit declaration, including its total
assets.
Reacting, the Managing Director, Med-view Airline Plc, Alhaji Muneer Bankole, explained that the company’s growth in the aviation industry had continued with accelerated efforts and had stood the company out significantly among its
contemporaries.
According to him, the company has continued to soar higher. From a maiden flight in 2007 for Hajj operation, the airline, he noted, has been able to spread to conduct flights to various parts of the world, covering domestic, regional and international operations, thereby impacting on its total
asset base.
On e-Tranzact, its Chief Financial Officer, Mr. Niyi Toluwalope, said, “We will ensure we maximise the value of our shareholders and stakeholders. We will continue to invest in our core infrastructure, to position the company for the expanding opportunities within the sector, and to ensure that our asset base and other positive indicators are sustained.
“In 2016, eTranzact completed its strategic rebranding; making key changes to its brand identity, vision, mission and
products.”
