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Royal Exchange Plc forecasts N500.83 million PAT in Q1 2021

Royal Exchange has projected a 244% rise in its Profit After Tax for the first quarter of 2021.

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Royal Exchange Plc has projected a rise in its Profit after Tax (PAT) to N500.83 million for the first quarter of 2021 (Q1, 2021), indicating a 244% increase from the figures recorded in Q3 2020.

This is according to the latest earnings forecast of the firm, signed by the Chief Financial Officer of the firm, Olalekan Jayeola, and sent to the Nigerian Stock Exchange market.

Key highlights of the earnings forecast of Q1 2021

  • Pre-tax profit is projected at N736.5million, +244% Q-o-Q.
  • Gross Written Premium is expected to hit N4.75 billion, +95% Q-o-Q.
  • Net premium is projected to decline to N1.7 billion, -19.1% Q-o-Q.
  • Fees and commission income is projected to decline to N141.2 million, -25% Q-o-Q.
  • Investment income is projected to increase to N475.51 million, +3.3% Q-o-Q.
  • Total underwriting expenses is projected to decline to N1.3 billion, -40.5% Q-o-Q.
  • Total underwriting profit is projected to increase to N567.4 million, +299.4% Q-o-Q.
  • Total operating expenses is projected to decline to N494.1 million, -5.7% Q-o-Q.

Key aLittlessumptions

In preparing the forecast, some assumptions were made including;

  • The premium income budget for the year is zero based.
  • Reinsurance is projected at 27% of Gross Written Premium.
  • Fees and Commission income was forecasted at 11% of reinsurance expense.
  • Claims expense of N514Million is estimated not to exceed 30% of Net Premium Income.
  • Underwriting expenses of N685Million is forecasted not to exceed 40% of Net Premium Income.
  • Management expenses of N479million are estimated not to exceed 30% of Net Premium Income.
  • The Inflation rate was projected at 14% as the worst case scenario.
  • The exchange rate of N385 to a dollar was assumed.
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Companies

Dangote Sugar proposes N18.2 billion as final dividend for 2020

Dangote Sugar Refinery Plc has proposed a sum of N18.2 billion as the final dividend for shareholders.

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The Board of Directors of Nigeria, Dangote Sugar Refinery Plc has proposed a sum of N18.2 billion as the final dividend for shareholders for the period ended 31st December 2020.

This announcement was contained in the audited financial statement of the leading integrated sugar company.

In line with the statement of the Board of DSR, the approval of this proposed dividend at the forthcoming Annual General Meeting will see Dangote Sugar pay out a final dividend of N1.50 for each of the outstanding 12,146,878,241 ordinary shares of the company, held by its shareholders.

The proposed dividend is 36.36% higher than the final dividend of N1.1 per share (N13.36 billion) the sugar company paid its shareholders in 2019.

What you should know

  • Dangote Sugar Refinery declared in its audited statement for the period ended 31st December 2020 that its profit for the year climbed to N29.8 billion, from N22.4 billion in 2019.
  • According to these figures, DSR’s earnings per share for 2020 are pegged at N2.45. Hence, with a dividend of N1.50 per share, Dangote Sugar is set to payout 61.2% of its profits for 2020.
  • At the close of trading activities on the floor of the Nigerian Stock Exchange today, shares in Dangote Sugar Refinery declined by 0.83% to close lower at N17.85.
  • At this price, the dividend yield of Dangote Sugar shares is 8.40%.
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Companies

MTN Nigeria declares largest ever revenue by a listed Nigerian entity for FY 2020

The strong revenue growth was basically due to its data-led segment as sales from the segment expanded by an impressive 51.5% Year to Year.

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MTN Nigeria recently announced another ground-breaking full-year turnover in the financial year of 2020, the highest ever recorded by a Nigerian listed entity.

Specifically, the telecom giant’s revenue expanded by 15.1% year-to-year to N1.3 trillion in the review period. The strong revenue growth was basically due to its data-led segment as sales from the segment expanded by an impressive 51.5% Year to Year.

  • Voice sales rose relatively by 5.6% year to year as the global switch to data-enabled communication subsisted.
  • MTN Nigeria Plc also announced a N5.90/share final dividend on impressive growth in its free Cash Flow for the financial year of 2020.
  • Notably, MTNN’s 4G network now covers 60.1% of the population compared to 43.8% in 2019.
  • According to MTN Nigeria, the suspension of new SIM registration enforced in mid-December did not have a material effect on the voice segment, which managed a 10.6% YoY revenue growth in Q4’20 (vs 7.0% YoY in Q3’20).

In contrast, data revenue growth notably moderated to 37.5% YoY in Q4’20 compared to 55.5% YoY in Q3’20.

In a research report released by CardinalStone, the most valuable telecom company’s margin was adversely affected by currency devaluation;

“Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” the report stated.

The company’s margin was also negatively affected by the higher cost of borrowing and the ultra-low rates prevailing at Nigeria’s debt market;

“Net finance cost increased by 25.4% YoY on the impact of higher borrowings and lower interest on investment in government securities.

“Borrowings rose by over 26.3% to N521.2 billion in FY’20, after the company notably issued its N100 billion Commercial paper in June 2020. The effect of higher borrowings combined with a tax increase (a consequence of lower investment allowance and exempt income) to keep after-tax profit growth subdued at 0.9% YoY.”

That being said, in spite of its impressive growth in revenue the Stock was trailing by 3.28% trading at N174 per share.

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Companies

Nestle declares N28.1 billion as final dividend for 2020

The Board of Nestle Nigeria Plc has announced the payment of N28.1 billion to its shareholders as the final dividend for 2020.

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The Board of leading consumer goods company, Nestle Nigeria Plc, has announced the payment of N28.1 billion to its shareholders as the final dividend for the period ended 31st December 2020.

According to the announcement published by the company on the website of the Nigerian Stock Exchange, Nestle is expected to pay a final dividend of N35.50 per share for all the outstanding 792,656,252 ordinary shares of the company.

This brings the total dividend payout to qualifying shareholders to N28.14 billion.

The final dividend, however, will be paid electronically to shareholders on the 23rd of June, 2021, subject to appropriate withholding tax and approval at the Company’s Annual General Meeting.

Other key conditions outlined by the company for qualifying shareholders include:

  • Shareholders whose names appear on the registrar of members as of 21st of May, 2021 will be considered.
  • Qualifying Shareholders must have completed the e-dividend registration and must have mandated the Registrar (Greenwich Registrars) to pay their dividends directly into their bank accounts.
  • In line with this, the register of shareholders will be closed from 24th of May to 28th May 2021, to enable the registrar to process the dividends of Nestle’s shareholders.

In case you missed it

  • Nestle paid an Interim dividend of N25 per share to shareholders towards the end of 2020.
  • It is important to note that the addition of this to the final dividend of N35.5, puts Nestle’s total dividend for 2020 at N60.5 per share. This is 13.57% lower than the total dividend payout for 2019 (N70 per share).

What you should know

  • Nestle declared in its audited financial statement for 2020, that it made a profit before income tax of N60.6 billion in 2020. Indicating a decline of 14.74%, when compared with 2019 figures.
  • The company’s earnings per share (EPS) during the period under review was N49.47, 14.16% lower than 2019 EPS.
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