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Guinness Nigeria Declares N5.5bn Profit, N3.3bn Dividend

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A leading beverage alcohol firm in Nigeria Guinness Nigeria, recently announced a profit after tax (PAT) of N5.483 billion for the year ended June 30, 2019, compared with N6.718 billion. The profit was actualized from a revenue of N131.498 billion as against N142.975 billion in 2018.

Net financing income fell from N3.443 billion to N1.862 billion, while profit before tax (PBT) was N7.103 billion, down from N9.943 billion in 2018. The board of directors has recommended a dividend of N3.329 billion.

Commenting on the result, the Managing Director, Guinness Nigeria Plc, Mr. Baker Magunda, stated that the company would continue to work on all operating indices while expecting that the micro and macroeconomic parameters improve.

Magunda mentioned that: “Revenue for the year declined 8% compared to same period last year on the backdrop of an extremely challenging macroeconomic and competitive environment. The cost of the increase in excise duty at a time of stagnant consumer disposable income had to be absorbed by industry players. Despite the tough competitive landscape, we continue to see good growth performance from Guinness, Spirits and the malt drinks.”

According to him, a combination of factors, inflation plus prior year royalties and accruals not approved by NOTAP, led to a 17 per cent decline in gross profit for the organisation.

Magunda explained that “Marketing spend reduction by 16 per cent and distribution costs initiatives partly mitigated the gross profit decline, thus leading to a fall in operating profit by N4.4 billion. Profit before tax decreased by N2.8 billion as a 46 per cent reduction in net finance costs further helped to cushion the decline in operating profit,”

Also speaking on the performance, Chairman of the company, Mr. Babatunde Savage, said: “As a board, we are confident that our strategy is sound, and that we are making the right investments in the company to ensure our long-term competitiveness. The Board will continue to support the management in its efforts to build a business that aims to consistently deliver growth for stakeholders.”

The company noted that despite the challenges, it continues to fulfill its commitment to stakeholders particularly as it drives its renewable energy and water recovery project for sustainable environment.

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Auditing

Bidvest Bank trading profit rises 3.5% to R6.7bn

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The Commercial bank in the Republic of South Africa trading, distribution and services group Bidvest said recently its trading profit for the year ended June 30 rose 3.5 percent to R6.7 billion despite flat revenue.

Headline earnings per share were up 9.8 percent to 1,352.1 cents and the company said exceptional cost and capital discipline as well as improved margins were highlights against a volatile trading backdrop.

The CEO Bidvest Bank Lindsay Ralphs said, “There has been a strong focus on our clients, on solutions, innovation, wholesaling the right product at the appropriate price point as well as bolt-on acquisitions in the services and office & print divisions, which has culminated in acceptable growth.”

The group declared a final cash dividend of 318 cents per share, bringing the total dividend for the year to 600 cents, up 7.9 percent from last year.

Strong profitability gains were achieved at Adcock Ingram while Comair recognised the successful claim awarded against South African Airways, which increased Bidvest’s share of profits from these associated companies.

Bidvest said its diverse portfolio of businesses and extensive reach allowed it to weather challenging times.

“Our basic-need services and everyday essential product ranges enable us to support and add value to all our stakeholders. Innovation to disrupt ourselves, and the industries in which we operate, remains a core focus alongside disciplined asset management and cost control,” Ralphs added.

 

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Zenith Bank grows profit to N111.7bn, in H1’19

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Nigeria’s leading financial service Zenith Bank Plc has announced profit before tax (PBT) of N111.7billion and proposed interim dividend of 30 kobo per share for the half-year ended June 2019 (H1’19).

This was disclosed by the bank in its audited financial results for H1’19 released recently which showed improved performance in key financial indicators.

In a statement announcing the results, the bank said: “Gross earnings grew by three percent from ¦ 322.2 billion to ¦ 331.6 billion driven by a significant growth of 24 percent (YoY) in non-interest income from ¦ 88.6 billion in H1 2018 to ¦ 109.7 billion in H1 2019.”

It further said: “In particular, fees from electronic products increased by ¦ 17 billion (168 percent) from ¦ 10 billion in H1 2018 to ¦ 27 billion in H1 2019, demonstrating significant progress in our retail banking initiatives.”

“This top-line growth filtered through to the bottom-line as Profit Before Tax (PBT) increased to¦ 111.7 billion reflecting a four percent growth over ¦ 107.4 billion reported in H1 2018 with earnings per share (EPS) increasing by nine percent to ¦ 2.83 in H1 2019 from ¦ 2.60 compared to the prior period.” It added.

 

 

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Guaranty Trust Bank declares audits results in H1 2019

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The leading financial Institution Guaranty Trust Bank recently released its audited H1-19 results, which was generally in line with our expectations of gross earnings pressure but improved profitability.

Positively, the bank, which was seemingly in breach of the new statutory limit for LDR of 60.0% as at Q1-19, is no longer in breach given the new weightings for the Retail and SME segments in the calculation of the ratio. Finally, the bank proposed an interim dividend of NGN0.30/share, which translates to a yield of 1.17% based on the closing price on the 15th of August 2019 (NGN25.75).

Gross earnings growth came in lower by 2.09% y/y, which was expected, as interest income declined (7.96% y/y) due to weaker income from both loans to customers (-9.97% y/y) and investment securities (-7.74% y/y). However, the decline in interest expense (-25.8% y/y) partly cushioned the impact of weaker interest income and resulted in net interest income declining marginally by 1.33% y/y. We highlight that the decline in interest expense was due to a moderation of 22.68% in the cost of deposits from customers.

Non-interest income growth settled at +12.91% y/y, which is running ahead of our FY-19 estimate of 10.25% y/y. This strong growth was supported by fees and commission income growth of 30.63% y/y. Also, as expected, FX trading income has been weak in the year and is expected to remain so.

Interestingly, operating expenses growth was muted, settling higher at 0.43% y/y. This, is despite the moderate increase in regulatory costs (AMCON levy: +9.65% y/y), as the bank managed other ancillary costs to maintain its cost-to-income ratio at its industry-best level of 37.63% (H1-18: 38.82%).

Consequent on the income recorded, and the growth in expenses, the bank recorded growth in PBT of 5.61% y/y, while PAT settled 3.72% higher y/y following an 18.53% y/y increase in income tax expense. The current run-rate for PAT implies a 6.66% y/y expansion, relative to our estimate of 3.70% y/y.

Finally, while a comprehensive document regarding macro-prudential ratios is yet to be provided, we assessed the bank’s numbers in the light of the new minimum LDR ratio of 60.0%. Given the proportion of Retail and SME loans in the bank’s assets of 18.0% and 4.5% (previously 24.3% and 5.9%), the LDR for the bank settled at 61.92% for H1-19, which means that the bank is not in breach

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