A director at Nigerian Breweries bought 2,250,000 shares at 41.300NGN and the significance rating of the trade was 69/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years...
Dangote Sugar Refinery released its Q1’23 Earnings results, delivering topline growth of 8% y/y to ₦102.2 billion. In the Q1 period, the National Sugar Development Committee (NSDC) reported that wholesale sugar prices per tonne rose 36% higher y/y which supported sugar revenue for the industry. By geography, higher growth stemmed from Lagos operations, growing 15% y/y and contributing 40% to revenue. On the Opex front, while selling expenses declined by 33%, admin expenses increased b...
Earnings surprise on gross margin volatility "In its unaudited FY’22 financial statements, Unilever Nigeria PLC reversed the weak earnings reported in the 9M period (a loss of ₦0.3 billion). Bottom-line improved 4x to ₦5.9 billion in FY’22, bucking our expectation of suppressed profitability. Although Q4 topline printed at ₦23.9 billion, in line with our projection of ₦23.4 billion, the company contradicted our Q4 profit estimate, reporting PAT of ₦6.4 billion (Vetiva: ₦0.7 billion), the...
Slow Q3 Performance Couldn’t Stop the Shine The overall trajectory of NB remains solid, evidenced by the 27.2% YoY rise in Revenue performance. We observed some level of adjustments in prices since the beginning of Q2, but the juries are still out on the volume component of the revenue data. The revenue direction was instrumental to improved gross and operating margin position as of 9M 2022. Nonetheless, the three months ending September 2022 were clogs in the firm’s operational performance wh...
Driven by 30% and 24% y/y increases in its Food and Beverage segments respectively, Nestle Nigeria PLC’s 9M earnings showed a 27% rise in Revenue to ₦333.5 billion (Vetiva: ₦331.4 billion), with bottom line printing at ₦40.2 billion (+20% y/y). The company has declared an interim dividend of ₦25.00 per share (9M’21: ₦25.50), which translates to a dividend yield of 2% at current market valuation. However, despite the sturdy pricing maintained, gross margin declined by 4ppts y/y, worse...
Consolidating on its Q1’22 performance, Nigerian Breweries’ half year earnings revealed a 143% y/y growth in bottom line to ₦18.7 billion (Vetiva: ₦22.8 billion), driven by a 77x q/q improvement in its Q2’22 PAT. This has resulted in a half year EPS of ₦2.32, compared to ₦0.96 in H1’22 and consistent with NB’s 100% dividend policy raises the half-year expected dividend payout to ₦2.32 per share. Q2 solidifies performance trajectoryDespite the stronger pricing implemented across board...
In the first quarter of the year, NB reported significant improvement in its performance, with topline and bottom-line expanding by 30% y/y and 78% y/y respectively. We believe that the growth in the beer maker’s Revenue came down to a mix of volume and price increases. The Malt segment, which has been gaining traction industry-wide may be responsible for the growth in turnover. Still, we recall that management indicated (as at FY’21) the success of its push for increased volumes from its ...
In its Q1’22 earnings release, Unilever Nigeria reported a 6% y/y upswing in Revenue to ₦20.6 billion, driven by growth in both the Food (+26% y/y) and Home & Personal Care (+23% y/y) businesses. We recall our expectation that the disposal of the tea business would lead to a decline in Revenues, at least for a few quarters, with a subsequent normalization in volumes. Accordingly, the performance of the food segment (which has been restated to reflect this sale), came in line with our proje...
A director at Uac Of Nigeria Plc bought 10,000,000 shares at 11.650NGN and the significance rating of the trade was 75/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two year...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
According to data from the National Sugar Development Council (NSDC), sugar prices averaged ₦19,108 per 50kg bag, representing a 32% y/y surge. This was evident in Dangote Sugar Refinery’s Q1’21 Financial Statements, where it showed a 41% y/y jump in Revenue to ₦67.4 billion (Vetiva: ₦52.7 billion). Suppressed importation boosts sugar volumes Whilst the increase in sugar prices was partly responsible, we believe that topline growth was also driven by a boost to sales volume. Thus, af...
We resume coverage of Nestlé Nigeria Plc – Nigeria’s leading fast-moving consumer goods (FMCG) company – with a target price of NGN1,404 (previously NGN1,460) and a Hold recommendation. Nestlé’s broad product portfolio across the food and beverage segments continues to underpin the company’s appeal to investors, which supports the NGN1tn market cap. This makes it the most valuable FMCG company and the fifth-largest company on the Nigeria stock exchange. In addition, Nestle’s policy of returni...
Growth continues strong Dangote Sugar Refinery’s Q420 revenue of N53.78 billion was a decline from Q320’s N57.28 billion (-6%QoQ) but still represented a strong growth of 23% when compared to Q419 (N43.66 billion). DSR’s cost of sales declined, for the first time since Q119, by 0.6%YoY which is impressive in the midst of a double-digit inflation and a currency depreciation. Gross profit more than doubled to N19.6 billion on the back of higher revenue and declining costs while operating profi...
A feeling of deja vu If Nestle’s topline performance in Q420 had you feeling like you had seen this story before, it’s probably because you have! Revenue grew on a YoY basis for the second consecutive quarter, this time by 2.3% to N74.35 billion. But, just like Q320, costs grew faster than revenue at a rate of 10.6%YoY which led gross profit down by 8.3%YoY to N29.19 billion. Also similar to Q320 was a fall in OPEX (-9.8%YoY) which was not enough to stop EBIT from declining (-6.7%YoY to N14.2...
A disappointing end to the year Similar to what we saw in Q320, Nigerian Breweries (NB) recorded a strong YoY growth of 18% in their revenue which printed at N103 billion over Q420. However, cost of sales grew by an astonishing 42% which dragged gross profit down by 18%YoY to N28.74 billion. Despite a 14%YoY fall in OPEX, the sharp increase in cost of sales meant that EBIT fell 30%YoY to N7.11 billion. Higher finance costs led net finance expense higher by 67%YoY which in turn helped bring PB...
Nestle Nigeria recently released its half year results, reporting a flat topline performance in Q2’20 versus Q2’19, albeit 0.6% higher than our estimate. Revenue came in at ₦70.3 billion in the quarter, taking H1’20 Revenue to ₦141.0 billion, also flat compared to the previous year. While food revenue continued to underperform this year (-2.5% y/y to ₦86.0 billion in H1’20), the revenue growth in beverages (+2.5% y/y to ₦55.0 billion) acted as a buffer, likely boosted by Ramadan demand i...
In the summer of 2015, I met Prof. Ed Altman at a lecture in New York. He devised the Altman Z-score in 1968 and first published his formula 50 years ago, after doggedly sifting through thousands of pages of annual reports to obtain the data for his analysis. The Altman Z-score became the gold standard for bankruptcy analysis. The Altman Z-score is a formula for determining whether a company is headed for bankruptcy. It takes into account profitability, leverage, liquidity, solvency, and acti...
On Saturday, the Organization of the Petroleum Exporting Countries (OPEC) and Russia agreed to extend 10% oil output cuts until the end of July. This amounts to an ongoing cut of 9.7mn barrels a day. Oil prices have continued their recovery after the deal was announced, but the output cuts will also add fuel to the fledging food price boom, putting upward pressure on food prices at a time of intense dislocation of food supply. The implications of the recovery in oil prices for the food indust...
The sleepy IPO market just received an espresso shot. Amidst the doom and gloom, JDE Peet's raised US$2.5bn last week, in Europe's biggest IPO since 2018. It was also the first major listing that was conducted entirely in the brave new world of Zoom calls. The deal is extraordinary in that Covid-19 did not dent its prospects. On the contrary, the issuers actually rushed the deal forward to benefit from the post-March stock market rally. The IPO process was reduced from four weeks to 10 days d...
When the history of Covid-19 is written, it may be recorded as the Zoom era. The videoconference provider has spread as rapidly as the virus. It’s users have risen 30 fold from just 10 million in December 2019 to almost 300 million in April 2020. Like Google and Xerox, Zoom is a now used as verb. [-eu-west-1.amazonaws.com/exotix-content-uploads/jlKmZltrPwcxUPXecrBTnY2SQyGGyhy1WJBMI30I.png] Investors are clamouring for exposure to Zoom and its videoconferencing peers, such as Cisco W...
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