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Dangote Cement, GTB, Zenith, 62 Others Declare N233B Profit In Q1

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BY OLUSHOLA BELLO, Lagos

…Performance beyond expectation, say analysts

angote Cement, Guaranty Trust Bank, Zenith Bank and other 62 companies listed on the Nigerian Stock Exchange (NSE) declared a profit after tax of N232.544 billion in the first quarter of 2017.
A survey of these 65 quoted companies revealed a total profit after tax of N232.544 billion in the period under review, representing a 25.03 percent, compared to N185.997 billion in the same period in 2016
Capital market analysts said the performance came in stronger than they expected due to the improvement in business environment.
The rules require quoted companies to submit interim report not later than 30 calendar days after the end of the quarter in accordance with Appendix iii of the Listing Rules. As at May 18, 2017, 65 companies have released their first quarter results, representing 36 percent out of 180 companies that have their first quarter ended March 31, 2017.
A review of some of the results showed that Dangote Cement posted a profit after tax of N70.572 billion from N52.779 billion in Q1, 2016, Guaranty Trust Bank profit went up by 62 percent to N41.477 billion and Zenith Bank appreciated by 41 percent to N34.499 billion.
Eterna Oil’s profit after tax grew by 134 percent, Unilever declared a growth of 53.8 percent in its profit, while Africa Prudential’ profit rose by 107.03 percent in first quarter, 2017.
Analysts believe that the improvements recorded in some of these companies reaffirmed the fact that the economy is on the path to recovery.
They attributed it to rebound in cyclical anchors of the business cycle, oil production and prices, improvement in forex liquidity and increase in fiscal revenue and recent actions taken to ease condition of doing business for SMEs.
Having started on a strong footing in first quarter, 2017 with revenue and profit growth, analysts expect the companies to further deliver an improvement in financial performance in the coming quarters, saying the rest of the year may offer even more room for upward movement in earnings.
The chief operating officer of InvestData Limited, Mr. Ambrose Omordion said the effect of the new foreign exchange policy of the Central Bank of Nigeria (CBN), as shown in the series of recent interventions to meet the needs in the various segments of the forex market had benefited the manufacturing sector and helped reduce operating cost, especially importation, thereby boosting productivity.
Omordion said the CBN’s intervention in the forex market and the establishment of the Industrial Development Council by the government to drive industrialisation would boost productivity and give incentives to manufacturing companies by way of tax cuts, among others.
“Also, faithful implementation of the Federal Government’s four-year economic recovery growth plan (ERGP), is expected to further boost recovery and return the country to the path of growth and prosperity again. A special stimulus package for manufacturing sector is underway in the form of special funds with low interest, special tax system for the sector which would likely be in form of tax holiday to enhance productivity and output. Also, we expected mild recovery in the purchasing power of Nigerians going forward which will support sales revenue of manufacturing company,” he pointed out.
Also, the managing director of Highcap Securities Limited said the depressed state of the Nigerian economy over the last two years had been broadly reflected in the companies’ result and capital market activities.
He noted that foreign investors’ appetite for Nigerian assets had waned significantly on the back of currency crisis which in turn had fundamentally weakened macroeconomic performance, dragged corporate earnings and also impacted on equities market viability.
He however said the recovery seemed to be coming on the back of the recent increase in crude oil price, the increase in crude oil production in Nigeria and the Central Bank of Nigeria’s (CBN) continued supply of foreign exchange to both retail and corporate users.
According to Adnori, the expectation is that the current improvement in the macroeconomic environment and the efforts of various stakeholders to promote made-in-Nigeria goods should stimulate economic activity in the short to medium-term.
The Central Bank of Nigeria’s (CBN) Purchasing Managers’ Index Report for April, with data showed an upturn in manufacturing activity in the first month of the new quarter. Buoyed by knock-on effects of the significant improvement in fiscal balance and the forex market, particularly related to forex liquidity, April manufacturing PMI expanded to 51.1 points relative to 47.7 points in March 2017 after three consecutive months of contraction, settling in the positive region for the first time in 2017.
Analysts said the improvements recorded in the manufacturing and non-manufacturing sectors reaffirmed the fact that the economy is on the path to recovery in the second quarter, as other macroeconomic indicators also suggest.





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