Fifteen listed companies on the Nigerian Stock Exchange (NSE) have posted N596.637 billion profit after tax (PAT) for the financial year ended December 31, 2017.
This indicated an increase of 67.34 per cent when compared with the 15 companies profit after tax of N356.548 billion declared in the corresponding period of 2016. The results released so far from different sector in NSE showed significant improvement, beating analysts and operators’ expectations.
The NSE has tagged Nigerian Breweries, Transcorp Hotel, Total Nigeria, Africa Prudential, United Capital and Seplat as early filers for their audited financial statements which were submitted at least four weeks before the due date.
Other companies with their results released on the NSE are: Nestle Nigeria, Med-View Airline, Austin Laz, Nascon and Allied Industries, Stanbic IBTC, Guaranty Trust Bnak, Zenith Bank, Cadbury Nigeria and Julius Berger
A review of the 15 companies’ performance showed that the three banks that have turned in their results accounted for a whopping 70.77 percent of the total net profit recorded. The banks are: Zenith Bank that recorded N203.46 billion profit, Guaranty Trust Bank, posted N170.476 billion profit, and Stanbic IBTC Plc with N48.3 billion profit.
Also, out of the 15 companies, 12 had declared dividend for the period, for example, Zenith Bank and Guaranty Trust Bank declared a total dividend payout of N2.70 per share each, Stanbic IBTC to pay dividend of N1.10 per share, while Nigerian Breweries, Nascon, United Capital and African Prudential to pay dividend of N3.13, N1.50, 35 kobo and 40 kobo per share in that order, among others.
As at March 19, 2018, 14 companies have submitted their audited result ended December 31, 2017, out 140 companies expected to submit their audited results before the end of business on March 31, 2018. While market operators expected the momentum of submission of the results to be high between now and the end of the month, since compliance within deadline is generally regarded as a measure of good corporate governance.
Analysts attributed the improved performance to the nation’s economy emerging stronger and stability in the foreign exchange. The Nigerian economy exited recession by second quarter of 2017 after five consecutive quarters of contractions.
The recovery was driven largely by growth in international crude oil prices which traded at all-time high of $52.4 per barrel by close of December 31, 2017 and growth of the agricultural, manufacturing trade sectors. Inflation dropped by 282 basis points from 18.72 per cent in January to 15.9 percentage in November 2017, while the exchange rate also stabilised with the naira exchanging with dollars at average of N360 per dollar.
Despite these impressive corporate earning the stock market is yet to rebound positively to the result as the market record a month-to-date decline of 3.43 per cent as at March 19, 2018.
Speaking, managing director, Sofunix Investment Communications Limited and a stockbroker stated, “The expectation from full year corporate earnings is a mixed grill. We cannot expect a unified performance as companies operate in different sectors of the economy with peculiar risk and reward characteristics. But one can conjecture that many companies were struggling to survive at the peak of Foreign Exchange, forex, crisis in larger part of last year until the Central Bank of Nigeria, CBN, intervened.”
Managing director/CEO, APT Securities and Funds Limited, Mallam Kasimu Kurfi, said: “Zenith Bank declared a total dividend of N2.75, and GTBank declared a total dividend of N2.70 per share, this is a significant improvement in their respective payment of the dividend and we expect the same improvement in the other banks results. This is a reflection of improvement in their performance and the economy in general.”
According to him, the CBN directive in the payment of dividend by banks has been in existence since 2014 and is not new to the financial system. “We expect companies to repeat same or even perform better in 2018. However, we are not expecting banks to repeat same because already the treasury bills have started falling and by the time Monetary Policy Committee, (MPC) members are cleared by Senate; they may hold their meeting this month and we expect them to bring the Monetary Policy Rate (MPR) down from 14 percent and same with other monetary policy,” Kurfi said.
Also, the managing director/CEO, Dependable Securities Limited, Chinenye Anyanwu said the results released so far are impressive compared to previous year. He noted that no companies that have released results so far have gone below expectation, saying “but the only difference is that we have not seen commensurate reaction from investors.” He highlighted that the share prices of banks like Zenith Bank have no reason to be dropping after such a good result.
The managing director of Highcap Securities Limited, Mr. David Adonri stated that the companies have performed impressively. Adonri noted that as the day’s progress and more results tumble onto the floor of the NSE, investors may begin to achieve a more stable attitude towards the market as the grey shadows that masked their earlier smiles give way to laughter.