16 Mar

Daily Watch – Buhari brings fertilizer tidings, Crude numbers fall

  • Nigeria, which again lost its Africa’s top oil producer status to Angola in January, has recorded further decline in its crude oil production, a new OPEC report indicates. OPEC, in its Monthly Oil Market Report for March 2017, put crude oil production from Nigeria at 1.526 million barrels per day in February, down from 1.533 million bpd in the previous month, based on direct communication. Production from Angola stood at 1.649 million bpd in February, up from the 1.615 million bpd recorded in January. OPEC, which uses secondary sources to monitor its oil output, but also publishes a table of figures submitted by its member countries, said the group’s total production in February averaged 31.96 million bpd, showing a decrease of 14,000 bpd over the previous month. It said, according to secondary sources, crude oil output increased the most in Nigeria in February, while production in Saudi Arabia, Iraq, United Arab Emirates and Angola showed the largest declines. Secondary sources put Nigeria’s output at 1.608 million bpd, while Angola was said to have produced 1.641 million bpd. The number of active oil rigs in Nigeria, which had continued to decline in recent months, however, rose to 26 in February, latest data from Baker Hughes and OPEC showed. The country’s rig count stood at a low of 23 in December last year, down from 38 in January 2015.
  • President Muhammadu Buhari has approved the payment of the outstanding ₦22 billion earmarked for dealers of agricultural inputs, popularly known as agro-dealers, in order to ensure the seamless distribution of fertiliser at an approved rate of ₦5,500 for 50kg. Earlier this year, Agriculture and Rural Development minister, Audu Ogbeh, announced that the FG was working out measures that would lead to the crash in the price of fertiliser by 50 percent. Farmers across the country have often complained of the high cost of fertiliser.  A 50kg bag is currently being sold for between ₦10,000 and ₦12,000, and accessing the commodity is a serious challenge.
  • Ecobank expects its new digital banking platform to help to boost its customer base across the continent to 100 million from 13 million by 2020, it said after announcing that it had signed up 1.5 million personal accounts through the mobile app. Ecobank has operations in nearly 40 African nations, some of which have been pressured by the commodity price slide and unfavourable currency swings that have prompted the bank to strengthen its focus on the relatively stable consumer market. “We have brought financial services to the mobile phone … to have an instant account, payment and receipt across Africa,” Ecobank’s head of consumer banking Patrick Akinwunta said on Wednesday, adding that digital operations will also reduce the company’s cost base. Shares in the bank were down 2 percent on Wednesday at ₦9.80, having shed 2.7 percent so far this year. The shares fell by 39 percent in 2016 after a drop in nine-month pretax profit to $281 million in October from $398 million a year earlier.
  • Guinness Nigeria said on Wednesday it had applied to the Nigerian Stock Exchange to get approval for a share sale to raise ₦39.7 billion ($130 million), its chief executive told Reuters. The company, the local division of the world’s leading spirit maker Diageo, said it would issue the shares to existing shareholders at ₦58 each, a 21 percent discount to Wednesday’s market price. Shareholders would be offered five new shares for every 11 held. The company, which is 54 percent owned by Diageo, reported in September last year a pretax loss of ₦2.35 billion for the year ended June 30, its first annual loss in 30 years, triggering the share sale. Shareholders approved the sale in January. “Our expectation is that this rights issue will help mitigate the impact of increasing finance costs, optimise our balance sheet and improve the company’s financial flexibility,” Peter Ndegwa, chief executive Guinness Nigeria, said. “We expect that this issue will help us … return the company to profitability in the long term,” he said. Guinness Nigeria shares, which have fallen 18 percent so far this year, rose 2.9 percent to ₦70 on the Lagos bourse on Wednesday. The stock fell 31 percent last year.
  • Transcorp Hotels recorded an increase in profit after tax from ₦3.6 billion in 2015 to ₦3.7 billion in the 2016 financial year. According to the Chairman, O’tega Emerhor, while the restriction on access to foreign exchange had an unfavourable multiplier effect on the cost of goods and services in the country, the company was able to survive the biting hardship through doggedness and efficient service delivery. He said the company’s ₦14.6 billion turnover for the 2016 financial period surpassed the ₦13.4 billion recorded in 2015 by nine percent. He said as a result of the improved financial performance, the board of directors recommended that a dividend of 40 kobo per share be paid to the shareholders for the 2016 financial year. “Our shareholders will be glad to know that we are recommending a final dividend of 40 kobo per share and we are confident that as the company makes progress, we will continue to meet your expectations,” he declared.