Tuesday 06 March 2018 36 BUSINESS DAY C002D5556 BD Markets + Finance ‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’ Africa Prudential plc surmount headwinds as earnings surge BALA AUGIE The management and board of directors of African Prudential Plc have once again maximized the resources of shareholders by recording double digit growth in revenue and profit amid a tough ad volatile macroeconomic environment. Financial Performance for 2017 Africa Prudential Plc has turned each Naira invested in revenue into higher profit, thanks to income from treasury bills as the company is optimistic an improving economy will bolster future earnings. An increase at the top lines (sales) flows through to the bottom line (profit), which paved the way for the Registrar to reward the owners of the business in form of cash dividend. For the year ended December 2017, Africa Prudential net profit margin increased to 52.67 percent from 42.23 percent the previous year. A 52 percent profit margin, then, means the company has a net income of N0.52 for each Naira of total revenue earned. Profit margin is a profitability ratios calculated as net income divided by revenue, or net profits divided by sales. Any increase in profit margin is an improvement in profitability. The African Prudential net income spiked by 69.30 percent to N1.71 billion in December 2017 from N1.01 billion the previous year. The Nigerian Registrar’s 37.34 percent surge in gross earnings to N3.31 billion in the period under review was underpinned by an increase in interest in short term government securities. Interest income on treasury bills increased to 121.64 percent to N1.41 billion in the period under review as against N629.15 million as at December 2016. Yields on 30 days, 60 days and 365 days short-term paper stood at 14.50 percent, 15.30 percent and 15.40 percent on Tuesday, according Peter Ashade, managing director, CEO, Africa Prudential Plc to data from FMDQ Website. Africa Prudential also attributed the stellar performance to economic recovery as the country existed its first recession in 25 years in 2017. The Nigerian capital market ended 2017 as one of the best performing stock globally after a six month bearish trend as total market capitalization increased by 47 percent to close at N4.30 trillion. The gradual recovery from the bearish trend was due to a positive half year 2017 results by corporates and increased foreign direct investment as the introduction of a flexible exchange rate regime gave impetus to investor confidence. Africa Prudential’s return on equity (ROE) increased to 24.67 percent to 24.67 percent in December 2017 from 22.19 percent the previous year. In other words, the management of the Registrar has utilized the resources of shareholders in generating higher profit. Eniola Fadayomi, chairman of Africa Prudential said that the company will surpass 2017 performance With the relentless determination of the Federal Government to improve Nigeria’s rating on the international Ease of Doing Business Index to facilitate inflow of foreign investments, the outlook for new registrar as government expansionary budget plan, election spending and improve oil price will result see more companies tap the capital market to raise mote funds. “With the relentless determination of the Federal Government to improve Nigeria’s rating on the international Ease of Doing Business Index to facilitate inflow of foreign investments, the outlook for new registrar mandates from companies going public is very bright,” said Fadayomi. wwAfrica Prudential named best Registrar Africa Prudential Registrars Plc has been named the Best Registrar Firm in West Africa, by the Africa- Canada Trade Alliance, at the 7th Edition of the West Africa Innovation and Excellence Awards ceremony. According to a letter issued by the organisers, the innovation award celebrates outstanding innovations, brands and personalities in the public and private sectors across West Africa, which includes Nigeria, Ghana, Sierra Leone, Republic of Benin, Cote ‘devoir, and Gambia. Others are Mali, Senegal, Togo, Guinea Bissau, and Cameroun. They explained further that this year’s award is based on clear strategic indices, which include efficiency and quality competitiveness, timely delivery of services, customer service excellence, brand value, market and industry capacity, and market rating among competing brands. Africa Prudential had previously won several awards, including International Quality Crown Award, London 2013; Top 25 CEOs Award, BusinessDay 2014; Best Profit Margin Ratio and Best Corporate Governance Awards, Pearl Awards 2015. Company history Africa Prudential Plc,formerly UBA Registrars Ltd, was incorporated as a private limited liability company on 23rd March, 2006 to take over the registrar services previously operated as a department under UBA Global Market Limited. The company was listed on 17 January, 2013. The company renders share registration services to both public and private companies. Africa Prudential Plc closed at 4.74 in yesterday’s trading session on the NSE, up 12.32% year to date. BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)
Tuesday 06 March 2018 L-R: Akin Tunde Oyebode, executive secretary/CEO, Lagos State Employment Trust Fund; Obi Asika, founder, Social Media Week Lagos; Toyosi Akerele Ogunsiji, founder, Passnownow; Tolu Ogunlesi, special assistant to the President Buhari on New Media, and Oghenevwoke Ighure, executive director, digital services, Businessday, during the 2018 Social Media Week in Lagos. Italian court delays $1.3bn bribery case against Shell, ENI It is a saga involving one of Africa’s largest untapped oilfields, two of Europe’s largest companies and the biggest corruption trial to face the energy industry for years. The case of Nigeria’s Oil Prospecting Licence 245 was due to reach court yesterday in Italy, where Royal Dutch Shell and Eni face prosecution for alleged bribery in connection with a $1.3bn payment in 2011 to gain control of the prized asset. Claudio Descalzi, chief executive of Eni, is among five current and former employees of the Italian group also facing individual charges, together with four former senior Shell employees. At a brief procedural hearing on Monday, the start of the trial was postponed until May 14 because of a backlog of cases at the Milan court. The delay was in keeping with a dispute whose origins stretch back 20 years to the Nigerian government’s award of OPL-245 to a company, called Malabu, linked with the country’s then-oil minister, Dan Etete. Subsequent wrangling for control of the asset has been described by Global Witness, a campaign group, as “one of the worst corruption scandals the oil industry has ever seen”. The case shines a rare spotlight on the murky relationships between Nigerian politicians and international oil companies in a country that has struggled to translate rich natural resources into wider economic prosperity. Shell and Eni, which each acquired 50 per cent of OPL- 245 under their 2011 deal, deny any wrongdoing. So too does Mr Descalzi and the other individuals charged. Their lawyers will now have a few extra weeks to prepare the defence against allegations that much of the money paid for the licence was destined for Mr Etete and a network of Nigerian politicians and officials — and that the companies knew it. As a result of the deal, the Nigerian people “lost out on over $1bn, equivalent to the country’s entire health budget,” says Simon Taylor, co-founder of Global Witness, which campaigns against corruption in natural resource industries. When you pay money to governments, do you know who you are really paying? Judith Tyson, Overseas Development Institute Shell has had an interest in OPL- 245 since 2001, when it agreed a partnership with Malabu to explore for oil and gas on the southern edge of the Niger Delta. Within months, Malabu’s licence was revoked by a new Nigerian government and Shell won a new tender that gave it exclusive development rights for $209m. This was followed by years of legal wrangling between Shell and Malabu, which maintained its claim on OPL- 245, as successive Nigerian administrations handed the licence back and forth between the two companies. The 2011 deal with the Nigerian government, under which Eni took over as operator of the licence, was intended to settle ownership rights once and for all. Instead, it drew the attention of Italian prosecutors as well as investigators in Nigeria and the Netherlands, where criminal inquiries are ongoing. The UK Serious Fraud Office and US Department of Justice are also known to have taken an interest, although neither has so far announced formal proceedings. The Italian trial centres on what was known by Shell and Eni about who would ultimately benefit from more than $1bn paid into a Nigerian government escrow ac- Edo committed to attaining self-sustenance with IGR – Shaibu Edo State deputy governor, Philip Shaibu, says the Governor Godwin Obasekiled administration remains committed to implementing economic policies that will create wealth for Edo people and self-sustenance through aggressive Internally Generated Revenue (IGR) drive. Shaibu made this submission at an interview with journalists in Benin City, the state capital. The deputy governor said, “The Godwin Obaseki led-administration prioritises economic policies that will spur growth, wealth creation and prosperity for Edo people. “These policies are targeted at reducing the rate of poverty and unemployment. The long-term economic plan of the state governor is to create wealth and prosperity for Edo people.” According to Shaibu, the state’s economic model is targeted at driving economic growth and sustainability, noting, “with our policies, we intend to achieve self-sustainability for the state where proceeds from IGR will be used to drive economic growth and prosperity for Edo people without depending on the allocation from the Federation Account to drive social growth and development.” He maintained, “When we have fully achieved this, proceeds from the Federation Account will be considered an addition, just like grants from donor agencies.” He assured that the state government is committed to opening up the economic space in the state and creating avenues for more people to participate in economic activities. “The state government’s economic blueprint is also directed at opening the economy to encourage the participation of more people to contribute to economic growth. “We intend to capture more Edo people in the quest for development, so as not to burden few people with taxes. This measure will improve revenue generation. When the economy is open, more people will be captured in the tax net and the tax burden will be spread. We are interested in reducing the tax burden on few persons,” he said. count as part of the deal. Campaigners point to leaked emails in which a former UK intelligence officer hired by Shell wrote of Mr Etete being able to “smell the money” as the deal neared. Other internal Shell emails said Nigeria’s then-president Goodluck Jonathan expected a cut of the proceeds and that his government wanted the transaction completed quickly “driven by expectations about the ... political contributions that will flow as a consequence”. C002D5556 BUSINESS DAY 37 NEWS Obasanjo may die if he does not involve in public affairs, criticisms, Amosun tells critics RAZAQ AYINLA, Abeokuta Governor Ibikunle Amosun of Ogun State has cautioned critics of former President Olusegun Obasanjo who usually attack him whenever the ex-President criticises perceived bad government policies and bad governance. According to Governor Amosun, if Obasanjo does not involve in what he is doing now in terms of public affairs, clamour for governance and criticisms of bad governance, he would die and that might not be good enough for Nigeria as a country at this trying period of nationhood. Speaking at Obasanjo’s 81- year birthday ceremony held at the Olusegun Obasanjo Presidential Library (OOPL) in Abeokuta on Monday, Amosun advised the former President to take life easy as he ages, although he should not consider staying indoors as Obasanjo’s wealth of experience in governance, internal affairs, international relations and diplomacy was still needed. He said, “Love him or hate him, there’s something nobody can take away from him, he’s a true nationalist, Baba loves Nigeria and I know that there’s absolutely nothing he wouldn’t want to do for Nigeria. “Even beyond the shores of Nigeria, if you start counting, Baba would be one of the best three giants of Africa, many of whom are now no longer with us. There’s no way history of our nation, Nigeria and the continent of Africa would be written without the prominent mention of Baba. “When they were praying for Baba, they said 120 and I said 100 is OK, but Baba, when you live to that age, don’t write letters, don’t write ooo, because Baba would continue writing when he lives till 120. Please, don’t write ooo. “Please reduce your activities, you’re not getting young anymore. Baba please slow down, you’re not getting younger anymore, we are not saying Baba should be indoors because he would die, but while you’re doing anything, please slow down because we still want to have you around for many years.” Responding, Obasanjo noted that he would not have achieved so much without his dead parents and loyal servants and helpers who worked with him within and outside government office, but lamented the early departure of his parents from this world, saying the early departure of both parents at tender his age, really saddens him. He said, “Where people talk about my achievement, not mentioning or remembering that I wouldn’t have been able to achieve anything all by myself alone, I believe it could amount to a serious omission because many of those who worked with me with loyalty. Nigeria’s total import rises 8.5% to N9.56bn DAVE IBEMERE National Bureau of Statistics (NBS) says Nigeria’s total imports for 2017 stood at N9.56 billion, 8.5 percent higher than the 2016 trade import that valued at N8.81 billion. The NBS stated this in a report posted on its website entitled: ‘‘Foreign Trade in Goods Statistics for Fourth Quarter and Full Year 2017.’’ According to the report, imported agricultural goods (N227.4bn) decreased by 1.7 percent in the fourth quarter of 2017. It stated that the valued decreased in the quarter compared to third quarter (N231.4bn) but increased by 15.9 percent when compared with fourth quarter of 2016 (N196.2bn). “For 2017, imported agricultural goods increased by 35.09 percent to N886.7 billion from N656.4 billion in 2016. “The raw materials imports in fourth quarter 2017 (N279.4bn) were 2.1 percent lower than third quarter, 2017 value (N285.3bn), and 2.7 percent lower than fourth quarter of 2016 (N287.2bn),” according to the report. Meanwhile, it stated that for 2017, the imported raw materials increased by 19.3 percent to N1,128.3 billion from 945.7 billion in 2016. The report noted that solid minerals imports grew by 5.19 percent in fourth quarter, 2017 (N15.2bn) over the third quarter, 2017 valued at N14.5 billion. It stated that the value recorded in the third quarter, 2017 was 9.2 per cent over the value recorded in the fourth quarter of 2016, which was N13.9 billion. For 2017, it stated that imported solid minerals increased by 372.2 per cent to N235.1 billion from N49.7 billion in 2016. According to the report, energy goods imports grew significantly by 950 percent in fourth quarter, 2017 valued at N138 million. For 2017, it stated that imported energy goods increased to N187.17 million from N8.07 million in 2016. It, however, noted that manufactured goods imports declined in the fourth quarter by 0.28 percent (N1,209.9bn) in comparison to the third quarter, 2017 (N1,213.3bn).