BusinessDay 09 Apr 2018

20
BUSINESS DAY
COMPANIES
& MARKETS
Company news analysis and insight
C002D5556
Monday 09 April 2018
Only 42% of 92m mobile
subscribers use mobile
banking app
Pg. 21
PHARMA DEKO records 94% drop in
profit as operating cost surge
MICHEAL ANI
Despite a rebound in
economic activities
that has been
witnessed in the
pharmaceutical industry,
Pharma Deko, one of the biggest
players in the Nigerian
drug market and fast moving
Consumer goods (FMCG)
space, recorded a 94 percent
decline in profit on the back
of a high operating cost in full
year 2017.
In 2017, the pharmaceutical
firm posted a profit after
tax (PAT) of 12.6 million,
representing a 94 percent
from the 218.7 million that
it recorded in 2016, during
the thick of the economic
recession.
A cursory look at the
firm’s stock price shows that
investors are finding its stock
unattractive as the firm stock
price is trading at a negative
4.66 percent, underperform-
ing the NSE all-share index
of 6.79 percent year-to-date.
Further analysis indicated
that the company’s total
assets were down by 53.4
million to N2.27 billion last
year from N2.32 billion two
years ago. Total liabilities
also fell increased by 55.2
million to N52.8 million in
2017 from N58.3 million in
2016.
The pharmaceutical
industry is one of the industries
that are greatly influenced
by political and
economic changes.
In terms of production,
contributions from Pharmaceutical
Manufacturing
Group of Manufacturers’ Association
of Nigeria (PMG-
MAN) and United Nations
Industrial Development Organization
(UNIDO) affirm
that the local pharmaceutical
manufacturing industry
in Nigeria is currently able
to meet 25 per cent of local
demand. The remaining 75
per cent has to be covered
with imports from Asian
companies, most especially,
China.
Production in the sector of
has been greatly constrained
by the present economic
recession that affected the
country in 2016. As pharmaceutical
companies experienced
difficulties in producing
drugs, dispensable.
These constraints arise as
a result of exchange rate fluctuations,
import duties, high
taxation, poor infrastructure,
inadequate human capital
and non-availability of raw
materials. This is as a result of
the over dependence on the
Nigerian oil market, excessive
dependence on imports
for both consumption and
capital goods and the sharp
fall in foreign exchange earnings.
For the year ended December
2017, the cost of production
for the drug making
firm surged by 39.4 percent
to 830.2 million from 595.6
million in 2016.
Swift Networks partners global
brands, shops to provide free
internet service to Nigerians
Daniel Obi
Swift Networks, Nigeria
foremost broadband
service provider
to enterprises and
residential customers has
entered into partnership with
global brands and shops in
Lagos to offer free broadband
Wi-Fi service to Nigerians.
Under the partnership, Swift
Networks will provide systems
for free Wi-Fi for consumers.
The service code-named
Red Cheetah, a new brand
under the stable of Swift Networks
will start with initial
10,000 hotspots distributed
all over the state, supported
by advertising revenues from
global brands and partners.
Other cities will follow.
The product which is expected
to solve consumers’
quest for internet will help to
deepen Nigeria’s broadband
penetration and aspiration
for universal internet access
for greater social equity and
inclusion.
“The Red Cheetah service
model follows in Swift’s tradition
of demystifying and
making technology to work
for Nigerians so that they can
hook up to the digital world to
explore, work and entertain
more efficiently”, says Charles
Anudu, the entrepreneur behind
Swift Networks.
He told newsmen at the
unveiling of the product that
Swift is excited to pioneer this
cutting edge service model
and will rapidly extend it to
more cities in Nigeria and the
continent.
According to Anudu who
explained that entrepreneurship
is not about making money
first but solving society’s
needs said security of every
user’s access is enhanced by
the Red Cheetah App which
establishes a distinct and secure
Virtual Private Network
connection to the internet for
each device on the platform.
“I strongly believe that this
dogged work of over two years
is the ideal model that will empower
Nigerians to live their
most productive lifestyles in a
digital world. I am proud that
everything about Red Cheetah
is Nigerian and shows what we
can achieve when we commit
to solving the problems of our
society taking our context into
consideration”
In his view, Chukwuma
Okoye, the Chief Operating
Officer of Swift said the
company’s plan is to roll our
an initial 10,000 Red Cheetah
hotpots in Lagos which will
be the largest Wi-Fi footprint
of its kind in Africa and will
cover many verticals including
schools, airports, buses,
taxis, shopping malls, bars,
clubs, open markets and
hospitals.
He said the service is fast,
secure and reliable and supported
by legendary sponsor
brands which also have
strong commitment to CSR.
The company has presently
achieved 500 hotspots.
L-R: Yoichi Sagara, general manager, Africa department, Toyota Motor Corporation; representative
of First Bank, plc; Micheal Ade-Ojo, chairman, Toyota Nigeria Limited, and Henry Ade, head,
dealer development/ special project, Toyota Nigeria Limited, during the presentation of the
evergreen customer of the year award to First Bank PLC at the Toyota awards 2018 in Lagos
on Thursday.
Pic by Pius Okeosisi
CFOs apprehensive about tax multiplicity – KPMG survey
HOPE MOSES-ASHIKE
Chief Financial Officers
(CFOs) in Nigeria have
identified tax, regulatory
and government
policy as the most important
‘stay awake’ issues for them.
The critical concern is closely
followed by those arising from
internal challenges such as
margin enhancement, growth
and cost optimization.
These findings were revealed
in the 2018 KPMG CFO
Outlook survey report that was
presented at the KPMG CFO
Forum which held recently in
Lagos.
The report shows that only
46 percent of the CFOs who
were surveyed were optimistic
about the prospects of growth in
2018 compared to 2017.
“The overriding sentiment is
that there is still a lot more that
needs to be done to make this
issue of ease of doing business
a reality. Only 15 percent said
government efforts to improve
the ease of business were seen
as effective, 45 percent of the
CFOs were neutral and 40 percent
said the efforts were ineffective”,
Tola Adeyemi, Partner
and Head, Audit Services at
KPMG in Nigeria said .
The event had in attendance,
Chief Financial Officers,
Finance managers/controllers
and Finance directors from
businesses representing all sectors
of the economy.
Presenting the CFO outlook
survey report, Adeyemi,
explained that CFOs and
heads of finance in leading
organizations across all major
sectors in Nigeria shared their
opinions on the outlook for
their businesses, their strategies
for cost and risk management
and the priorities for an
enabling environment. The
survey report also includes
revelations around what CFOs
believe that the Government
should prioritize to create an
enabling environment.
Babatunde Fowler, FIRS
Executive Chairman, delivered
a keynote address at the
event, titled ‘Outlook for tax
administration in Nigeria and
opportunities for enhanced
collaboration with the private
sector’.
He said that “the country
faces a huge infrastructure
deficit, as documented in
the recently launched Nigeria
Economic Recovery and
Growth Plan (ERGP). Nigeria
needs to invest USD3 trillion
in infrastructure over the
next 30 years. He went on to
say that Taxation will play a
key role in the development
process by providing the
needed resources to fund
government developmental
projects and programmes,
as the Federal Government
alone cannot provide these
resources.
Speaking on some of the
advancements done by the
institution, Fowler said, “The
FIRS has taken bold steps aimed
at broadening its tax base and
increasing tax collection. In collaboration
with other relevant
government agencies, the FIRS
also undertook a massive nationwide
registration exercise
of new taxpayers in 2016”.