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”.
Monday 09 April 2018 Only 42% of 92m mobile subscribers use mobile banking app BUNMI BAILEY Only 42 percent of banking customers are currently using their bank’s mobile banking applications against a 92 million mobile telephone subscribers with internet access in 2017, according to the 2018 mobile banking report by Neetch Company. The report contains the outcome of a research conducted by the company which is aim to bridge the gap between banking products and customer experience. According the report an estimated 148 million mobile telephone subscribers and at least 92 million of them with access to Internet data on their mobile devices, there has been a decrease in total Internet banking log-ins against mobile banking log-ins year on year. “This shows that people are still not tech friendly. The network for those applications are still in the hands of telco and all that and a lot of time when there is failure from telecommunications and all FINTECH sets to give Africans a blockchain experience Fintech Worldwide Limited, a London based Events Company with an emphasis on emerging technology is set to give the African continent a new vista in digital technology known as the blockchain. Declaring this at a press conference in Lagos recently, Steph Mekwuye, Founder and CEO Eka Consult and Strategist/ Coordinator for the Fintech worldwide in Africa, said the initiative will commence in Nigeria. According to her; “blockchain technology is today being used in most of the developed worlds of America, Europe and Asia and it has not be utilised in Africa, so Fintech Worldwide is bringing it through a conference to be held in May in Lagos Nigeria, being the most populated and the country with the largest business opportunities on the continent. It is a fact that our population is increasing and we need to work faster and more efficiently. Last year, according to business insider, the number of Nigeria’s mobile subscribers has reached 150 million, and the number of its internet users has climbed to 97.2 million at penetration rates of 81% and 53%, respectively. For context, Africa has 960 million mobile subscribers and 216 million internet users at penetration rates of 80% and 18%, respectively. So that it affects the applications and so a lot of people are not confident in using it”, Stephen Nejo, a banker at sterling bank told BusinessDay in a phone interview. The study measured the overall customer experience using mobile banking applications in 2018 while highlighting; customer engagement channels, conversion rate, mobile banking complaint resolution timeline, challenges faced using mobile banking applications, likelihood to recommend and areas for improvement. On overall satisfaction, users in this research communicated their satisfaction with their bank’s mobile banking application. 77% of users were satisfied, 16% indifferent and 7% dissatisfied. Many believe that most banking apps can be hacked and their personal information and valuables can be stolen “Most people do not believe or trust in apps or transfer because of the fraud that happens when you get or send alerts from people or places that is not from the bank and also the bank apps features can be cumbersome boasting a thriving eco system, high rates of mobile penetration and an audience engaged in varying activities, Lagos is made for blockchain.” Explaining what blockchain really mean and how it works, Mekwuye said; “blockchain technology is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. For confidentiality most enterprises use a private blockchain where the ledger is only shared with nodes that have been cleared and validated it is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” At the event where blockchain experts, Yannis Kalfoglou, Muneeb Shah, Ryan Goutay spoke via Skype from Europe; Kalfoglou said; “Blockchain technology provides the answer to digital trust because it records important information in a public space and doesn’t allow anyone to remove it. It’s transparent, time-stamped and decentralized. Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The for customers since they want it easy and fast”, Gboyega Olurankinse,” a banker said According to statistics from the Nigeria Inter-Bank Settlement System (NIBSS) data, the number of active bank accounts reduced by 1.5 million, dropping from 65 million in 2016 to 63.5 million in 2017 “It could imply that so many people don’t have bank accounts but the truth is that the future of banking is digital and mobile so they need to get use to these apps”, Dolapo Ashiru, chief executive officer, Mega Capital financial services limited said. Financial institutions and Internet service providers in Nigeria are encouraged to work towards improving user experience by focusing on the value, adoptability, usability and desirability of mobile banking applications. “The bank needs to enlighten their customers on the safety of the app and more awareness needs to be created. Nowadays you can transfer money from one account to another, credit your account with Airtime, pay bills etc .The apps are friendly are easy to use”, Nejo said blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.” In the same vein, Luis Carranza of Fintech Worldwide, London stated via Skype that blockchain “is a new technology that will provide essential usage in every area of life and business ranging from business, commerce and trade, entertainment, governance, tourism, agriculture, banking and finance, education, energy, human resources insurance among others. May 7 is definitely a date with Nigerians where all shall be revealed.” Fintech runs events across the globe including London, New York, San Francisco, Dublin, Amsterdam, Tel Aviv, Hong Kong and several other locations. Our flagship event, Fintech Week, has been running since 2014. In 2015 it started running Blockchain Conferences leading up to Blockchain Week. For 2018 and beyond, Fintech Worldwide is focusing on continued organic expansion in key tech and financial service hub across the globe. COMPANIES & MARKETS Business Event BUSINESS DAY 21 L-R: Anthony Nsiah Asare, director general of Ghana Health Service presenting Innovation in Malaria Financing Award to Access Bank PLC representative, Omobolanle Victor-Laniyan, at the Malaria Safe Awards in Ghana. L-R: Idowu Adesokan, senior manager, high value segment, MTN, Rikki Stein, Fela Anikulapo-Kuti’s lifetime manager, Bolanle Austen Peters, producer, Fela and the Kalakuta Queens and Anthony Manjaro, Nollywood actor at the MTN Foundation sponsored Musical titled Fela and the Kalakuta Queens held at Terra Kulture Arena, Victoria Island, Lagos recently. Pic by Pius Okeosisi L-R: Sade Onyia, management consultant; Kenechukwu David Nwafor, winner of the IT category; Mary Adenike Adeleye, winner of the PR category, and Damiloa Sobajo, general manager, Sesema PR, at the 3rd edition of Sesema PR’s Corporate Communications Pitch Competition in Lagos. L-R: Obi Brown, Insight Africa; Tayo Aduloju, senior fellow, Public Policy & Institutional Development, NESG; Toluleke Adenmosun, Managing Director, Financial Services, Accenture Nigeria; Niyi Yusuf, managing director of Accenture Nigeria and Ladipo Lawani, L&L Foods at the cocktail meeting of Accenture and 23rd Nigerian Economic Summit (NES23) Startup Pitch Winners in Lagos.