BusinessDay 24 Aug 2018

2 BUSINESS DAY
C002D5556
Friday 24 August 2018
NEWS
Earnings up in 2017 for
Standard Alliance Insurance
Sobechukwu Eze
Standard Alliance Insurance
Plc has finally released its
2017 audited financial statement
to the Nigerian Stock
Exchange. From the report it was
seen that the insurance company
had a stellar performance as its Profit
after tax came out of the red with an
increase of 104 percent, making the
company return to a profit at the end
of the year from its loss in 2016.
According to the 2017 financial
statement, the company grew its
profit after tax (PAT) to N586 million
last year from a loss of N1.3 billion in
the year 2016.
This was largely supported by an
increase in revenue of 11 percent.
From N4.3 billion in 2016 it was able
to grow it to N4.8 billion, which the
company said was mainly attributable
to its resolve for a reformed
corporate strategy.
The company’s financials also
showed that although the company’s
insurance claims went up it was not
enough to pull down the company’s
underwriting profit lower than the
preceding year. The company’s underwriting
results (which reveals the
efficiency of an insurer underwriting
APC holds NEC Thursday, August 30
James Kwen, Abuja
The ruling All Progressives
Congress, APC is to hold its
National Executive Committee,
NEC meeting Thursday,
August 30, 2018. Business Day has
gathered.
The NEC which is to be attended
by President Muhammadu Buhari
is the first since the assumption of
office by the Adams Oshiomhole led
leadership of APC.
Reliable sources in the APC National
Secretariat confided in Business
Day that the NEC would among
other things consider the time table
for the conduct of the party’s primaries
to nominate candidates for the
2019 general elections as well as to
determine the cost of nomination
forms for all offices.
Meanwhile, the National Secretariat
of APC in Abuja remained
shut even as the two days Eid el Kabir
break ended Wednesday and work
resumed yesterday.
According to a circular signed by
Abdullahi Gashu’a, Director of Ad-
activities) went up by 406 percent,
going up from N271million at the
end of 2016 to N1.4 billion 2017
year end.
On the outlook for the company,
the company stated in their financials
that “they expect their investment
income to grow considerably
in the coming years as it sets to
take advantage of the investment
opportunities in the money market
and capital markets still maintaining
its focus on highly liquid financial
instrument such as term deposit,
equity and debt instrument.”
“They also expect to see a number
of significant adjustments in the year
2018, especially to the realities of
vastly changed government revenue
profile and the Naira exchange rates
against foreign currencies. The private
sector may see intensification of
existing and new export initiatives.”
“Lastly the merger of the operations
of the Company with that of its
subsidiary, Standard Alliance Life
Assurance Limited which has been
concluded to leverage on the synergies
derivable would result in the
emerging composite company to
take advantage of the huge potentials
in both the General and Life segment
of the insurance market.”
• Shuts National Secretariat for renovation
ministration, APC National Secretariat
has been partially closed from Friday,
August 17 - Monday, August 27 to enable
staff and party members to travel
for the Eid el Kabir celebrations.
The circular read, “the National
Working Committee ( NWC) has
added additional days to allow
members of staff to travel to their respective
places for the celebration. To
this end, the Secretariat will partially
close for businesses as follows
“ The National Chairman, H.
E Adams Aliyu Oshiomhole and
members of the NWC wishes all
staff a hitch free Sallah celebration
and safe trip while urging members
to pray for the nation and our great
party during the occasion”.
However, Business Day gathered
that the week long break is not just
for the Sallah celebration but it gave
room for interior renovation works
at the Secretariat.
This is coming barely one month
after the John Oyegun led NWC did
interior renovation in the National
Secretariat days before handing over
to the present leadership.
Businesses puzzled by CPC’s move to control...
Continued from page 1
Internet Company from implementing
the new rates. The court
also restrained MultiChoice from
any conduct capable of interfering
with the regulatory process of CPC.
In a press release stating why it
approached the court to stop DSTV
from implementing the new rates,
the CPC argued that ‘it has a constitutional
responsibility to protect the
welfare and interest of consumers in
Nigeria through the instrumentality
of the “the Council.”
However, CPC claims that the
court injunction it got did not intend
to regulate price, or in any way interfere
with the commercial interface
between Multichoice and its customers
in fixing price. ‘Essentially,
the Council recognizes and respects
the fidelity in the operation of free
market forces in arriving at prices for
goods or services.’
‘The Council understands and
appreciates that price is an acceptable
determination of transparent and
undistorted market operations. However,
it is the law, that operators can by
conduct, distort the market and, or
otherwise compromise the integrity
or transparency of the market, thereby
questioning the reliability of the pricing
methodology or mechanism.’
The CPC also admitted that ‘these
principles are better articulated
in the context of a Competition or
Antitrust legislation and regime,
which Nigeria does not have’. The
CPC however insists that ‘they are
consumer protection principles that
are generally express or sometimes
derived from existing consumer
protection legislation.’
The organisation quotes Section
2(i) CPC Act which expressly states
Continues on page 34
Nigerian firms’ capex down,
validates slow GDP growth
BALA AUGIE
Nigerian companies
haven’t picked up the
pace of their investments
in property,
plant and equipment,
which means there hasn’t been a return
to the level of nascent spending
needed to drive economic growth.
Firms, weighed down by sluggish
earnings, political uncertainties,
weak consumer discretionary spend,
high borrowing costs, delay in the
passage of the budget, and rising
inflation, hunkered down and put
spending plans on hold over the past
three years.
A glimpse of the financial statement
of 42 largest firms quoted on
the floor the bourse shows investment
in property plant and equipment
dipped by 21.32 percent to
N112.86 billion in June 2018 from
N143.45 billion the previous year.
Company’s unwillingness to
spend big stem from uncertain times
as they tend to embark on aggressive
expansion when consumer confidence
are restored and the economy
have gathered momentum.
The economy is witnessing slow
recovery and operators in the manufacturing
sector are not generating
enough internal cash flow for investment
purpose, according to Johnson
Chukwu, CEO and managing director
of Cowry Asset Management.
It will be recalled that when the
country exited its first recession in 25
years in 2017, investment in capital
expenditure was down 3.81 percent
to N292.25 billion in December 2017
from N303.83 billion the previous
year, data gathered by BusinessDay
shows.
Analysts say a lot of firms prefer
to give cash back to shareholders in
form of dividend than spend it on
capex since household spending
and construction activities have remained
slow while unemployment
rates continues to go south ward.
“A lot of them are taking cautious
approach because consumer spending
is weak and there is no need to
increase capacity. They still have
excess capacity and their objective
at the moment is to retain market
share,” said Fola Abimbola, FMCGs
analyst at CSL Stock Brokers.
Consumer spending dipped by
-0.99 percent in 2017, according to a
recent data from the National Bureau
of Statistics (NBS).
A breakdown of the capex spend
shows upstream oil and gas major,
Seplat Corporation Development
Company did not acquire plants and
equipment despite crude oil prices
climbing above $70 a barrel in January
for the first time in 3 years.
Seplat is awash with cash as
its free cash flow from operating
activities hit N197.60 billion as at
June 2018, the highest since the last
quarter of 2017 when the figure stood
at N263.20 billion, according to data
gathered from Bloomberg
Dangote Cement Plc, the largest
producer of the building material re-
L-R: Juan Elegdo,
vice chancellor,
Pan Atlantic University;
Ikechukwu
Obiaya, dean
School of Media
and Communication
Studies; Frank
Aigbogun, publisher,
BusinessDay;
Chido Nwakanma,
adjunct faculty, and
Richard Ikiebe,
director of the
Centre for Leadership
Excellence in
Journalism, during
a visit to the university
yesterday
by the publisher of
BusinessDay.
More facilities as Pan Atlantic School of Media
seeks greater collaboration with industry
The School of Media and
Communication, Pan Atlantic
University has added
more facilities in digital editing,
broadcasting and graphics
to enhance practical training of its
students even as it seeks greater collaboration
with industry.
Vice Chancellor of Pan Atlantic
University Prof Juan Elegido disclosed
to the visiting publisher of
BusinessDay newspaper that the
facilities include a dedicated newsroom,
three editing suites for broadcasting
and digital media as well as
audio and visual studios. There is
also a graphics studio equipped with
over 70 Mac PCs.
Elegido conducted the publisher
round the facilities of the school and
sought greater collaboration with the
media and communication industry
in student internships, training of
staff and other exchanges including
research.
The BusinessDay publisher assured
that the organisation was always
in search of young people who
would add value as it fully embraced
digital publishing and the challenges
of the new era of audience selectivity.
He informed that BusinessDay
was deepening its capacity to offer
excellent insights and analyses to its
corded a 38.08 percent reduction in
capex to N24.86 billion in June 2018
from N40.16 billion as at June 2017.
Consumer goods firms have also
scaled back on aggressive expansion.
Nigerian Breweries Plc’s investment
in property plant and equipment
declined by 29.10 percent to
N8.80 billion in June 2018 from N3.62
billion the previous year.
Dangote Sugar Plc’s investment
in property plant and equipment
fell by 43.41 percent to N5.51 billion
in June 2018 from N9.74 billion the
previous year.
Julius Berger Plc, the largest
construction firm by market value,
did not purchase fixed assets last
quarter; instead it is selling assets to
realize cash.
Transnational Corporation of
Nigeria (Transcorp) Plc investment
in property plant and equipment
reduced by 66.12 percent to N5.92
billion in the period under review
from N17.50 billion the previous year.
Analysts are of the view that earnings
outlook has to be bright, borrowing
costs low, and the economy has
to gather momentum while government
has to be keen on infrastructure
spend before firms start to take
decisions on replacing machinery
and plants.
“If the economic growth prospect
is very strong and the lending rate
is low, manufacturers will leverage
to invest in capital goods with the
expectation that they will generate
enough cash flow to pay back interest
on the loan,” summed Chukwu.
audience and thus seeks the best human
capital. BusinessDay is steadily
growing its paid subscriptions and
offering more reviews, features and
in-depth insights to readers.
Dean of the School of Media
& Communication, Ikechukwu
Obiaya, Director of the Centre for
Leadership Excellence in Journalism
Richard Ikiebe and Adjunct Faculty
Chido Nwakanma joined the Vice
Chancellor to guide the visiting
publisher on tour.
Richard Ikiebe is Chairman of
BusinessDay Media Limited while
Chido Nwakanma is on the Editorial
Board of BusinessDay.