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Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.
The newsletter is divided into two parts:
Green White Green is focused on the Nigerian stock market.
Star-Spangled Banner is focused on the US stock market
Green White Green Last Week
Last week was an extremely busy one on the NGX. Earnings season kicked off properly. Every quarter, companies on the stock exchange have to file their financial statements. Since this all happens at once, that is, many companies doing so at the same time, it is referred to as a season.
Access joins the race for capital
Access Holdings (parent company of Access Bank) released its audited FY 2023 numbers.
The firm has proposed a final dividend of ₦1.80 (bringing the total dividend for FY 2023 to ₦2.10 as it paid an interim dividend of 30 kobo last year). The qualification date is April 10, 2024. The payment date is April 19.
While the headlines tend to focus on the ₦2.5 trillion in gross earnings (people like big numbers), there were over ₦600 billion in FX gains and profit after tax of ₦619 billion. Beyond the FX gains, the numbers are pretty solid.
It made ₦747 billion as interest income on loans and advances to customers.
Under the fees and commissions line, it made ₦101 billion as e-business income and ₦99 billion as credit-related fees and commissions.
The company also held an analyst call with questions mostly centered around its planned equity raise.
The firm plans to raise ₦365 billion through a rights issue and at some point down the line $1.5 billion in dollar debt.
In some ways, the move is a prescient one, as it came a few days after the CBN issued new capital requirements for banks with a 2025 deadline.
There’s a whole debate around the CBN’s instructions (that’s a stand-alone article).
Palm oil money
Shareholders of Okomu Oil Palm have cause to smile following the proposed dividend of ₦14.00 per share. The dividend will be paid on May 23, 2024 to shareholders whose names appear in the company’s register of members at the close of business on the qualification date.
How did the company fare last year?
Oil palm and rubber production dipped, but higher international prices made up for that. In the financial statement, the firm made mention of CPO (crude palm oil) and rubber prices going up by 22% and 28% respectively within the year.
Oil and gas space
It had mixed fortunes. Eterna recorded a loss after tax for the year of ₦9.4 billion (in FY 2022, it recorded ₦1.01 billion in profit). The loss was majorly driven by an FX revaluation loss of ₦18 billion due to the devaluation of the foreign exchange rate by the Central Bank of Nigeria (CBN) on June 14, 2023.
MRS Oil made ₦4 billion in profit and will be paying out N809 million in dividends. That amounts to ₦2.36 per share to investors who hold the shares on or before June 28, 2024. The payment date is August 2, 2024.
60% of that money will go to MRS Africa, which is ultimately controlled by Saayu Dantata, and 10.47% to the Asset Management Company of Nigeria (AMCON).
Total Nigeria was in the middle of the pack
Turnover rose by 32% from ₦482.47 billion in 2022 to ₦635.95 billion in 2023. Profit after tax decreased by 20% from ₦16.12 billion to ₦12.91 billion.
What was the key challenge? The movement in the exchange rate.
“In 2023, due to unavailability of foreign exchange, TotalEnergies, like others, did not import petrol. NNPC maintained the role of sole importer of PMS and we and other marketers purchased PMS and AGO from NNPC. During the year, there were several outages of PMS which slowed activities in our stations across the country. AGO & Jet A1 remain fully deregulated but access to foreign exchange by marketers continues to be a challenge, inhibiting imports. The price of diesel opened the year at ₦850/L and closed as high as ₦1,200/L.”
That also impacted profit margins on lubricants which are typically more juicy than white products (petrol, diesel).
Management has proposed ₦8.49 billion in dividends amounting to ₦25.00 (twenty-five per share) as its final dividends. The payment date is June 17, 2024.
Green White Green This Week
We will see more companies release their audited FY 2023 numbers. We could also see more news from banks and other firms in the financial services space pertaining to raising capital to meet the new requirements set by the Central Bank of Nigeria
Star-Spangled Banner Last Week
The S&P 500 had one of its best first quarters since 2019 as it appreciated by 10%. The S&P 500 comprises 500 of the biggest companies in US stock markets.
Shakeup at Boeing
Three key staff members at Boeing are stepping down (in light of the quality control issues around the 737 Max). Stan Deal, head of its commercial airplane unit, will retire immediately. CEO David Calhoun will resign at the end of the year. The Board Chair will stand down at the next shareholders’ meeting.
End of the road (for now) for SBF
Sam Bankman-Fried (commonly known as SBF), founder of cryptocurrency firm FTX, was sentenced to 25 years in the United States following the collapse of the exchange due to misappropriation of funds.
Star-Spangled Banner This Week
It is a fairly quiet week in terms of earnings. Levi Strauss and Blackberry will drop their most recent earnings.
Beyond that, the home of Mickey Mouse will be in the news this week. Disney has a shareholders meeting with undercurrents running. Activist investors have taken a stake in the company and are calling for reforms.
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