Kayode Tokede
Amid macro economy challenges, orchestrated by COVID-19 pandemic, among others, nine most capitalised stocks on the Nigerian Exchange Limited (NGX) reported 22 per cent increase in profit before tax to N1.29 trillion in nine months ended September 30, 2021 from N1.06 trillion reported in nine months of 2020.
The nine highly capitalized companies on NGX are Dangote Cement, MTN Nigeria Plc, BUA Cement Plc, and Nestle Nigeria Plc.
Others are Guaranty Trust Holdings Company Plc (GTCO), Zenith Bank Plc, Stanbic IBTC Holdings Plc, NB Plc, Lafarge Africa Plc.
It was learnt that stronger revenue and effective management of cost were major impetus for growth Dangote Cement, BUA Cement, Lafarge Africa, Nigerian Breweries, MTN Nigeria, NB, Zenith Bank and Nestle Nigeria recorded growth in profit before tax in period under review.
The likes GTCO, Stanbic IBTC Holdings recorded decline in profit before tax on the heels of weak gross earnings’ and hike in operating expenses.
Out of the N1.29 trillion reported profit before tax, Dangote Cement contributed 31.5 per cent when the cement manufacturing company reported N405.49billion profit before tax in nine months of 2021, an increase of 49 per cent to N271.96billion reported in nine months of 2020.
The Group Chief Executive Officer, Dangote Cement, Michel Puchercos in a statement said the company exceeded its 2020 full year results in the first nine months of 2021 with EBITDA currently trending at 45 per cent y-o-y as at the end of September 2021, more than double the 21 per cent EBITDA growth in 2020.
“Despite operating in a complex, challenging, and fast-moving environment, Dangote Cement is consistently delivering superior profitability and returns to the shareholders,” he explained.
However, MTN Nigeria grew its profit before tax by 51.9 per cent to N321.35billion in nine months of 2021 from N211.59billion in nine months of 2020, to becoming second most profitable company on the NGX.
CEO, MTN Nigeria, Mr. Karl Toriola expressed that the telecommunication giant in the first nine months of 2021, continued to enhance its resilience of the business, improve performance and make good progress towards Ambition 2025 strategy.
According to him: “Overall, service revenue continues to grow, increasing by 23.7 per cent, ahead of the rate of inflation and supported by voice revenue growth of 10.6per cent and accelerated data revenue growth of 51.5 per cent.
“In addition, our focus on cost management through our expense efficiency programme, combined with service revenue growth, led to a 1.6pp EBITDA margin expansion to 52.6 per cent and translated into an increase of 51.9 per cent in PBT.”
However, Zenith Bank struggled to grow profit before tax by 1.43 per cent to N179.8billion in nine months of 2021 from N177.28billion reported in nine months of 2020.
The bank in a statement said: “As we go into the final quarter of the year, management’s outlook remains positive buoyed by a declining inflationary trend, expected increase in foreign exchange inflows, and improving oil production.
“The Group remains focused on increasing its retail market share, consolidating its leadership position in the corporate segment and maintaining a robust balance sheet.”
Among the above named companies, Stanbic IBTC Holdings recorded the worst profit before tax in the period. The lender reported 41.05 per cent drop in profit before tax to N45.3billion in nine months of 2021 from N76.87billion reported in nine months of 2020.
In addition, GTCO reports 9.2 per cent decline in profit before tax to N151.91billion in nine months of 2021 frin N167.35billion reported in nine months of 2020.
The Group Chief Executive Officer of GTCO, Mr. Segun Agbaje, said, “Our performance validates the resilience of our balance sheet in spite of the challenges in the operating environment and, further justifies our decision to diversify our earnings by going beyond banking in creating long-term value for our discerning stakeholders.
“Looking forward, we will replicate our digital-first, customer-centric banking strategy in the wealth management and payment spaces to rapidly scale our service offerings in line with our long-term strategy.”
He further stated that: “As businesses and households continue to recover from the lingering impact of covid-19 pandemic, our resolve to stand with our customers and communities through the recovery process is yielding the desired results. Ultimately, we aim to improve the lives of our stakeholders and build partnerships with our communities.”
Commenting, the Managing Director, Afrinvest Research & Consulting, Mr. Abiodun Keripe said the corporate earnings by most capitalised stocks on NGX showed mix performance in unaudited nine months ended September 30, 2021.
According to him: “It was expected of listed companies maintained or defend reported profit before tax in nine months of 2021. When I say defend, it may not be impressive performance across board. Some companies may report growth in profit before tax, while some will report a moderate contraction.
“But for average performance, we expected most capitalized stock to defend their profitability shrink by inflation pressure and low consumption power,” he explained.
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