12 May 2009

Nigeria: Total, Nestle, NB, Lead As 36 Firms Distribute Dividend, Bonus

The twin primary health indicators of the Nigerian Stock Exchange (NSE) made perhaps their most significant jumps so far this year last week, as the All-Share-Index and equities capitalisation rose by 2,025.15 basis points or 9.42 per cent and N460.166 billion, as both closed at 23,516.26 points and N5.343 trillion respectively.

Last week's was the second major growth by the indicators, after that of the week ended April 24, when the index closed 7.4 per cent up, while capitalisation notched N351.822 billion, making it the most significant contributor to the 8.25 per cent and N399.797 billion improvement recorded in the indicators for the month of April. Before now, and in between both periods, the indicators in recent weeks have recorded slow growth, giving the management of the NSE and chief executives of stockbrokerage firms hope that the market rebound has come to stay, rather than being a mere fluke.

While no one is ready to say with all certainty that the bears are gone, at least for now, analysts agree that the market indicators may take much more than the 40 months of bear-run it took to attain the exchange's March 5, 2008, all-term high.

One major factor that has helped the rebound, it is believed, is the continued impressive quarterly and full-year resulted posted by most stocks listed on the NSE, many of which have given dividend and/or bonus issues to their shareholders at the end of their year ended December 31, 2008. Results released to the market by the company boards, through the NSE, which initially did not elicit reactions from investors, may have started keying as liquidity and confidence gradually begins to flow back.

Available results at the end of last week showed that so far, about 34 quoted companies have offered some form of benefits to their shareholders, predominantly, in the form of dividend, while only four offered a share split, out of which three were a combination of bonus and dividend. Also, four of the companies distributed twice yearly (interim and final) dividend. A further breakdown shows that most of these companies are in the manufacturing sectors of the economy.

While the duo of food beverages and confectioneries making giant, Nestle Nigeria and petroleum products marketing major,Total Nigeria paid the biggest dividend per share, followed by Mobil Oil Nigeria, a rival to Total, Nigerian Breweries with its far larger number of shares outstanding in its books may have been the biggest cumulative spender for its owners for the period under review. One other revelation from the various results indicated that most boards paid out almost all of their distributable income in what many say is a show of investor friendliness at a time of great global economic turmoil that has had negative impact on several families across the world. There are those who accused the companies, most of who are owned mainly by Europe-based parent companies of capital flight, which others argue in any case, are allowed under the country's investment laws.

According to the results already released by the exchange between January and May 8, 2009, as published by analysts at Meristem Securities Limited and gleamed from the NSE weekly market report, while Total Nigeria emerged most investor-friendly, first with an interim payout of 380 kobo, followed by the final 913 kobo, which brings total paid as dividend within the period to N12.93. It was followed by Nestle Nigeria's N12.55 each, beginning with 195 kobo (interim) on December 1, 2008, and N10.60 (final), that was approved for payment by shareholders at the annual general meeting held in Lagos last month. Nigerian Breweries, however, started with a bigger interim dividend payout of 190 kobo on January 6, before recommending a final of 50 kobo for consideration at the AGM in the coming weeks. Mobil Oil has also offered to pay 500 kobo per share, just as Chemical & Allied Products has proposed a final of 130 kobo, after paying 200 kobo interim on November 3, last year. So far, Guaranty Trust Bank is the only company paying as much as 100 kobo and still offering a bonus of one new share for every four held by shareholders.

Others on the corporate benefits table year-to-date, include maritime operator- Japaul Oil & Maritime Services, AG Leventis Nigeria, and Airline Services & Logistics paid out seven kobo per share; FTN Cocoa Processor, 3.5 kobo; newly listed Courteville Investment and Multiverse Resources, four kobo apiece; quick service restaurant chain owners Tantalizers offered six kobo; just as Presco offered a lean three kobo, down from the five kobo paid in the corresponding period of 2007. Continental Reinsurance offered five kobo for the period; conglomerate- SCOA, offered 15 kobo, just like Deap Capital Management and Trust; Custodian & Allied Insurance recommended 9.5 kobo final dividend, after paying an interim of 7.5 kobo on October 23, 2008; Vitafoam Nigeria offered 30 kobo, three time bigger than the 10 kobo offered for distribution by Sterling Bank group (Sterling Bank would however in real terms pay more because it has 12.563 billion shares in his books, as against Vitafoam's 819 million units); BOC Gas offered 26 kobo; just as Okomu Oil Palms is giving 25 kobo. Beta Glass, a member of the AG Leventis Group, just like Nigerian Bottling Company (whose directors have sealed hopes of any dividend payout this season, arising from a set back suffered following a fire that razed its Benin City, Edo State based, for which the insurers have not made full payment), has offered 30 kobo. Berger Paints has also offered 30 kobo dividend; Longman Nigeria is offering a double of 50 kobo dividend and one-for-two bonus; Unilever Nigeria, 68 kobo; and Lafarge Cement WAPCO Nigeria, offered 60 kobo for the 2008 financial year.

Meanwhile, the management of Lafarge Cement WAPCO will, this morning in Lagos, hold an investors' relations forum, which, according to Mrs. Edith Onwuchekwa, its company secretary/legal adviser, is "to create an interactive and informative medium through which the activities of the company, since the last annual general meeting would be communicated to investors." The forum will also serve as an opportunity for comments and questions on its activities ahead of the AGM on May 27, 2009.

Other companies on the benefits register include RT Briscoe Nigeria, which paid out 40 kobo, in addition to one-for-five dividend; Cement Company of Northern Nigeria, 45 kobo; Glaxosmithkline Consumer, 60 kobo; and Nigerian Aviation Handling Company, 55 kobo. Premier Paints was the only company that offered a bonus without a cash dividend, within the period, just as Ecobank Transnational Incorporated, last week, offered to distribute a dividend of 23.8 kobo, which was mistaken by investors when it was communicated by the directors through the NSE, leading to a rush for its shares, only to be placed on offer when the picture became clearer.

NB Offers N18.15b Payout

NB may well emerge the hen that lays the golden egg this year, going by the total 240 kobo dividend recommended for payment for the year ended December 31, 2008, which translates to a cumulative payout of about N18.15 billion. The company had in December proposed a 190 kobo dividend for those whose names appear on the register of members at the close of trading on December 29, 2008, and payable on January 6, this year. This year's payout is however lower than the N18.906 billion, or 250 kobo per share, paid for the corresponding period of 2007, but better than the 144 kobo paid a year earlier.

Nestle

The result of Nestle Nigeria for the 2008 operating year got popular applauds from its shareholders at its AGM, a few weeks ago, just the proposal by the Chief Olusegun Osunkeye-led for a finaly dividend of N10.60, which when added to the interim dividend of 195 kobo paid on December 1, 2008, brings cumulative dividend paid to N12.55 each or N8.289 billion, representing almost the entire profit attributable to shareholders for the year.

According to the result, sales income for the year amounted to N51.742 billion, up by about N7.716 billion or 17.256 per cent, when compared to the previous year's N44.027 billion. Profit before tax at N11.862 billion rose by about N3.399 billion or 40.16 per cent, as against N8.463 billion reported in the corresponding period of 2007, while net profit growth was faster at N2.889 billion or 53.09 per cent at N8.331 billion from N5.441 billion. A breakdown of the figures shows earnings per share of N12.61, as against the previous years 917 kobo from which the directors paid only 370 kobo each as dividend. Also, net profit margin for the period rose to 16.10 per cent, better than previous year's 12.35 per cent.

Total Nigeria

The company announced a final dividend of 913 kobo per share payable to those who are shareholders between April 20 and 23, while the dividend warrant was slated for distribution from April 29, 2009. The dividend follows the interim dividend of 380 kobo on December 15, 2008, and brings total dividend payout for the year ended December 31, 2008 to N12.93 each, represents the entire N12.93 earnings per share for the period.

According to the result, turnover rose by N40.072 billion or 29.17 per cent to N177.411 billion from previous year's N137.339 billion, out of which profit before tax stood at N6.508 billion, representing a growth of about N1.68 billion or 34.79 per cent from N4.828 billion. Profit attributable to shareholders for the period rose from N3.255 billion to N4.393 billion, representing an increase of about N1.138 billion or 34.96 per cent within the period, translating to net profit margin of about 2.47 per cent in the capital intensive sub-sector, which is a near 50 per cent decline in net profit margin from, compared with previous year's 4.61 per cent.

GTB

GTB became the first bank this year to announce the adoption of the uniform year end agreed by bank chiefs at the meeting of the Bankers' Committee (comprising chief executives of banks and related financial institutions, as well as representatives of the Chartered Institute of Bankers of Nigeria, among others) and Nigeria Deposit Insurance Corporation and the Central Bank of Nigeria, earlier in the year. The bank announced a change to December 31, as against the earlier February 28/29, informing the NSE that the change, is in line with the CBN directive that all banks should adopt uniform year end to ensure transparency. Subsequently, the bank submitted its audited result for the 10-month ended December 31, 2008, as against the previous February 28/29 year end.

Gross earnings for the 10 months period stood at N104.12 billion, representing an increase of about N22.625 billion or 27.76 per cent, compared with the N81.495 billion reported in the 12-month period ended February 28, 2008. Profit before tax stood at N35.177 billion, up by N7.809 billion or 28.53 per cent from N27.368 billion, while profit attributable to shareholders grew by N7.146 billion or 33.75 per cent from N21.169 billion in 2008 to N28.315 billion, which translates to earnings per share of 187.4 kobo, out of which the board has offered to pay 53.47 per cent. The payout shows that the company is paying out about N15.109 billion (at 100 kobo dividend per share), in addition to the bonus issue.

Mobil

One major highlight of the annual general meeting of petroleum products marketing major- Mobil Oil Nigeria on the May 28, 2009 eve of Nigeria's "decade of democracy," would include the board's proposal for 500 kobo dividend per share or about N1.502 billion, for those whose names appeared on the register of members when it is closed between April 29 and 30, while payment is slated for June 4, 2009.

According to available details of the result, sales income rose to N66.74 billion, representing a growth of about N12.199 billion or 22.36 per cent from the previous N54.541 billion. Profit before tax for the period under review was however less significant, rising by N528 million or 19.90 per cent to N3.181 billion, compared with the previous N2.653 billion. This was however depressed by the provision of N637.938 million, as against the preceding year's N889.022 million, for exceptional items, which after tax, left distributable income at N1.718 billion, a N587 million or 51.90 per cent growth from the N1.131 billion reported in the corresponding period of 2007. A further break of the net profit showed earnings per share of about 571 kobo, meaning that the directors are retaining some part for reinvestment purposes, just as net profit margin stood at 2.57 per cent, a slight improvement when compared with previous year's 2.07 per cent.

The 500 kobo payout is the lowest in three years, and a significant 410 kobo decline from last year's 910 kobo payout per share, and even the 650 kobo paid at the end of 2006.

Companies Investors Are Awaiting

There are, however, several companies that continue to keep investors guessing, as the wait for the 2008 audited performance scorecard lingers.

They include building materials manufacturing giants, Benue Cement Company and Ashaka Cement, petroleum products marketing giant, Oando, Conoil, and embattled rival, Chevron Oil Nigeria, as well as drug marker, May & Baker. Also expected to turn in their results in the coming weeks and months are: Chemical and pharmaceuticals majors- Nigerian-German Chemicals and Neimeth Pharmaceuticals, PZ Cussons Nigeria, Dangote Sugar Refinery (which seems to have rescinded its earlier resolve to offer interim dividend on a quarterly basis, instead of the usual wait till year end), and its sister firm, Dangote Flour Mills. Others are Cutix, UAC of Nigeria, Mutual Benefits Assurance, Prestige Assurance, Standard Alliance, Lasaco Assurance, Unilever Nigeria, Julius Berger Nigeria, Crusader Nigeria, University Press, Costain (W/A), as well as Cappa & D'Albato.

It is not know yet how many banks would rather close their books for the year on December 31, 2008, instead of retaining their old year end and then reporting for audited period of between six and nine months, and in the process stick to December 31, 2009. Those like First Bank of Nigeria and Union Bank of Nigeria may likely present to audited result for this year (one on March 31, and then December 31). Ecobank Nigeria is expected to submit its result up to December 31, the delay so far, may not be unconnected with its ongoing acquisition of African International Bank.

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