Nigeria | NGX

BUA cement’s +17.2% y/y Revenue growth in H1 2023 was primarily driven by an upward price adjustment amidst stable sales volumes. Bua Cement reported increases in prices in H1 2023 with average cement price rising to N67,192/ton in H1 2023 from N56,454/ton in H1 2022 while sales volumes closed H1 2023 at 3.29 million MT from the 3.34MT recorded in H1 2022, indicating a 1.5% decrease. Net Income increased by 3.7% y/y to N63.62bn in H1 2023 from N61.36bn in H1 2022

We revise our CPO and RBDO production forecasts for FY'23 to 62,500 tons and 65,000 tons, respectively (vs 52,813 tons and 55,943 in 2022 and 66,211 tons and 61,228 tons in previous projections). The company's output will likely be supported by the continued ramp-up in production at the acquired SIAT Nigeria Ltd, which increased the oil palm area planted by 15,000 hectares and boosted matured areas by 40.1% late last year. Overall, we forecast revenue 13.4% higher in FY'23 at N92.85 billion, with EPS likely to grow 45.7% YoY to N18.99 per share.

Despite notable challenges in H1'23, SEPLAT appears set to achieve production levels above the midpoint of management's 45,000 to 55,000 barrels of oil equivalents per day (boepd) guidance for the current financial year. This view is supported by the de-risking of evacuation at OMLs 4, 38, & 41 and ongoing efforts to leverage Edo Refinery to arrest third-party evacuation concerns. We recall that H1'23 production was primarily supported by OML 40, wherein volumes rose by 24.3% YoY to 10,803 barrels of oil per day (bopd) due to improvement in uptime and delivery of new wells. The gains from this asset masked the weaknesses in OMLs 4, 38, & 41 and the smaller Eastern operation (OML 53). According to management, the H1 set-backs across OMLs 4, 38, & 41 and OML 53 reflected delays in the on-streaming of new wells (meant to offset the impact of assets' deterioration) in the former and evacuation challenges due to the unavailability of key deliverable lines in the latter.

After six consecutive quarterly losses, UACN rebounded into profit in Q2'23. The rebound mirrored improvements in EBIT and net finance income. The gains in the former were mainly driven by passthrough from higher firm-wide revenue due to price increases and volume growth in Paints, which masked the impact of soaring operating costs. Furthermore, the company recorded a net finance income of N2.9 billion, primarily bolstered by a foreign currency revaluation gain of ₦3.6 billion on the holding company's treasury investment portfolio, of which c.30.0% is denominated in foreign currency.

Guinness Nigeria Plc’s (GUINNESS) FY numbers showed mixed performance across key metrics. The renowned foreign extra stout brewer recorded a double-digit Revenue growth of 10.9% y/y to N229.44bn, amidst high inflationary pressure which has weakened consumer purchasing power. Despite a moderate rise in Cost of Sales (13% y/y to N144.7bn) and Operating expenses (13% y/y to N55.4bn), a net FX loss of N49.1bn resulted in a Pre- tax loss of N22.1bn compared with a Pre-tax profit of N23.6bn in FY 2022.

In its FY 2023 (12M ended 31-March-2023) earnings result, Flour Mills Nigeria Plc’s (Flourmills) revenue grew 32.3% y/y to N1.54tn from N1.16tn in FY 2022 (12M ended 31-March-2022). This was boosted by growth in all its revenue segments (food, agro allied, sugar and support services). On a q/q basis, Flourmill’s Revenue grew by 8.2% q/q to N425.69bn in Q4 2023 from N393.39bn in Q3 2022.