Nigeria | NGX

Recently, BUA Cement Plc ("BUACEMENT") filed its audited FY-2020 results. Despite substantial cost pressures, the cement maker saw a 19.1% and 19.4% y/y increase in PBT and PAT, respectively, to N78.9bn and N72.3bn. This was primarily driven by volume growth (+13.3% y/y), which supported topline (+19.3% y/y), and lower Net financing expenses (-28.3% y/y) over the period. We review the FY earnings and adjust our expectations for FY-2021 below.

Last week, in the domestic equities market, the bears dominated as the market saw sell-offs. Consequently, the NSE All-Share index fell 0.2% w/w to settle at 38,866.4 points, YTD loss worsened to -3.5% while market capitalisation declined to ₦20.3tn...

The first quarter of FY-2021 proved to be somewhat soft for equity investors trading the Nigerian market. In Q1-2021, the benchmark All Share Index (ASI) lost 3.0% q/q to print at 39,014.82 points. A slew of interesting events shaped the performance of the market through the quarter.

Last week, in line with our expectation, the local bourse failed to hold up gains from the previous week as a streak of profit-taking on large-cap stocks in Banking and Industrial goods as well as price adjustment for dividend on weighed on the market. Overall, the benchmark All Share Index (ASI) shed 0.8% w/w to settle at 38,916.74 points pushing YTD loss higher to 3.4%. Similarly, Market capitalization fell N156.7bn to print at N20.4tn. Nevertheless, the activity level rebounded as average volume and value traded improved by 18.1% w/w and 11.7% w/w to 361.2m units and N4.8bn.

In the previous week, the Monetary Policy Committee (MPC) held a 2-day meeting where committee members voted on potential policy changes. The MPC voted to maintain status quo on all its monetary policy tools, retaining the MPR at 11.5%, CRR at 27.5%, Liquidity ratio at 30.0% and the Asymmetric corridor of +100/-700 around the MPR. The decision to hold all policy parameters at current levels is intended to create a stable environment to allow for stronger economic recovery, as the recessionary pressures facing the country remain, as seen with the growing unemployment rate.

In its recently released FY-2020 audited financials, ARDOVA Plc (“ARDOVA” or “the Company”) reported a 3.1% y/y growth in revenue, printing at N181.9bn, from N176.5bn in FY-2019. Revenue growth was driven by increased sales of petroleum products, which grew by 3.4% y/y in FY-2020. Cost of sales grew at a slower pace, up 2.6% y/y to N169.7bn in FY-2020. As a result, gross profit recorded a decent 12.1% y/y growth to print at N12.1bn in FY-2020. However, Operating income dropped by 16.0% y/y to N4.1bn, largely driven by the 2019 high base due to gain on disposed assets recorded. As such, Profit before tax and Profit after tax declined by 37.6% and 52.6%, to N2.9bn and N1.8bn, respectively, in the period under review. Earnings per Share (EPS) fell 52% to N1.4 per share in FY-2020. The firm proposed a dividend of N0.19 per share. We review our forecasts for the company and present our outlook below.