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Here is Afrinvest’s take on First Bank’s recently released half year earnings report. Earnings Update Report on First Bank Plc which highlights the latest interim results and an update on our Full Year ’10 earnings outlook on the company. Q2’10 Results: First Bank reported a 6.7% decline in gross earnings to N122.3bn (US$812.6m) from N131.1bn [...]
Below are the research reports by Afrinvest on the recently released reports for Unilever, Fidson Healthcare, Berger and Oando who all recently released their results:
Glaxo Smithkline FY 2009 - Vetiva (156)In the past 2 weeks, Lafarge WAPCO, Total PLC, First Bank, and Nestle and Mobil have released their results. Here are the analyses of their results by ARM, Afrinvest, and FSDH:
First Bank Q1 2010 (260)
<blockquote>
First Bank of Nigeria Plc - Full Year ’10 earnings outlook on the company.
Highlights:
Q1’10 Results:
* First Bank reported a PBT of N15.4bn, from a loss position of N9.8bn for the group as at end of March 2009 .
* Total loans and advances went up by 67.7% to N1.3tn (US$8.6bn) from N752.0bn (US$5.0bn) reported in March 2009 and 15.8%increase from N1.1tn reported for the period ended December 2009.
* Deposits grew by 18.0% to N1.4tn (US$9.3bn), while the deposit ratio was up to 94.0% from 64.0% and 85.0% reported for March and December 2009 respectively.
FY’10 Outlook:
* We remain concerned about the banks efficiency ratios especially its cost-to-income ratio.
* We however see scope for valuation appreciation, with a Price to Book Value of 1.5x as against peer average of 1.7x.
* We therefore maintain a positive outlook on First Bank as we expect the Bank to leverage its huge risk portfolio to book some healthy earnings.
* On this basis, we hereby upgrade our recommendation on the bank to ACCUMULATE at current valuation as we expect the ex-div price to settle around N18.25 (ex-div) over the next 12 months.</blockquote>
Mobil PLC FY2009 (231)
<blockquote>
Mobil Plc – Full Year ’10 earnings outlook on the company.
Highlights:
FY’09 Results:
* Mobil’s turnover was down by 7.1% to N62.0bn from N66.7bn reported in the previous year.
* PBT and pre-tax margins however went up by 27.8% and 6.6% respectively.
* The pre-tax margin of 6.6% is the company’s best in the last four years; this suggests that the recent strategic restructuring embarked on by management is paying off.
FY’10 Outlook:
* Management’s feedback suggests that Mobil will be able to sustain its renewed cost efficient operations while diversifying into other high margin opportunities.
* We expect a modest improvement in performance for FY2010 with an estimated turnover of N68.2bn.
* On this basis, we upgrade our recommendation on Mobil to an ACCUMULATE at current valuation, as we expect the price to settle around the N198.75 mark over the next 12 months.</blockquote>
Nestle Q1 2010 (334)
<blockquote>
Nestle (Nigeria) Plc – Full Year 2010 earnings outlook on the company.
Highlights:
Q1 ’10 Results:
* Nestle reported impressive earnings growth with remarkable profit margins.
* Turnover went up by 24.2% to N17.6bn (US$117.1m); PBT also grew by 52.1% to N4.2bn (US$27.7m).
* The results show a match in turnover and recent investment capacity.
FY ’10 Outlook:
* The company remains committed to place their brand ahead of competitors through innovation and renovation.
* We therefore forecast FY 2010 PBT and PAT of N16.8bn (US$111.6m) and N11.4bn (US$75.7m) respectively.
* Our recommendation is to REDUCE rather than sell at current valuation, as we expect the illiquidity of the stock to support the current valuations, with the intrinsic value indicating a range of N240.19 – N292.02.
</blockquote>
Total Q1 2010 (223)
<blockquote>Total Plc – Full Year ’10 earnings outlook on the company.
Highlights:
Q1’10 Results:
* Total reported a relatively flat turnover of N42.1bn when compared with N43.0bn reported in the previous year.
* PBT and pre-tax margins was up by 168.8% and 7.4% respectively.
* The pre-tax margin of 7.4% is the company’s best since Q1‘02; this suggests improved efficiency amidst an increasingly challenging operating environment.
FY’10 Outlook:
* We have reviewed our initial forecast for Total’s top-line numbers for FY 2010 downward by 7.5% with revised estimate sales of N182.0bn.
* We still remain positive on the company’s ability to maintain a healthy profit margin and forecast a N7.3bn pre-tax profit for FY2010.
* On this basis, we reiterate our ACCUMULATE recommendation on Total with a revised 12 month price target of N217.75 indicating an 11.7% upside potential.</blockquote>
In the past 2 weeks, the following companies have released either their full year or quarterly results.And the some of the stockbrokers (FSDH, Afrinvest, ARM) have prepared some analysis of their results. The highlights and results are below:
FSDH – Nigerian Aviation Handling Company Plc: Interim Results – Q3, Sept. 2009
FSDH - Nigerian Aviation Handling Company Plc: Interim Results – Q3, Sept. 2009 (295)
FSDH – PZ Cussons Plc: Interim Results – Q3 2010
FSDH - PZ Cussons Plc: Interim Results – Q3 2010 (256)
ARM – Nestlé Nigeria Plc FY 09
ARM - Nestlé Nigeria Plc FY 09 (915)
Afrinvest – GTB – Full Year ended 31 December 2009
Afrinvest - GTB - Full Year ended 31 December 2009 (465)
<blockquote>FY’09 Results:
* GTBank reported a 61.6% growth in gross earnings to N162.6bn (US$1.1bn) from N100.6bn (US$669.4m).
* Total loan and advances grew by 35.4% to N563.5bn (US$4.6bn).
* The bank’s operating income increased by 22.0% to N188.2bn (US$1.3bn).
* Non-Performing Loans (NPL), as a proportion of gross loans, grew from 2.0% in FY ‘08 to 12.0%.
* Pre-tax profits went down 20.9% to N27.9bn as further provisioning for risk assets eroded profits.
FY’10 Outlook:
* We believe that GTBank will continue to demonstrate a healthy potential for earnings growth and improved operational efficiency.
* We expect the bank to leverage on its strong brand and its perceived conservative business model to capture more market share in order to increase current profitability levels.
* While we are positive on the bank’s outlook, as we expect it to maintain its history of strong asset growth, we are however concerned with the velocity of liability generation which needs to be at par with asset growth.
* On this basis, we establish a 12-month price target of N25.70 (ex-div), indicating a 12.5% upside based on its market price as at April 08, 2010 (N22.80) and hereby reiterate our ACCUMULATE recommendation on GTBank, as we believe that a greater part of its upside potential has been priced in at current valuation.</blockquote>
Afrinvest – Oando Nigeria Plc – FY09
Afrinvest - Oando Nigeria Plc - FY09 (254)
<blockquote>FY’09 Results:
* Oando reported a relatively flat turnover of N336.9bn when compared with N339.4bn reported in the previous year.
* PBT and pre-tax margins went up by 25.8% and 4.0% respectively.
* The pre-tax margin of 4.0% is the company’s best in the last five years; this suggests improved efficiency amidst an increasingly challenging operating environment.
FY’10 Outlook:
* We are however positive about the company’s outlook as we expect it to leverage on the high margin potential of producing upstream assets to deliver additional top-line growth.
* We also expect that proceeds from its recent capital raising exercise will be used to pay down on some existing debt.
* On this basis, we upgrade our recommendation on Oando to a BUY at current valuation, as we forecast the ex-div price to settle within a N97.50 – N102.50 range over the next 12 months.</blockquote>
Afrinvest – PZ Cussons (Nigeria) Plc – Q3 2010
Afrinvest - PZ Cussons (Nigeria) Plc - Q3 2010 (368)
<blockquote>FY’09 Results:
* PZ Cussons reported improved profit margins despite reduced turnover.
* Turnover fell by 4.6% to N44.2bn (US$293.6m), while PBT grew by 23.0% to N5.3bn (US$35.0m).
* The company embarked on cost containment strategies as reflected by the growth in PBT margins from 9.3% in Q3 ’09 to 11.9% in Q3 ’10.
FY’10 Outlook:
* Although we recognize the potential impact of the company’s cost reduction strategies on its earnings, we however note that the increased strain on sales volumes poses a major downside risk.
* On this basis, we forecast FY 2010 PBT and PAT of N8.6bn (US$56.9m) and N6.0bn (US$39.8m) respectively.
* Our recommendation therefore is to REDUCE at current valuations as we forecast a FY’10 (12 month) price target of N26.61. </blockquote>
Afrinvest – Zenith Bank Plc – 3 Months Ended March 31, 2010:
Afrinvest - Zenith Bank Plc - 3 Months Ended March 31, 2010 (315)
<blockquote>Q1’10 Results:
* Zenith Bank reported a 4.6% growth in gross earnings to N55.0bn (US$365.9m).
* PBT went up by 12.3% to N13.2bn (US$87.8m), with a 6.7% increase in profit margin to 24.0%.
* Deposits grew by 9.0% to N1.3tn (US$8.6bn), while the bank still maintains a loan to deposit ratio of 52.0%.
FY’10 Outlook:
* We expect Zenith Bank to continue to leverage on its market share in the corporate banking sector.
* We therefore review our full year gross earnings forecast to N255.1bn (US$1.7bn), and PBT to N54.1bn (US$359.7m).
* We also establish a 12-month price target of N19.00 and hereby re-iterate our ACCUMULATE recommendation on Zenith Bank at current valuation.</blockquote>
UBA released its FY09 result for the 15-month period ended December 2009. The highlights are:
• UBA reported gross earnings of N246.7bn (US$1.6bn) for the 15 months ended 31 December 2009, representing a 45.6% increase from the corresponding 12 month period to September 2008.
• Total assets decreased by 7.5% from N1.7tn (US$11.5bn) in 2008 to N1.5tn(US$10.3bn) as at FY2009
• Total loans and advances grew by 40.6% to N606.6bn ($4.0bn) while its loan to deposit ratio went up to 48.7% from 32.4% recorded in the prior year. • Operating income was up 46.0% from N128.2bn (US$852.6m) to N187.1bn (US$1.2bn)
• Deposits and other accounts decreased by 6.6% from N1.3tn (US$8.9bn) as at September 2008 to N1.2tn(US$8.3bn)
• Keeping loan quality at an acceptable limit seemed to be a challenge as Non-Performing Loans (NPL) (as a proportion of gross loans) went up from 4.0% in FY2008 to 8.0%
• The exceptional item reported included a net charge of N38.2bn (US$254.0m) for diminution in the value of assets which significantly hampered the bank’s bottom-line earnings potential; After-Tax Profits went down 94.9% from N41.2bn(US$274.4m) in 2008 to N2.1bn(US$14.1m) for FY2009.
Afrinvest, ARM and Meristem each prepared analyses of the company’s results:
Afrinvest - UBA FY 2009 Earnings Update (446).
Here are some Stockbrokers’ Company Analyses by Afrinvest, Meristem and Vetiva.
Afrinvest Company Earnings Update - African Petroleum Q3 2009 - SELL (372) Meristem Company Analysis - Total Nigeria (672) FSDH Company Analysis - Fidson Healthcare - Q2 2009 (539) FSDH Company Analysis - Neimeth PLC - Q3 2009 (336) FSDH Company Analysis - Northern Nigeria Flour Mills Plc - Q3 2009 (1784) Meristem Company Earnings Update - African Petroleum Plc - Q3 2009 (326) Meristem Company Earnings Update - Ikeja Hotel Plc - Q3 2009 (312) Vetiva Capital - March 2010 Company Update (287) Vetiva Capital - Lafarge Cement Wapco - Q3 2009 (338) Afrinvest Company Earnings Update - Zenith Bank - 15 month ended December 2009 (374)Here are Meristem Securities’ analyses of the recently released results of UPL, Fidson, Nestle, and Nigeria Breweries:
Fidson Healthcare – H1 – NEUTRAL
United Press Ltd (UPL) – Q3 – OVERWEIGHT
Nigerian Breweries – FY 09 – NEUTRAL
Nestle Nigeria – FY 09 – NEUTRAL
Equity Research Report - Fidson Healthcare (482).
Equity Research Report - UPL (232).
Equity Research Report - Nigerian Breweries (463).
Equity Research Report - Nestle (766)
Here are the analyses of the Q2 results for PZ Cussons and Guinness Nigeria PLC by FSDH Securities and Afrinvest respectively:
<strong>FSDH – PZ Cussons:</strong>
<blockquote>In arriving at a fair value for PZ, we estimated TO, Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for the FY ending May 31, 2010. We project a TO of N69.76bn, based on our view that the TO will contract by 13.85%, over the previous year. We project EBITDA of N9.50bn based on EBITDA margin of 13.61% and a PAT of N6.37bn based on a PAT margin of 9.13%. We used 3.18bn Ordinary Shares currently in issue. The Forward Earnings Per Share (FEPS) generates N2.01. We estimated the Dividend Per Share (DPS) of N1.04 based on a dividend payout of 51.91%. Applying Enterprise Value (EV)/EBITDA multiple of 9.88x, a P/E multiple of 12.50x, we arrived at N29.54 per share using EV/EBITDA multiple and N25.07 per share using price earnings multiple. Applying a weight of 55% on N29.54 and 45% on N25.07, we arrived at N27.53 per share, which is our fair value. The forward earnings yield and dividend yield based, on our fair value generate 7.29% and 3.78% respectively. <strong>We therefore place a HOLD on PZ stock at the current market price of N26</strong>.</blockquote>
FSDH - PZ Cussons -Q2, 2009 (615)
<strong>Afrinvest – Guinness Nigeria</strong>
<blockquote>* Guinness Q2’10 results saw turnover up by 23.8% while both PBT and PAT were down by 10.0% by 10.8% respectively.
* Operating expenses saw further increases on the back of an extensive marketing drive and on-going capacity additions
* Going forward, we expect to see top and bottom line growth resulting from the marketing initiative as well as capacity expansion
* <strong>Our recommendation is NEUTRAL with a FY’10 (June 30) price target of N139.23</strong></blockquote>
Afrinvest - Guinness Q2 2010 Earnings Update (254)
In: companyanalysis
29 Jan 2010Vetiva Securities has prepared a very comprehensive analysis of Oando PLC describing the operations, SWOT information etc. Read below:
Vetiva - Company Report - Oando PLC (2021)In: companyanalysis
29 Jan 2010Here is FSDH Securities’ Analysis of the Cement Company of Northern Nigeria’s Q2 2009 Results:
<blockquote>In arriving at a fair value for CCNN, we estimated TO, Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for December 2009. We estimated a TO of N13.83bn, based on a growth of 40%, over the previous year. We project EBITDA of N2.966bn based on EBITDA margin of 17.45% and a PAT of N2.42bn based on a PAT margin of 17.50%. We used 1.256bn Ordinary Shares in issue. The estimate Earning Per Share (FEPS) generates N1.93k. We estimated a Total Dividend Per Share (DPS) of N1.25k (having paid an interim of 80k we expect a final of 45k) based on a dividend payout of 65%. Applying Enterprise Value EV/EBITDA multiple of 9.25x, a P/E multiple of 10.5x, we arrived at N20.46k per share using EV/EBITDA multiple and N20.22k per share using price earnings multiple. Applying a weight of 50% each to the valuation results we arrived at 20.34k which is our fair value. The estimate earnings yield and dividend yield based on our fair value generate 9.47% and 5.78% respectively while the estimate P/E ratio generates 10.56x. We therefore place a <strong>BUY </strong>on Cement Company of Northern Nigeria (CCNN) stock at the current market price for both capital appreciation and dividend payment.</blockquote>
FSDH - Company Analysis - CCN Q2 2009 (512)Here is Vetiva’s analysis of 7-Up Bottling Company’s Q2 2009 results:
In: companyanalysis
31 Dec 2009Here are the analysis and recommendations based on the most recent results of Glaxo Smithkline and NBC. The summaries are below:
NBC:
<blockquote>In placing a fair value on the Ordinary Shares of NBC, we adjusted our earlier forecast for the FY 2009 and parameters to reflect current market developments and based on its latest results. We estimated TO, Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for December, 2009. We project a TO of N91.28bn, based on a growth rate of 13.99% over the previous year. We project EBITDA of N7.31bn based on EBITDA margin of 8% and a PAT of N2.94bn based on a PAT Margin of 2.12% and writing back the N1bn insurance claim. We used 1.308bn Ordinary Shares that we expect to be in issue as at December 2009. The Forward Earnings Per Share (FEPS) generates N2.24. We estimated Dividend Per Share (DPS) of N0.90 based on a dividend payout of 40% as we believe the company will increase its historical dividend payout ratio to compensate shareholders for its last year lackluster performance. Applying Enterprise Value EV/EBITDA multiple of 4.85x, a P/E multiple of 12x, we arrived at N20.62 per share using EV/EBITDA multiple and N26.91 per share price using earnings multiple. Applying a weight of 55% on N20.62 and 45% on N26.91, we arrived at N23.45 per share, which is our fair value. The forward earnings yield and dividend yield based on our fair value generate 9.56% and 3.83% respectively. We therefore place a <strong>BUY</strong> on the share price of NBC at the current market price.</blockquote>
NBC -Q3, September 2009 (358)
Glaxo Smithkline:
<blockquote>In placing a fair value on the Ordinary Shares of GlaxoSmith, we maintained our earlier top-line forecast, but adjusted our bottom-line forecast to reflect the company’s improved efficiency. Also, we adjusted our earlier parameters to reflect current market developments and its latest results. We estimated Turnover (TO), Earning Before Interest Tax Depreciation and Amortization (EBITDA) and PAT for December, 2009. We maintain our earlier estimate of the TO of N15.04bn as released in our Q1 2009 result. We project EBITDA of N3.06bn based on EBITDA margin of 20% and a PAT of N1.93bn based on a PAT Margin of 12.81%. We used 956.70mn Ordinary Shares that we expect to be in issue as at December 2009. The Forward Earnings Per Share (FEPS) generates N2.02. We estimated Dividend Per Share (DPS) of N0.97 based on a dividend payout of 48.25%. Applying Enterprise Value EV/EBITDA multiple of 7.60x, a P/E multiple of 10.22x, we arrived at N24.29 per share using EV/EBITDA multiple and N20.60 per share price using earnings multiple. Applying a weight of 55% on N24.29 and 45% on N20.60, we arrived at N22.63, which is our fair value. The forward earnings yield and dividend yield based on our fair value generate 8.91% and 4.30% respectively. We therefore place a <strong>HOLD</strong> on the share price of GlaxoSmith at the current market price.</blockquote>
GlaxoSmithKLINE -Q3, September 2009 (353)
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