40 Kobo from an Elephant

Good morning and welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.

The newsletter is divided into two:?

Green White Green—focused on the Nigerian stock market.?

Star-Spangled Banner—focused on the US stock market?

Before we dive in, we wish you a Happy Children’s Day. Go out and give yourself a treat no matter how small.

Green White Green Last Week

40 kobo from an elephant

FBN Holdings (parent company of First Bank) released its results for the financial year ended December 2023. They came in a bit disappointing from a dividend perspective. The firm has proposed a 40 kobo dividend which is the smallest of all the FUGAZ banks (FUGAZ is an acronym for FBN Holdings, UBA, GTCO, Access and Zenith, the big 5 banks in the country).

UBA paid a total dividend of N2.80 for FY 2023.?

GTCO paid a total dividend of N3.20 for FY 2023.

Access Holdings paid a total dividend of N2.10 for FY 2023.

Zenith Bank paid a total dividend of N4 for FY 2023.?

There was top line growth.?

Revenue moved from N815 billion in 2022 to N1.5 trillion in 2023. Up 95.7% year-on-year.

Profit after tax rose from N136 billion in 2022 to N310 billion in 2023.Up 127.8% year on year.?

Impairments (provision for bad loans) went up sharply from N68.6 billion in 2022 to N227 billion in 2023. On the plus side, there was a marked increase across all the banks. They used some of the humongous FX gains they made last year as a buffer.?

FBN Holdings, however, has a history of huge impairments, making it a red flag. In the last decade, the firm has impaired over N500 billion in loans.?

There would be more clarity on this in the earnings call scheduled for this Tuesday.?

VFD Group dropped its FY 23 and Q1 2024 earnings. In FY 23, it recorded a N750 million loss after tax due to higher investment expenses.?

In Q1 2024, profit after tax jumped from N220 million in 2023 to N2.2 billion in 2024. Key driver was a bounce in other investment income.?

International Breweries rights Issue of 161,172,395,100 ordinary shares of 2 kobo each at N3.65 per share, on the basis of six (6) new ordinary shares for every one (1) existing ordinary share held as of May 2, 2024. It opened on May 21, 2024, and will close on June 10, 2024.

The firm also held a facts behind the rights issue session at the stock exchange.?

Airtel Africa has repaid a $550 million bond that matured on May 20, 2024. This payment was made exclusively out of cash reserves at the holding company (HoldCo) and means the company has now reached the significant milestone of a zero-debt position at HoldCo.

Nigeria Infrastructure Debt Fund Series 10 Offer opened on May 15, 2024 and is scheduled to close on June 13, 2024. The issuance of 185,000,000 units of N100 each issued at N109.43 represents the fund’s tenth (10th) capital raise since inception in 2017 and the second since its listing on the Nigerian Exchange Limited. The proceeds from the Offer will be applied towards infrastructure loans approved by the Fund Manager’s Investment Committee.

Another extension

Seplat Energy has extended the share sale and purchase agreement for the acquisition of ExxonMobil’s share capital of Mobil Producing Nigeria Unlimited, in order to preserve the transaction pending the resolution of certain legal proceedings and receipt of applicable regulatory approvals.?

There has been no material change in terms of the announcements dated February 25, 2022 and May 24, 2023. The headline consideration, effective date and the contingent payment structure remain unchanged.

Still on Seplat

On May 17, 2024, shares awarded to the CEO Roger Brown between 2014 and 2022, under the terms of the Long Term Incentive Plan vested. Roger Brown now holds 4,006,168 ordinary shares in Seplat Energy PLC (937,278 were sold to meet tax obligations) which sufficiently satisfies the minimum shareholding requirement mandated by the shareholder approved remuneration policy.?

The shareholding ensures that Roger Brown's interests in the Company are closely aligned with those of other shareholders in Seplat Energy.?

Green White Green This Week

FBN Holdings has an earnings call scheduled for Tuesday. The firm’s first quarter 2024 results should also be out within the week.

Transcorp, Wema Bank, UPDC, Abbey Mortgage Bank and Dangote Cement will be holding their AGMs during the week.

Star-Spangled Banner Last Week

Nvidia crossed the $1,000 mark for the very first time after its results came in better than expected.?

Ethereum Exchange Traded Funds (ETFs) surprisingly got approved. We use the terms surprisingly because it was such a hassle to get Bitcoin ETFs approved.?

What’s happening this week??

Star-Spangled Banner This Week

Today is a memorial day, so the stock market is closed.?

Earnings wise, it's a fairly quiet week. Arguably the most prominent firm dropping numbers is Costco. Others include Dell, Salesforce, Chewy’s, Okta and Capri Holdings