Many a Hole

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?

Green White Green Last Week?

Why the title “Many a Hole”??

It is earnings season and companies have begun filing their audited results for the 2023 financial year (most of them run from January to December 2023). A commonality has been a spike in finance costs driven by the devaluation that occurred in June last year.?

The jump has led to losses, sharply reduced profit and in some cases (such as MTN Nigeria and Nestle Nigeria) wiping out of share capital and retained earnings. That in turn means no dividends

N40 billion hole

MTN Nigeria released its audited results for the 2023 financial year. While many headlines choose to focus on the N137 billion loss after tax or the higher finance costs due to the movement in the exchange rate, retail shareholders would be pained by the absence of a final dividend.

The reason no final dividend (a dividend paid at the end of a company’s audited financial year) was declared was because it has N40.8 billion in negative equity due to the losses. It can only pay a dividend once that becomes positive.?

The telco generates a decent amount of cash on a quarterly basis (the further slide in the exchange rate however means Q1 2024 could be as ugly as Q2 2023, when it made a bit over N20 billion as profit).?

All things being equal, shareholders can be hopeful of a small dividend for FY 2024/return to dividend payment in FY 2025.?

Beyond the tales of doom, there were a few bright spots.?

Active data users increased by 12.7% to 44.6 million

Active MOMO PSB wallers increased by 163.2% to 5.3 million.?

Dangote Sugar

Dangote Sugar recorded a N76.7 billion loss after tax, also due to the movement of the official exchange rate in June last year.?

While revenues were up from N403 billion in 2022 to N441 billion in 2023, there was a slight softness in revenue made from the Eastern segment. It dipped from N16.7 billion in 2022 to N15.6 billion in 2023.?

Dangote Cement dipping into reserves

Dangote Cement was also hit hard by the foreign exchange losses, but it was helped by lower taxes. The company made a profit after tax of N455 billion, much higher than the N375 billion it made in the 2022 financial year.?

The company has declared a N30 dividend, indicating it would be dipping into its reserves as it earned N26.47 per share last year.

What of Lafarge??

Profit after tax dipped slightly by 4.7% due to a jump in taxes. Profit after tax fell from N53.6 billion in 2022 to N51.1 billion in 2023.?

The company has proposed a N1.90 dividend.?

BUA Cement’s profit after tax dropped sharply by 31.7% (again due to FX losses) from N101 billion in 2022 to N69 billion in 2023. The firm has proposed a N2 dividend.?

Airtel share buy-back?

Airtel Africa commenced its share buy-back programme, The first tranche commenced on March 1 and will end on or before August 31, 2024. A maximum of $50 million worth of shares will be repurchased.?

The sole purpose of the buy-back programme is to reduce the capital of the company. As such, all shares purchased under the buy-back programme will be cancelled.

No repurchases will be made on the Nigerian Stock Exchange.?

Green White Green This Week?

Dangote Cement and MTN Nigeria will be holding analyst calls (today) following the release of their results.

Today, Transcorp Power shares will be listed by introduction on the NGX.

There will be a “Facts Behind the Listing” at NGX Group House at 2:45pm, where the management of Transcorp Power Plc, led by the chief executive officer, Mr. Peter Ikenga, will provide information to trading license holders, analysts, press and investors about the listing and the company.?

Transcorp Group will continue to maintain a significant holding in Transcorp Power Plc.??

Star-Spangled Banner Last Week?

At this point, there seems to be nothing stopping the higher highs being experienced in US equities. The S&P 500 and NASDAQ Composite indexes both closed at fresh highs. Click on the links embedded to see a list of the respective stocks.?

Moving on?

After spending billions on research, tech giant Apple has reportedly decided to stop work on its electric car project.?

Star-Spangled Banner This Week?

Earnings wise, it is a fairly quiet week.?

From the retail segment, Target and Ross Stores will be dropping their most recent quarterly numbers on Tuesday.?

From the tech space, CrowdStrike and Box will release their quarterly earnings.?

The most anticipated number to watch out for will be unemployment figures for the month of February. The economy is in a fairly healthy space. If the numbers come in higher than expected, it means the economy is slowing. That gives more impulse to the Fed (US Central Bank) to cut interest rates.?