Smiles at Zenith Bank

Good Morning 

Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market. 

How was your weekend? Happy New Month 

Green White Green Last Week 

The Nigerian Stock Exchange (NSE) closed in the red last week. The NSE All-Share Index declined by 0.96%. The index measures the average performance of stocks for the week. Some stocks will do better or outperform the index. Some stocks will do worse or perform below the index. 

Academy Press was the best performing stock last week. It gained 17.1% to close at ?0.41. LASACO Assurance led last week’s losers. It declined by 26.7% to close at ?1.23. 

Earnings season kicked off properly with a few big names releasing their audited full-year results. Full-year results are for the 12 months of a company’s financial year. Most companies run a January to December calendar. Hence, you have lots of companies releasing their results from late February to April. 

Nestle Nigeria PLC released its audited full-year 2021 earnings. Revenue rose by 1% from ?284 billion in 2019 to ?287 billion in 2020. Profit after tax, however, declined by 14% from ?45.6 billion in 2019 to ?39.2 billion in 2020.

Why did the company do so poorly? Nestle is not growing its revenue as fast as it should. Finance costs and cost of sales were also much higher. Finance costs rose by 100% due to a ?1.7 billion foreign exchange loss. The cost of sales rose from ?155 billion in 2019 to ?167 billion in 2020, up by 7.6%. 

It’s not all bad news, though. The company will be paying a final dividend of ?35.50 per share. Last year, it paid an interim dividend of ?25. An interim dividend is one paid before the end of a company’s financial year. So it will be paying ?60.5 in total. 

Zenith Bank released its full-year 2020 results. It made ?696 billion in revenue, up by 5.2%, from the previous year. Profit after tax went up by 10.6% from ?208 billion in 2019 to ?230 billion in 2020. 

Shareholders have good reason to smile, though. The bank increased its dividend payout by 11.1% from ?2.70 to ?3. It will be paying a final dividend of ?2.70. Last year, it paid an interim dividend of 30 kobo. 

MTN Nigeria released its full-year 2020 earnings yesterday. It made ?1.3 trillion as revenue, a 14.7% increase from the ?1.1 trillion it made in 2019. Profit after tax, however, rose at a snail pace. It went up by 0.9% from ?203 billion in 2019 to ?205 billion in 2020. 

Shareholders have cause to smile as well, though. The company has proposed a final dividend of ?5.90. Last year, it paid an interim dividend of ?3.50. In total, ?9.40 will be paid as dividends for the 2020 financial year, an 18.7% increase from the previous year. 

Mobile subscribers grew by 19% from 64.3 million in 2019 to 76.5 million in 2020. 

When companies release earnings, they usually hold an analyst and investor call which provides them an opportunity to give more insight into their plans ahead. MTN Nigeria will hold one on March 3, 2021. You can dial in and ask questions if you have. 

Star-Spangled Banner Last Week 

Stocks fared poorly in the United States last week. The three major indices declined. The NASDAQ composite index fell sharply. Closing down at 4.92%. The Dow Jones Industrial Average (commonly known as the Dow) fell by 1.78%. The S&P 500 index also fell by 2.45%.

A few popular firms released their earnings within the week. 

Salesforce made $21.2 billion as full-year 2021 revenue and earnings per share of $4.48. Square (the company behind Cash App) made $9.4 billion in revenue and earnings per share of $0.44. 

Green White Green This Week 

Earnings season continues. We should see a number of key firms release their full-year audited numbers. That also means dividends are on the way. If you have not sorted out your e-dividend registration, this would be a good time to do so. Here is a guide on how to do so. 

Seplat Petroleum will release its full-year 2020 numbers this morning, and hold a conference call as well. Vitafoam will be having its Annual General Meeting on March 4, 2021. 

Star-Spangled Banner This week 

We don’t expect much of an upside this week. A couple of key firms will be releasing earnings during the week, mostly from the retail space. They include Kroger, Big Lots and Costco. Berkshire Hathaway, NIO, and Zoom will be releasing their earnings today. 

The February jobs report will also be released on Friday. 

Today is the first of March. Did you have any financial goals for last month? Did you smash them? Here is a guide on how to achieve your financial goals in 2021. 

Having a plan is the first step. Beyond that, you need to get the knowledge. Our community is a great place for that. You can sign up here.

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