.Banking sector revenue hits N3.96trn .Six petroleum marketing coys records N776.6bn revenue
Kayode Tokede
Dangote Cement Plc and 47 leading companies on the Nigerian Exchange Limited (NGX) recorded combined revenue of N8.9trillion in the first nine months of 2021 amid growth in Gross Domestic Product (GDP), THISDAY checks has revealed.
The 48 companies’ total revenue is 17.3 per cent higher when compared to N7.6 trillion recorded in nine months of 2020.
According to the National Bureau of Statistics (NBS), Nigeria’s Gross Domestic Product (GDP) grew by 4.03 per cent year-on-year (YoY) in real terms in the third quarter of 2021, showing a sustained positive growth over the last four quarters since the recession witnessed in 2020.
The bureau added that output contracted by -6.10 per cent and -3.62per cent in second quarter and third quarter of 2020 under the coronavirus pandemic
Meanwhile, analysts believe the growth in revenue by these 48 companies indicate that Nigerian companies have overcome the adverse impact of the coronavirus.
Analysis of the companies reports in nine months showed that Dangote Cement Plc gained 34.2 per cent increase in revenue to N1.02 trillion in nine months of 2021 from N761 billion recorded in nine months of 2020, while MTN Nigeria Plc’s revenue reached N1.21trillion in nine months of 2021, about 24 per cent increase when compared to N975.76billion recorded in nine months of 2020.
BUA Cement Plc recorded 19.3 per cent increase in revenue to N186.91billion in nine months of 2021 from N156.55 in nine months of 2020, while Lafarge Africa Plc grew revenue by nearly 22 per cent to N219.2billion in nine months of 2021 from N179.8billion recorded in nine months of 2020.
THISDAY finding revealed the growth in revenue of the two cement manufacturers reflected in the construction sector that contributed 9.26 per cent to nominal GDP in the third quarter of 2021, higher than the 7.23 per cent it contributed a year earlier and higher than the 8.74 per cent contributed in the second quarter of 2021.
Financial results of 14 banks and 10 insurance companies show that the combined revenue grew by nearly six per cent to N4.14 trillion from N3.9 trillion recorded in the corresponding period of nine months of 2020.
Although the likes of Guaranty Trust Holdings Plc (GTCO), FBN Holdings Plc and Stanbic IBTC Holdings Plc recorded decline in revenue, the combined banking sector recorded about 5.4 per cent increase in top line performance to N3.96 trillion in nine months of 2021 from N3.75trillion recorded in prior nine months of 2020.
GTCO in the period reported GTCO 3.5 per cent decline in revenue to N318.51billion in nine months of 2021 from N329.96billion reported in nine months of 2020, while FBN Holdings Plc’s revenue closed nine months of 2021 at N427.03billion, a decline of 2.8 per cent from N439.33billion reported in nine months of 2020.
In addition, Stanbic IBTC Holdings Plc revenue, among the 14 banks dropped significantly by 20 per cent to N146.6billion in nine months of 2021 from N183..29billion recorded in nine months of 2020.
The 10 insurance firms, AXA Mansard Insurance Plc, NEM Insurance Plc, AIICO Insurance Plc, among seven others recorded 19 per cent increase in revenue to close at N191.74billion in nine months of 2021 from N160.47billion in nine months of 2020.
The growth in revenue by these financial services companies gives a significant increase to finance and insurance sector’s contribution to the overall nominal GDP at 2.70 per cent in third quarter of 2021, higher than the 2.46per cent it represented a year previous.
Further analysis showed that a total of six petroleum-marketing companies recorded 34 per cent growth in revenue to N776.6billion in nine months of 2021, about 34 per cent from N579.6billion recorded in nine months of 2020.
Also, three Pharmaceutical companies grew their revenue by 27 per cent to N56.3billion in months under review as against N36.5billion recorded in prior nine months.
In the consumer goods sector, Nestle Nigeria Plc, Cadbury Plc and Nigerian Breweries Plc considered in this report recorded growth in revenue.
Nestle Nigeria gained 23 per cent increase in revenue to N261.59billion, while Cadbury Nigeria and Nigerian Breweries Plc gained 16.5 per cent and 32.15 per cent growth in revenue to N30.05billion and N309.28billion respectively.
Meanwhile, analysts have attributed the revenue growth recorded by listed companies in the months under review to ease on lockdown and opening of economy globally, stressing that steady increase in global oil price was another contributing factor.
On the impact of stimulus, analysts expressed that it has started reflecting in the companies’ performance and hoped it would be sustained barring unforeseen circumstances in domestic and global economy.
Speaking with THISDAY, an Economist & Private Sector Advocate, Dr Muda Yusuf noted that the growth in companies revenue is a reflection of ease on movement and steady increase in global oil prices.
He maintained that growth recorded by companies’ revenue is based on the rapid demand, stressing that the 2020 lockdown impacted on revenue growth and economy at large.
He said, “Of course the economy had it challenges in 2020 due to the lockdown and we have the opening this year which significant played a key role in revenue generated by Dangote Cement, among others.”
He highlighted that companies growth in revenue in nine months of 2021 was faced with depreciation of Naira, high cost of electricity, and ease of doing business challenges.
He was optimistic that the growth would be sustained adding that this will eventually translates into growth in GDP in 2021.
An economist and senior Lecturer, Lagos Business School, Dr Adi Bongo noted that high demand in an economy drives revenue and translates into growth in GDP.
He maintained that growth recorded in the cement sector, among other to be sustained throughout 2022 as companies are aiming to meet 202 deficit in production.
Reacting, analysts and Chief Operating Officer at InvestData Consulting Limited, Mr Ambrose Omordion said: “Revenue generated by companies in nine months of 2021 showed recovery of business activities in the economy as well as rise in global crude oil prices”
In his reaction, Analyst and Head, Investment Research & Business Development, Pac holdings, Mr. Wole Samuel said: “The performance of nine months results is mixed, “while some have impressive results especially the Cement companies and Telecoms companies, while Banking and Insurance have mixed results.
“The likely factors responsible for some of the companies’ low performance may be the combination of falling of naira value and rising of over head cost due to the fact that they operated in full operations with the attendance of full staff unlike the previous year when most of the staff were at home.”
On banks, performance, he said: “Tier – 2 are relatively better in terms of profit especially by Fidelity Bank and Sterling Bank. It shows that Tier- 2 is catching up with the challenge and hope to meet expectations.”
