Consumer goods firms beat recession, revenue up by N160bn
Manufacturing companies listed in the Nigerian Stock Exchange’s top 30 index gained over N160 billion in revenue in the 2016 full year financial statements despite foreign exchange devaluations and the difficult micro-economic environment that impacted sales.
Daily Trust analysis of 13 manufacturing concerns with the index, saw a total increase in revenue from N888 billion in 2015 to N1.05 trillion in 2016, representing a growth of 18 per cent.
The analysis also revealed that Profit After Tax grew by N84.6bn from N210bn in 2015 to N294bn in 2016, representing a growth of 40 per cent.
The findings is consistent with an earlier analysis by the newspaper which also revealed that banks quoted in the NSE posted a cumulative N504bn profit in 2016, an increase of N61.3bn (equivalent to 13.8 per cent) over the N443bn recorded in 2015.
The findings also revealed that 16 banks grew their cumulative gross earnings (revenue) from N3.6tr to N3.7tr - an increase in earnings of N88.3bn, representing a 2.4 per cent growth.
After more than a decade of strong GDP growth, Nigeria’s economy fell into recession in 2016, with the World Bank estimating that GDP contracted by 1.7%. Falling oil prices reduced government revenues at national and state levels, resulting in delays to salary, payments to contractors and a reduction in infrastructure investment.
The associated devaluation of the naira and the limited liquidity of currency markets created additional pressures for consumers who experienced falling disposable income and inflation higher than 18% in the final months of the year, reaching 18.55% in December. In addition, a resurgence of militancy in the south of the country led to oil and gas shortages as pipelines were attacked, resulting in shortages of power and fuel.
This shows that overall, investors’ returns outperformed inflation while beating recession. Companies in this batch, the analysis showed, included Cadbury Nigeria Plc, Dangote Cement Plc, Vitafoam Plc, Lafarge Africa Plc, 7up Bottling Company Plc, Flour Mills Nigeria Plc, Northern Nigeria Flour Mills, NNFM Plc, Honeywell Flour Plc, PZ Cussons Nigeria Plc and Unilever Nigeria Plc. Others were Nestle Nigeria Plc, Union Dicon, Portland Paint, Berger Paint, May and Berger and Okomu Oil.
Sectoral performance of the corporate growth, the analysis found, was led by banking sector where the breakdown revealed that five banks - GTB, Access, Zenith, Stanbic IBTC and UBA - recorded a total of N1.8 trillion revenue in 2016.