The market last week was bombarded with Q4 results of companies listed on the Nigerian Exchange. To a large extent, the results released so far were fantastic as growth were recorded in top line and bottom line figures of most company. The market is obviously set for a rally in the coming weeks as most of the results started to hit the market in multiples when the market had closed on Friday.
Commenting on the performance of Q4 2021 earnings released to the market, the MD/CEO of Global View Capital Limited, Aruna Kebira stated thus:
“Earnings released to the market so far has been fantastic. That is what is driving the market. It shows that Nigeria Economy has got out of the grip of covid 19, it means that it has discounted covid-19. It shows that everything is in order.
Most of the results released so far like Ecobank, Guinness, Okomu recorded growth, and they are unaudited. No matter what the auditors are going to do, they can’t cut back Okomu’s earnings per share form N14.67 to N11.
It shows that the market and the economy are matching forward.
People say they are hoarding information from the National Bureau of Statistics. But when they said Nigeria was in recession, people agreed. Now they said economy is growing, people don’t want to agree. Is it not the same pot they are using to cook the same ingredient? Why do you think the Monetary Policy Committee is holding MPR constant? You do not change a winning formula. They tinkered with it when the economy was in recession. I can remember in September 2020, the economy was -3.62%. The moment they tinkered with the MPR, it grew 0.11% by December that year and it has not looked back.
Emefiele as much as possible has tried to tinker with both monetary policy and their intervention. Intervention is Fiscal Policy whether you like it or not; but it will not be so classified. With their intervention, they have been able to hold the economy.
Yes, we are still borrowing. That is not the problem of the CBN. CBN don’t control oil. What is happening in Shell and NNPC has something to say about what is happening to Oil money. CBN has been able to balance the rate. CBN try as much as possible to intervene in the forex market to make sure that inflation and dollar rate is controlled.
Outlook for February
The market is on the move. We are going to see a better paying dividend period. All the stocks that are good are going to move up in February. Most of the results were released at the close of market on Friday. For instance Okomu is not going to stop at N142. Guinness that did not rise up to N50 will continue to grow. Julius Berger will continue its rally. Ecobank, though it has got to N13.10 will not stop at that price. Access Bank is coming; it got to N10 but eventually closed at N9.85 of Friday. We have not heard of Zenith Bank and GTCO. UBA is there. In fact, all the fundamentally strong stocks are good to go for the month of February.
Investors should position themselves now against dividend paying time. They don’t pay dividend from unaudited results, but it gives you the direction. Okomu paid about dividend in 2020. If they can pay N7 out of N8 earnings per share, can’t they pay N12 dividend out of N14 earnings per share? Is that not enough for somebody to position in? Julius Berger paid 40 kobo dividend in 2020, with this good result they are likely going to pay a better dividend”.
Just to mention a few among many other Q4 result released to the market in the course of last week, the following are worthy of notes
FIDSON
Fidson grew its turnover by 68.22% to N30.743 from N18.276 billion reported the previous year.
Profit after tax grew by 155.52% to N3.079 billion from N1.205 billion profit reported the previous year.
Earnings per share of Fidson increased to N1.48 from the EPS of N0.58. This translates to 155.52% growth year on year.
At the share price of N7.6, the P.E ratio of Fidson stands at 5.15x with earnings of 19.42%.
ECOBANK
Ecobank achieve year on year growth in its top line and bottom line figures.
Gross Earnings of N925.951 billion was reported for the 12 months period, up by 13.29% from N841.143 billion reported the previous year.
Profit after tax grew by 324.12% to N143.109 billion from N33.742 billion reported the previous year.
Earnings per share of Bank increased to N7.80 from the EPS of N1.84 achieved the previous year.
At the share price of N13.10, the P/E ratio of Ecobank stands at 1.68x with earnings yield of 59.53%.
FIDELITY BANK
Fidelity Bank reported the Gross Earnings of N75.092 billion, up by 46.74% from N51.174 billion reported the previous year.
Profit after tax grew by 85.97% to N11.612 billion from N6.244 billion reported the previous year.
Earnings per share increased year on year by 85.97% to 40 kobo from the EPS of 22 kobo reported in Q4 2020.
At the share price of N2.72, the P/E ratio of Fidelity Bank stands at 6.79x with earnings yield of 14.73%.
MTN
The telecom giant declared a final dividend of N8.57 to shareholders for the year ended 31 December 2021.
A turnover of N1.654 trillion was reported for the 12 months period, up by 22.87% from N1.346 trillion reported the previous year.
Profit after tax grew by 45.53% to N298.654 billion from N205.214 billion reported the previous year.
Earnings per share of MTN increased to N14.67 form the EPS of N10.08. This translates to 45.53% growth year on year.
At the share price of N190, the P/E ratio of MTN stands at 12.95x with earnings yield of 7.72%
OKOMU
Okomu Oil Palm Company Plc reported a turnover of N37.457 billion in Q4 2021, up by 60% from N23.411 billion reported the previous year.
Profit after tax grew by 80.50% to N14.043 billion from 7.781 billion reported the previous year.
Earnings per share of Okomu increased by 80.50% to N14.72 from the EPS of N8.16 reported the previous year.
At the share price of N142, the P/E ratio of Okomu Oil stands at 9.65x with earnings yield of 10.37%.