About 44 major companies listed on the Nigerian Stock Exchange(NSE) have released first quarter ended, March 31, 2016 results reflecting the harsh operating environment.
In the first three months of 2016, uncertainty dominated the economic and business environment. Capital market analysts have said, the conditions that characterised economic slowdown in the first quarter of 2016, were uncertainty around economic policies, non-signing of 2016 budget, adverse external environment, security challenges in some parts of the country affecting production and distribution of agricultural produce, low electricity supply, fuel shortages, and the foreign exchange crisis.
Comparing the firm’s results under the period review to the 2015 period it showed that combined profits for all 44 firms were down by 11.1 per cent to N252.3 billion, from N283.9 billion in 2015.
This fall in profits was a little bit worse than expected.
Similarly income tax expense for the firms fell by 12.97 per cent for the first quarter, 2016 period to N35 billion from N40.2 billion.
Analysts have said, this trend may make it harder for the federal government to achieve its goal of boosting non-oil revenues especially taxes this year.
The results showed that the major banks and Dangote Cement were the companies that reported any significant profits and paid majority of the taxes. Dangote Cements profit- before- taxe (PBT) of N54.53 billion was the biggest in the quarter, followed by Zenith Bank’s N32.1 billion, Guaranty Trust Bank with N30.67 billion, Access bank’s N22.5 billion and FBN Holdings N22.05 billion to round up the top five.
The poor state of the economy showed up in the construction and cement industry as Lafarge Africa reported a quarterly loss, while Julius Berger, Dangote Cement and CCCN all reported lower profits for first quarter 2016, than in the earlier period. Most of the banks also recorded lower profits compared to a year ago.
The managing director, APT Securities and Funds Limited, Mallam Garba Kurfi, attributed the current lull in the economy to insurgency in the north-east, the fall in global oil price, declining naira exchange rate, among others.
Source : Leadership