…shareholders to get N47bn as interim dividend
Amidst the growing concern for the rising cost of living in the country, leading companies that are listed on the Nigerian Exchange Group (NGX), the nation’s bourse, have given a glimpse of what shareholders should expect by year end. The 2024 half-year results for the period ended 30 June 2024 so far announced by a few of the companies showed that the first six months of this year were a season of bumper harvest as their profit after tax rose by a record 64.3 percent to N1.16 trillion in June 2024, up from N703.05 billion as of June 2023.
The 12 companies covered by our analysis include heavyweights such as Zenith Bank, Dangote Cement, BUA Foods, Stanbic IBTC, and FCMB. Others are Consolidated Insurance, Wema Bank, Sterling Holdings, Coronation Insurance, Beta Glass, UPDC and Neimeth Pharmaceuticals.
Some other listed companies especially banks, including the United Bank for Africa (UBA), GT Bank, Fidelity, among others are awaiting regulatory approvals for their half-year results.
In terms of revenue generation, the firms under coverage generated N5.71 trillion, an improvement of 94.7 percent over N2.93 trillion made in the corresponding period of 2023. The bulk of the revenue was generated by two firms, Zenith Bank and Dangote Cement. Zenith Bank made N2.10 trillion revenue from January to June 2024, higher by 117.2 percent than the N967.26 billion revenue realised from January to June 2023.
“We expect Zenith bank to post decent top-line and bottom-line performance in 2024FY riding on increased interest income and trading income in the period. We therefore maintain our 2024FY target price to NGN46.60. Compared to the current closing price of NGN39 as of 2nd September 2024, this represents an Overweight rating on the stock,” ARM Securities said in a note to investors.
Dangote Cement realised N1.76 trillion revenue at half-year 2024 as against N950.83 billion as of June 2023. BUA Foods made N672 billion while Stanbic IBTC Holdings generated N378.55 billion at half-year 2024.
Other firms in terms of revenue generation in the first half of 2024 are FCMB which made N374.47 billion; Wema Bank, N179.17 billion; Sterling Holdings, N152.20 billion; Beta Glass, N47.88 billion; Coronation Insurance, N21.40 billion; Consolidated Insurance, N16.95 billion; Neimeth, N1.66 billion, and UPDC, N683.48 million.
It should be noted that banks and cement manufacturers benefitted from the rising interest rates and prices of goods and services in the last 12 months in the country. The Central Bank of Nigeria (CBN) at its 296th Monetary Policy Committee meeting raised the Monetary Policy Rate (MPR), Nigeria’s benchmark interest rate, to 26.75 percent. The MPR determines the interest rates that deposit money banks charge on loans and advances to customers.
As of December 2023, the MPR was 18.75 percent. Subsequent hawkish moves by the apex bank ensured it was raised to 22.75 percent in February 2024; 24.75 percent in March 2024, and further to 26.25 percent in May 2025, before its current rate of 26.75 percent.
“Higher interest rates mean that loans and lines of credit become more expensive. This can increase the cost of financing for businesses, leading to higher operational costs. As borrowing becomes more expensive, businesses may delay or scale back on investments in expansion, new projects, or capital improvements. This can slow down business growth and innovation,” NACCIMA said in a note to stakeholders.
Deposit money banks subsequently raked in a sizeable amount of earnings as interest income. Zenith Bank’s net interest income as of June 2024 was N715.07 billion, 173.1 percent higher than the N261.86 billion net interest income realised from January to June 2023.
Dangote Cement benefitted from the rising inflationary trend as a 50kg bag of cement remained relatively high at N7,500 to N8,000 per bag, depending on locations, throughout the first half of 2024.
Zenith Bank, Dangote Cement, BUA Foods and Stanbic IBTC accounted for 87.7 percent of the profit after tax by the listed firms in our analysis. With N577.86 billion half-year profit, Zenith Bank accounted for 50 percent of the profit after tax. It was followed by Dangote Cement, N189.90 billion or 16.4 percent; BUA Foods, N130.93 billion or 11.3 percent, and Stanbic IBTC, N114.48 billion or 9.9 percent.
FCMB made N59.48 billion profit at half-year 2024, or 5.1 percent of the total profit under coverage; Consolidated Insurance realised N27.87 billion profit or 2.4 percent; Wema, N26,60 billion; Sterling Holdings, N16.26 billion; Coronation Insurance, N6.26 billion profit; Beta Glass, N4.31 billion; UPDC, 1.14 billion, and Neimeth, N198.23 million profit after tax as of June 2024.
Both Zenith Bank and Stanbic IBTC have proposed a half-year 2024 interim dividend of N1 per share and N2 per share, respectively, collectively amounting to N47 billion.
