Better Glass of Nigeria Plc, the nation’s biggest maker of the glass packaging products, gained for a fifth day, the longest winning streak in five months.
The stock had risen 4.41 percent to N39.97 as at the close of trading in Lagos, the commercial capital, its longest streak of gains since Jan. 6. The shares have risen 146.42 percent this year.
Beta Glass recorded better performance in the first quarter of 2015 as net income increased by 24 percent to N425.71 million, from N343.55 million in the same period of the corresponding year (Q1) 2014.
Sales increased by a mere 3 percent to N4.04 billion as consumer spent more on transportation, due to fuel hike, hence weakening the purchasing power of the people.
Cost of sales (COS) ratio increased to 79.20 percent in 2015 as against 77.90 percent as devaluation of the naira and cessation of power, spiked production costs of companies operating in Africa’s largest economy and oil producer, Nigeria. Cost of sales reduced by 5 percent to N3.20 billion.
Gross profits were down by 3.44 percent to N840 million, from N870 million the previous year while gross profit margin fell to 20.80 percent in 2015 as against 22.25 percent in 2014.
Nigeria’s central bank scrapped its bi-weekly currency auctions in February 2015 and said it would sell dollars only at the interbank near N198, a move that amounts to a de facto devaluation of Nigeria’s currency.
The naira has lost more than 13 percent of its value against the dollar in the past six months, and was trading 0.2 percent stronger at 199 a dollar by 3:47 p.m. in Lagos.
Inflation increased to 8.7 percent in April, close to the top of the bank’s 6 percent to 9 percent target band.
Analysts say the devaluation of the naira spiked raw material costs of Beta Glass, as the company imports most raw materials to meet production.
The company’s net profit margin, a measure of profitability and efficiency reduced to 10.51 percent in 2015 compared with 8.70 percent the previous year.
Total assets moved by 15.72 percent to N31.15 billion in 2015 from N26.92 billion the previous year.
Analysts say Beta Glass will be in a growth spurt in subsequent quarters as supportive demographic and likely increase in consumer disposable income will drive the demand for glass products.
Nigeria’s rising populations that crave for consumption means that the future is auspicious for manufacturers like Beta Glass.
According to a recent report from McKinsey Global Institute (MGI), it is projected that the country’s consumption could more than triple, rising from $388 billion/year to $1.4 trillion/year in 2030, an annual increase of about 8 percent.
Beta Glass has 500 million shares outstanding while market capitalization was N19.98 billion.
BALA AUGIE
