Fourteen listed companies on the Nigerian Stock Exchange (NSE) that have so far released their audited financial statements(AFS) posted a combined profit after tax (PAT) of N171 billion, the analysis of firms’ audited reports by BusinessDay has shown. The full year 2017 PAT of the 14 companies shows a 761 percent increase over N19.894 billion the same companies made as PAT in corresponding period in 2016.
The companies under focus are Academy Press, Africa Prudential, Austin Laz, GRIEF Nigeria, Medview Airline, NASCON, Neimeth and Nigerian Breweries. Others are Seplat, Total Nigeria, Transcorp Hotels, United Capital and Vita Foam. But for the loss after tax made by Academy Press, Austin Laz, Neimeth and Vita Foam, the combined PAT would have increased by a billion naira.
“Last year (2017) was a year of recovery because the Nigerian economy exited recession in about the second quarter compared with 2016 when for the whole year, the economy was in recession. Therefore, what we are witnessing now is a manifestation of that recovery”, said Kayode Tinuoye, head, research desk at United Capital.
“However, since some of the most important sub sectors on the Exchange have not released audited results, we cannot conclude now that the improvement in PAT will be the same in all the sectors”, Tinuoye added.
Our analysis also shows that while the highly capitalised stocks witnessed growth in their PAT, firms lowly capitalised firms such as Academy Press, Austin Laz and Neimeth made a loss after tax. This however, is linked to the inability of medium enterprises such as the aforementioned companies to weather recession.
“Highly capitalised firms have diversified product offerings as well as enjoy economics of scale, an opportunity that small enterprises don’t have. In effect, the losses recorded by the lowly capitalised firms show that they are not well-diversified enough to withstand the impact of recession”, Tinuoye added.
The fourteen firms posted N1.13 trillion gross revenue in 2017 which represents an increase of 373 percent over N939.92 billion gross earnings realised same period in 2016. The bulk of the gross earnings came from Nestle Nigeria, Nigerian Breweries, Seplat and Total Nigeria.
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