₦airaland Forum

jideflash:
https://www.thisdaylive.com/index.php/2024/12/19/totalenergies-mrs-sifax-first-ep-sahara-others-win-oil-blocs-as-dangote-crashes-petrol-price-undermining-imports/

Oga, charge that ur phone.

Toluway:
Learn to be civil in your responses my dear Streetinvestor. That's too harsh man😁

Lol, and na for him hand I dey learn vawolence, yet when I display watin I learn from him hand him go come dey caution me. Person way him mouth dey smell no dey know.

mikeapollo:
You should be able to understand the difference between the possible impact of making a declaration that there will be bonus of a specific ratio (e.g. 1:2) and saying that minority shareholdings will increase from 42% to 65%. The increase in percentage is a technical jargon which most people in the market are yet to fully understand. It is only a few people who really understand the meaning or implication of that information. And you should be able to decode that, instead of saying that the market does not have confidence.
Don't be surprised to see some heavy deals in Oando a few days before they eventually announce the date(s).

I don’t think the people with the financial power to move the stock fail to understand the implications. I believe they are considering factors beyond what you’re currently seeing, and when those factors are resolved, they will act. Also, consider that by knocking off a major holder, they have systematically increased the free float. This means more shares will be traded randomly than before, as more shares will be in the hands of retail investors, even though the overall share count will remains the same.

I dey learn MH ooo, chai, how many people go buy Oando because of ME, no lie ooo

robobo:
Going by above explanation, i think OJT was fair in this particular case and it is just fair to mention same

i remember this period (Ansbury) very well. he was particularly fighting an existential threat then.

he got money from Ansbury (i think Volpi) and Mangal to conclude the Conoco deal then. Unfortunately after conclusion price of oil went drastically down along with all projections on which the conoco deal was done hence he couldnt repay. Volpi and Mangal want their money back or take over the company. i think the aftermath was the loan which led to the current share repayment/ bonus

That is why some of these Ogas, old in the business, like Emma, should advise newcomers to read about a stock using available sources and draw their own conclusions, rather than stubbornly promoting their own biased views. Honestly, I wasn’t thinking about the stock market back then; I was preoccupied with other things. But, the more I study Oando, the clearer the picture becomes. It seems more like a business transaction gone wrong ten years ago than the “Tinubu playing games with investors” narrative often repeated here. As an intelligent person, it’s better to take other people’s interpretations with a grain of salt and conduct your own independent research. Please note, I’m not saying anyone is a saint.

HesInMe:
Thanks. Source, please?

From the 3-hour 45th Annual General Meeting of Oando PLC, I suggest starting from the final hour to listen.

Mr. E. K. Osaku, the Independent Non-Executive Director of Oando PLC and Chairman of the Statutory Audit Committee, provided the following explanation (this is a transcript I prepared):

"I will read because as some have mentioned it's an important matter matter and it is important that you understand properly what is being proposed. Background at the 42nd annual general meeting of PLC held on August 31st, 2021, the shareholders and the company ratified the actions taken by the company to protect itself against actions that would have affected the continued existence of the company. In relation to the dispute between OODP BVI and Ansbury which was the subject of the SEC matter. Previously on August 29th 2019, Ansbury Witmore Interalia entered into a settlement deed where it was agreed that Witmore was to buy out Ansbury's interest in OODP in full and final settlement of the dispute. Many of you will remember this. Witmore therefore approached the company to assist in raising the financing for the settlement. The company obliged by providing a settlement loan on the following terms. The lender was O and Oil Limited. and Owando Sevco. The borrower was Whitmore Asset Management Limited. The facility amount was $550 million. The tenor was 20 years, principal moratorum 10 years, and the interest rate of 6%. Subsequently on full settlement of the indebtedness to Whitmore of Whitmore to Ansbury, Ansbury transferred its shares representing 60% of the ownership in OODP BVI to Witmore thereby making Witmore the so owner of OOP BVI who own 57.37% of Orlando plc, your company.

Now, Whitmore's proposal in October 2021, Whitmore repaid $225 million and reduced the loan value to $325 million. Witmore now proposes an early repayment of this balance in kind. The proposal is to deliver the 60% shareholding it secured from Ansbury, which amounts to nearly 4.3 billion shares in Oando. As full and final settlement of the debt, the board has analyzed and approved this transaction for the following reasons. One, early settlement of the liability. Under the current terms of loan agreement with Whitmore, the facility will be finally repaid in 15 years time with an initial 10-year principal moratorum. Accepting this proposal allows Orando to receive the benefit of the settlement value of a significant long-term liability well ahead of schedule providing shareholders with equity value. The company proposes to deliver some of the shares to the shareholders given the constraints on paying cash dividends in recent years. Returning shares to shareholders provides them with a tangible benefit and a form of compensation that aligns with commitment to shareholder returns. This share distribution acts as an alternative to cash dividend and can support long-term shareholder retention and confidence especially given the current rising value.

You can now understand what Mr. Tinubu was discussing. Three increase in shareholding this share base. ment would result in an increase in the ownership stake of the minority shareholders. Enhanced liquidity and balance sheet impact. This sharebased repayment strengthens Oando's balance sheet by extinguishing a significant receivable asset which would improve financial ratios reflecting positively on creditworthiness and market perception and provide additional capacity to discharge other li abilities sooner. No negative impact on financial statements. It is pertinent to note that accepting this shares as settlement for the obligation would not only create no negative impact on Orlando's financial statement as the original facility amount had already been fully impaired due to the dep duration of repayments and Finally, there's positive market impact and increased shareholder equity. Mr. Tunbu has mentioned just now and I will emphasize that with this proposal, OODP has agreed to withdraw its offer to buy out the minorities. So all disclosures in this regard you will Fact find they are in the annual reports. Just to close I would mention as follows. Currently your company has approximately 12.4 billion shares. Ansbury owned 34% approximate. Whitmore effectively owns 23% and other shareholders 42. If the financial rearrangement is approved and it is closed, you will end up with Whitmore owning no longer 23 but 35. Other shareholders would no longer be 42 but 65%. That's just it's calculations. You can do them yourself but that is basically the background to the transaction. Thank you very much Mr. Chairman..."

Background

Ansbury was involved in a dispute with Whitmore Asset Management Limited in 2019. This dispute led to Whitmore buying out Ansbury's interest in Ocean and Oil Development Partners Limited (OODP) as a full and final settlement.

The restructuring involves Whitmore transferring its 60% shareholding in OODP, equivalent to nearly 4.3 billion Oando shares, to Oando as settlement for a $325 million debt.

Share Restructuring

Shares Outstanding: 12.4 billion

Therefore, 4.3 billion shares, or 34.68%, will be equally distributed to other shareholders.

The remaining 65.3% will now represent 100% of the equity.

As a result, 1 share post-restructuring increases to:
100% / 65.3% = 1.53.

This means 1 share becomes equivalent to 1.53 shares, or approximately 3 shares for every 2 shares.

Due date

An amendment to the share distribution plan was approved during the AGM, requiring Oando to provide a five-day notice to shareholders before any distribution occurs.

Thank you.

yMcy56:
Not all of them...
The person in suit currently speaking is saying the truth...... talking about shareholders not receiving dividends, compares ARADEL and SEPLAT in terms of profit making, etc.

The Mr. Adio that talked about adopting prospectus or something also talks well.....
I was even thinking say abi na Streetinvestor be this...😁

hahaha, I thought na Oga Emma in disguise.

ojeysky:
Oando and Aradel are miles apart...I just wonder what will have happened to Oando if present govt wasn't in town, they basically started making money after that yet they are still in red. There goes the red on Oando on the floor....

You need to be objective. Aradel listed at close to 800 naira, but it was the same "red" on the floor that brought it down to below 500 before it reversed. So, the red on the floor is nothing new. The facts are undeniable: the company is making money, and the negative equity will soon be resolved, whether the current president does it himself or not—it doesn’t matter.

BabsO2:
For what time frame is this picture of Oando Value Profile ?
Great tip you share in the picture, for not betting (or is it investing) at a price above that of big money !!

Approximately one year from yesterday (2023-12-1 to 2024-12-15). You can see this in the code as the last 250 days.

Jump my posts and pass to read faster, that is ur business, lol.

Oando was below 70 for quite a while, yet some people with their "tachere" thinking thought they were smarter than the big boys, who invested over 40 billion Naira at levels above that. If you had bought at 62, you would have outperformed those 50 billion Naira investments this year alone. Do you think the moneybags threw in that much money without analyzing the upside? Do you really think your "tachere" mindset and limited exposure can beat the billions? You’re deluded.

The same goes for Aradel. Billions have been invested at levels above the current price. Forget wretched analysis and follow the money (Billions).

Oando potential path to financial recovery

Key Financial Metrics (Company) :
Nine-Month Profit: N76,295,571,000
Projected Annualized Profit: N101,727,428,000
Negative Equity: N198,557,277,000

Recovery projections:
Approximately 1.95 years (just under 2 years, 2026 ending) to eliminate the negative equity if the current profit levels are maintained consistently.

Assumptions and Limitations:
1. Consistent profit levels throughout the year
2. No significant changes in capital structure
3. Stable business operations
4. Stable external economic factors

Oga Emma can now see that there is a silver lining. Due to our discrepancies on the Oando matter, you vowed not to reply to my posts and I hated you for it. Because of this, I transformed from the gentle and loving Ositadima1 into a cocky warlord ever ready to impel my enemies. But Mr. Time will intercede for us.

emmanuelewumi:
My last post on the subject matter

Do what works for you

Streetinvestor2:
#2 too cost for now.we still get stocks at 20kobo that are expensive.,lol
I will buy at #20 when i see palm oil.Atleast for onado thr is already an amount of crude oil for sell

Yes, just like people are buying Conoil at 387 now, even though it was below 50 at some point. That’s how the market works. Those who recognized its value when it was under 100 took their positions years ago, while others are now purchasing it at 387 at full bid.

Hahaha, yeye they smell.

Agba dat said crash go dey, how market? Shebi na January the crash go happen ni? We dey watch, lol

Dey go look for Ellahlakes at 2 naira tire.

Oga Emma that was talking Oando and Ellahlakes down, how market? Oando that will cross that 100 naira he used to yab it, lol.

Streetinvestor2:
is it really low.How much was it before otedola moved it to that high you saw.I bought at #1.45 and gladly sold at #290.what is the free float of the shares. Thr was a time over 95% was in alhaji hand and even now it is still very low.I am not sure but don't think the free float is still up to 10%. I remember alhaji selling a stake to major investors not too long from south Africa

The most recent share ownership structure of Dangote Cement Pie as of February 26, 2024 is:

Dangote Industries Ltd: 85.8%
Stanbic IBTC Nominees Ltd: 5.61%

All other shares, excluding treasury shares and shares held by Aliko Dangote (0.16%), are considered free-float shares. Aliko Dangote is the ultimate owner of Dangote Industries Limited.

HesInMe:
Sorry, I edited my comment to read "power," not "electricity" just as you were responding.

And I'm not arguing about inflation/debt/slow growth in the abstract; I just mapped out how I think it threatens DangCem's dividend, which was the core of your investment thesis.

I see what you did there, lol.

Remember say my own is to make that 100%, so if dangote come drop after, he no concern me.

Streetinvestor2:
No vex say I put mouth. The two things you mentioned in your first sentence. It is only one I see as a problem going forward but with present cost of cement it may be no problem. The inflation rate will soon bend south. Then on debt. All this borrowing from government is going into infrastructure. And thr is no infrastructure without cement. The new road initiative alone is a big one for cement. And alhaji will continue to take the lion share thr.
I will bet that alhaji cement will go north but can't say how far.You have forgotten that otedola is now involved. What let him finish with fbn matter and he starts magic with alhaji cement. Dangote cement will still touch #700 plus next yr

Inflation is affecting WAPCO, BUA Cement, and others—so why is it only Dangote that’s expected to suffer? The Chinese cannot import unless they lobby the government successfully, so they’ll have to work with what WAPCO has here. Unless they bring technology that significantly improves efficiency, I don’t see them outperforming Dangote (in the short term). Mark my words, Dangote Cement will gain more than 100% from its current price (highest 2026). Laugh me well well if by middle of 2026 he never double at least one time.

HesInMe:
You're about to learn how inflation and debt destroy value in the absence of organic growth. Roll forward a year or two. DangCem cannot raise prices forever at the current clip: We need housing, but demand for cement is not inelastic. So revenue growth will sharply abate. Meanwhile, its installed high cost of goods (electricity?) will remain stubbornly high, and the interest rate on its ballooning debt is (mostly) fixed.

You can model the rest: Gross profit will fall. Net profit will too, maybe in absolute terms. You can kiss that dividend growth you're hoping for goodbye.

Then the Chinese, who have a massive domestic overproduction of cement and are desperate to capture market share in high growth markets like Africa, will show you that they're willing to take on temporary losses to achieve strategic objectives.

Let me not be too pessimistic. Exports are one way to continue revenue growth. And the low valuation does help.

You talk about inflation as if it only affects Dangote. Isn’t inflation impacting other businesses equally, or is this just to strengthen your argument? Unless the government lifts the ban on cement importation, the Chinese will have to perform their "magic" within Nigeria. I’m not sure what you mean by electricity; as far as I know, Dangote typically generates its own electricity in-house.

HesInMe:
Revenue is growing, but mostly due to price inflation (unit volumes only grew a measly 2% in 2023). Yet with each bag of cement it sells, DangCem is making less money than it used to (gross margins have collapsed).

You are correct that revenue growth may be affected by inflation, but it is growing faster than the cost of doing business, including taxes and interest. This has resulted in an increase in net profit, which rose from 382 billion in 2022 to 455 billion in 2023. Percentages can sometimes be misleading—for example, 10% of 1 million is greater than 30% of 200 thousand. I don’t believe the company is making less money unless you adjust for inflation. But then every naira is worth less than it was a year ago.

HesInMe:
At the same time, debt is rising fast, meaning that shareholders have a shrinking claim on its shrinking profits.

As I mentioned earlier, net profit in absolute terms is growing despite increasing debts. As noted in my initial post, leverage remains below 100%, meaning equity is still higher than debt, so there is no cause for concern. Since debt levels can fluctuate—rising in some years and falling in others—the most important factor here is that gearing remains under control (under 100%).

HesInMe:
And we haven't even started talking about the coming competition from the Chinese (see: WAPCO)...

This is a big "if." Unless the Chinese bring advanced technology to cement manufacturing, I don’t see them expanding their market share to the extent of badly hurting dangcem operations simply through competition. Remember, Dangote operates in more African countries than WAPCO does and has also mentioned plans to export cement to America alongside oil cargoes.

HesInMe:
(By the way, there's something off mathematically about equity growing faster than debt when debt/equity is growing.)

Dangote Cement PLC executed two tranches of its share buy-back program.

Tranche I: From December 30th to 31st, 2020, the company bought back 40,200,000 units of its shares at a total cost of N9.8 billion, which included the par value of the shares and the additional premium paid.

Tranche II: From January 19th to 20th, 2022, Dangote Cement bought back 126,748,153 units of its shares. This represented 0.74% of the company's issued and fully paid ordinary shares. The total cost was N35.3 billion.

A third tranche was executed in July 2023, under a second share buy-back program:

Tranche I (Program 2): From July 17th to 18th, 2023, Dangote Cement bought back 121,404,714 units of its shares, representing 0.71% of the company's outstanding shares. The total cost was N41.4 billion.

Though company bought back shares in several tranches, the total number of outstanding shares has not decreased. The company holds the repurchased shares as treasury shares, which are shares that a company has repurchased but not retired.

toyeoye:
📊 End of Day Market Wrap

📈 Top Gainers:

CAVERTON, IKEJAHOTEL, and ARADEL surged +10%, leading the market rally.
AFRIPRUD followed closely with +9.87%, reflecting strong interest.
📉 Top Decliners:

AUSTINLAZ dropped -10%, while ABCTRANS fell -8%, facing sell pressure.

Track live insights at https://stockbubbles.com.ng 🚀 #MarketUpdate #GainersAndLosers #NGX

The site is "okayish", but I think it needs more work to make it truly engaging and addictive. Personally, I’m not a big fan of the bubble visuals. Perhaps taking inspiration from "Visual Capitalist" could help you explore better visualization options.

Here are a few things I’d suggest working on:

1. Add more details for each stock, such as the sector, what the company does, information about management, market cap, shares outstanding, and a dividend history with rates for at least the past five years.

2. Include a flexible ranking system that allows users to sort stocks by different criteria—day, month, dividend rate, market cap, value traded, etc.

I recommend checking out Yochaa. Although they don’t update as frequently now, it was my go-to software for analysis before I started developing my own tools and data. Another platform worth looking at is Investing dot com. Did you know their screener allows users to shortlist stocks based on a combination of criteria?

I noticed you comparing your site to Investing dot com recently. To be honest, you're still far behind. While your platform appears to have more timely and accurate data—likely because you’re using a paid provider—the functionality is still quite basic. Once you add more robust features, you’ll be in a stronger position to criticize others for being inferior.

pluto09:
Not trying to prove anything, make you no vex

Lol, I was about to pull out my Winchester Double Barrel—but we’re all good people here.

pluto09:
The most recent results for the company is q3 2024 and I think it would have been better if you had used the 9 months result for your computation.
The net profit for 9 months is less than 300b.

I don’t understand what you’re trying to prove here. Yes, the 9-month revenue is less than ₦300 billion, but it was still higher than the 9-month revenue in 2023, which ended up closing the year at ₦455 billion. Revenue and costs fluctuate throughout the year; sometimes, costs are more concentrated during specific periods, and the same can happen with revenue. In my opinion, a 6-month period provides a better representation, second only to a full-year analysis.

Toluway:
https://nairametrics.com/2024/12/13/dangote-sugars-debt-fx-and-losses-what-is-the-way-out/

Remember this post"

ositadima1:
Description of Biological Assets (Note 17 of 2023 Financial Reports)

Biological assets consist of growing cane, which is expected to be harvested as agricultural produce for sugar production. These assets have been measured at fair value less the cost to sell. As of December 31, 2023, the group has a total of 8,283 hectares of growing cane (2022: 8,092 hectares).

Yield Estimation and Sugar Production Potential

The yield of sugarcane varies significantly based on factors like soil quality, climate, and farming practices. We can make a rough estimate using the following assumptions:

Average yield: Approximately 60-100 tons of sugarcane per hectare per year
Given area: 8,283 hectares
Conservative estimate: 70 tons per hectare

This results in:

8,283 hectares times 70 tons/hectare = 579,810 tons of sugarcane per year

The amount of sugar produced from sugarcane also varies, but on average:

1 ton of sugarcane yields about 100-110 kg of sugar

From our estimated yield:

579,810 tons times 100 kg/ton = 57,981,000 kg or about 58,000 tons of sugar

Future Independence Projection

Achieving full independence in sugar production will take much more than four years. The Dangote Refinery has an installed capacity of 1.44 million tonnes per year, would require about 24 times its current (8,283 hectares) size.

Based on the balance sheet, the value of the biological assets increased from 6.9 billion to 14.4 billion while the land area increased from 8,092 hectares to 8,283 hectares. Acquiring an additional 191 hectares likely cost around 7.5 billion, indicating that acquiring sufficient land to meet the refinery's capacity would require approximately 7 trillion naira (or 336 billion, ok i am getting conflicting numbers and i am sleepy too ).

In conclusion, substantial investment and expansion are needed to achieve the desired production capacity.


Note that I used help of Claude to make this assumptions.

They had about 8,000 hectares at the time. Did you notice they’re shifting the timeline from 4 years to 6 years now? I still think it will take even longer. With their current negative equity and unsecured loans at nearly 30% interest for working capital, acquiring enough land to reach 150,000 hectares will be extremely challenging. Incidentally, my calculations were quite close—I estimated they’d need 24 times the existing 8,000 hectares to achieve full independence. It’s going to be a long and tortuous journey for DangSugar. Good for Jijo, but it may not be the best choice for a long-term investment. Perhaps the merger, if it happens, could add some excitement for Jijo enthusiasts.

HesInMe:
Help us see what you're seeing. Here's Dangcem's recent progression of EBITDA margins:

FY23: 40.1%, down from 43.8% prior year
1Q: 37.9%, down from 45.7% prior year period
1H: 37.9%, down from 46.6% prior year period
9M: 35.5%, down from 43.8% prior year period

And here's how net debt has evolved:

FY23: N521.3B (gearing: 30.2%)
1Q: N558.8B (gearing: 24.7%)
1H: N915.7B (gearing: 42.3%
9M: N1,050.5B (gearing: 48.6%)

So margins are shrinking and debt is rising. How are you seeing both (I assume) a near-term dividend increase and multiple expansion?

Take a look at the snapshot I quickly put together. There may be errors as I was rushing to finish before watching the new episode of Silo. You’ll notice that while debt is increasing, equity is growing at a faster rate. The debt-to-equity ratio remains well below 100%, and for 2024, the 70% figure represents the first six months. I’m positive that it will be lower by year-end. The blue cell in the corner is where I doubled the equity value to annualize the six-month data. Everything else should be self-explanatory.

HesInMe:
Help us see what you're seeing. Here's Dangcem's recent progression of EBITDA margins:

FY23: 40.1%, down from 43.8% prior year
1Q: 37.9%, down from 45.7% prior year period
1H: 37.9%, down from 46.6% prior year period
9M: 35.5%, down from 43.8% prior year period

And here's how net debt has evolved:

FY23: N521.3B (gearing: 30.2%)
1Q: N558.8B (gearing: 24.7%)
1H: N915.7B (gearing: 42.3%
9M: N1,050.5B (gearing: 48.6%)

So margins are shrinking and debt is rising. How are you seeing both (I assume) a near-term dividend increase and multiple expansion?

I will likely respond to you tomorrow evening when I have the time to review the FA, as I mentioned in the post you quoted. My TA indicates that 900 is possible, and that is all I know for now.

Streetinvestor2:
ok it is paid upfront like TB
Then I noticed that sugar is 24.5% discount rate. Is this 24.5 going to be for 270days as that is the highest tenor in the CP or 365 days like we have in TB.They did not specify in the notice If it is annualized. I want to know if CP matter could be different from TB in calculations
I want to be sure make I no go dey do wrong calculations.

Series 6: A 180-day tenor with a discount rate of 24.99% and an implied annual yield of 28.50%, maturing on June 11, 2025.
Series 7: A 270-day tenor with a discount rate of 24.55% and an implied annual yield of 30.00%, maturing on September 9, 2025.

I believe it is always presented as an annualized rate; it think it is the standard practice.

Streetinvestor2:
Is the interest on commercial paper paid up front. I want to understand this discounted rate and implied rate thing on dangota sugar CP for 270 days tenor

Make una no vex say nobi stock matters

Let me explain what I know, as the "oversabi" guy that I am. Similar to treasury bills, the discount rate represents the percentage of the face value (the amount you initially invested) that will be paid to you upfront. For example, if you invest ₦1,000 at a 20% discount rate, you will receive ₦200 upfront after confirmation at the start of the tenure. This effectively means that what you actually invested is ₦800, which will be utilized by the issuer until maturity. At the end of the tenure, you will be paid back the full face value of ₦1,000.

The implied annual yield, on the other hand, takes into account the actual ₦800 you invested. It is calculated as ₦200 divided by ₦800, which reflects the return on the actual amount utilized. Note that the discount rate is calculated as ₦200 divided by ₦1,000.

Also, these values are annualized. For shorter tenures, the returns are prorated based on the actual length of the investment period.