◾The management of the country’s largest Power Generating Company, Egbin Power Plant has confirmed that the Improved gas supply to power stations has helped to substantially increase the power generation.
◾The Chief Executive Officer, Egbin Power Plc., Mr. Dallas Peavey mentioned that the impressive electricity supply being experienced by consumers, especially in Lagos State and other surrounding states, is due to increased gas supply and huge investment in new and upgrade of power infrastructure by the owners of the company, Sahara Power Group and the Korea Electric Power Corporation (KEPCO).
◾Peavey said Egbin generates and supplies over 1,100 megawatts (Mw) of electricity to the national grid and hopes to reach plant’s installed capacity of 1,320Mw or a little below it.
◾He assured that if gas supply is sustained, the output from the power plant would not only be sustained, but well exceeded.
more on...[url]http://nairametrics.com/here-is-one-reason-why-power-supply-has-been-so-good-in-lagos/

The Nigerian Bureau of Statistics released its foreign trade statistics Q2 2015 report, the report showed that the value of Nigeria’s exports totaled N2.8 trillion in Q2 2015, an increase of N214.1 billion or 8.0% over the value recorded in the preceding quarter, yet a decline of N1.8 billion or 38.5% year on year. The structure of the exports is still dominated by Crude Oil exports, which contributed N2.1 trillion or 73.7% to the value of total domestic exports in Q2 2015. Natural Liquefied Gas was the product with the second greatest export value, recording N260.7 billion or 9.1% of the total export value during the period under review.

Exports classified by section revealed that Nigeria exported mainly ‘’Mineral Products’’, which accounted for N2.5 trillion or 87.3% of the total export value in Q2 of 2015. Other products exported by Nigeria include ‘’Vehicles, aircraft and parts thereof; vessels etc.’’ at N250.6 billion or 8.7%, Vegetable Products’’ at N36.7 billion or 1.3%, and ‘’Prepared foodstuffs; spirits and vinegar; tobacco’’ at N24.6 billion or 0.9% of the totals respectively.

Nigeria exported goods mainly to India, Spain, Netherlands, South Africa and Brazil in the quarter of review, whose values stood at N406.1 billion (India), N297.4 billion (Spain), N296.3 billion (Netherlands), N240.9 billion (South Africa), and N147.8 billion (Brazil).

By continent, Nigeria exported goods mainly to Europe and Asia, which accounted for N1 trillion or 36.9% and N823.8 billion or 28.6% of the total export value respectively during the period under review. Nigeria exported N554.3 billion or 19.3% to the continent of Africa while export to the ECOWAS region totaled N171.1 billion, or 30.9% of all exports to Africa.
more on....http://nairametrics.com/nigerias-major-exports-went-to-india-spain-netherlands-south-africa-nbs/

◾The Nigerian Communications Commission has blocked 10.7 million mobile telephone lines in the last one week (since August 11) for improper registration.
◾It said on Tuesday that at the completion of a “strict monitoring of mobile operators in the country,” it was likely to block 28.61 million more lines found to be defective, which would bring the total number of deactivated lines to 38.78 million.
◾The ongoing deactivation of preregistered Subscribers Identification Modules cards on the network of mobile operators in the country led to the blockage of the telephone lines.
◾Speaking in Lagos, the NCC said the lines were barred due to improper registration details including poor fingerprints; lack of facial information and other biometric challenges.
more on....http://nairametrics.com/see-why-ncc-blocked-10-7m-telephone-lines/

◾Against the backdrop of checkmating crime, and criminal tendencies among youths arising from the problems of massive unemployment in the country, President Muhammadu Buhari has said that the Federal Government is emplacing appropriate framework that will facilitate the employment of an extra 10, 000 Police officers.
◾Additionally, he said government is to establish properly trained and equipped federal anti- terrorism, multi-agency task force that will effectively address the challenge of Boko Haram and any form of insurgency in a sustainable manner.
◾Speaking at the one day National Security Summit organized by the Nigerian Police force and Sun Newspapers in Abuja with the theme ‘Community partnership approach to internal security and crime management’ Monday,


Buhari said“In order to further strengthen the security of the public space, consideration is being given to the expansion of the CCTV Monitoring System across major cities and towns in the country while police accountability mechanism will be strengthened”.


According to the President, “The need for community input to policing and crime management in Nigeria has even become more imperative considering our current national security challenges in which kidnapping, armed robbery, murder, transnational crimes, terrorism and other organized crimes have evolved to threaten our national values and developmental strides”.


“While it is understandable that unemployment, illiteracy, radicalization, negative peer group influence, substance abuse and erosion of family and moral values are social factors that underline criminal tendency, the reality remains that the task of addressing these challenges is that of parents, community and the state”.

more on...http://nairametrics.com/jobs-pmb-will-employ-10000-police-officers-installs-cctv-in-major-towns/

◾The Federal Government has identified 13 products to serve as alternative sources of its revenue generation, the Managing Director of Nigeria’s Export and Import (NEXIM) Bank, Mr. Roberts Orya, has disclosed.
◾He stated this in Makurdi while fielding questions from journalists at the end of a 3-day awareness workshop for North Central States on the prospects of diversification to non-oil sector economy.
◾Mr. Orya said that it had become imperative for Nigeria to source for alternative ways of revenue generation following a progressive fall in the prices of petroleum products at the international omarket.


“As the largest economy in Africa and one of the fastest growing economies in the world, Nigeria can no longer afford to rely so heavily on crude oil, as the mainstay of her economy”, Orya said. ‘’Under this arrangement, every state will have a particular product to focus on, but cumulatively, the government has identified 13 products and we are hoping that in the next two or three years, that will be the focus of the government’’.
◾According to the NEXIM Bank boss, part of the initiative is to ensure that government comes up with a policy of one state – one product, a system where every state will be involved in deepening the non-oil sector.
more on...http://nairametrics.com/fg-will-diversify-the-economy-with-13-products/

Nigerian Central Bank (CBN) Governor Godwin Emefiele’s body language since the election of President Muhammadu Buhari has been one of a man trying too hard to impress.

Today we have reached the ridiculous position of cutting down trees in Abuja, in a bid to maintain a dollar peg of N199 that the CBN insists is “fairly priced.”

Emefiele, had earlier cut dollar access to importers of goods ranging from private jets to rice, Eurobonds and Foreign Shares — a strategy that has been widely criticised by the market.

In all there were about 14 pronouncements by the CBN on foreign exchange (FX) alone between November 2014 and February 2015.

A former chief executive officer of Zenith Bank Plc, Emefiele took office in June last year, pledging to lower interest rates.

Five months later, he raised the benchmark rate to a record 13 percent and in February, aligned the naira peg with the interbank.

Since then, Nigeria has elected a new president, Muhammadu Buhari, while oil prices have dropped below $50 a barrel.

The government is struggling to pay its workers’ salaries and pressure is mounting for devaluation.

Meanwhile black market dealers are selling the dollar at near N225 never mind Emefiele’s moves to eliminate them by cutting trees.


In basic economics when a good becomes scarce, the price must adjust higher to reduce demand and force substitutes.
more on....http://nairametrics.com/analysis-has-the-cbn-lost-its-independence/

◾Bristow Helicopters is to pay over $600,000 as compensation and damage to victims of the ill-fated helicopter that crashed last Tuesday, killing six persons out the 12 on board.
◾According to the International Civil Aviation Authority (ICAO), annexe on compensation for crash victims, each victim is entitled to $100,000.
ICAO, a few years ago, raised the compensation to $100,000 from the $10,000, according to the Warsaw Convention.
◾They are supposed to get $30,000 as initial payments shortly after the accident and then get the remaining $70,000 three months after the crash.
◾Meanwhile, the Accident Investigation Bureau (AIB) on Sunday, said it had retrieved the transcript (conversation between the control tower and flight crew), when downloaded, will give the exact conversation and all other side talks that transpired between the crew and air traffic controllers.
more on...http://nairametrics.com/on-the-bristow-helicopter-crash-see-how-much-compensation-victims-others-will-get/

◾Super Eagles Coach Sunday Oliseh paid a visit to the Nigerian Stock Exchange(NSE) on Monday, and was accorded the honour of ringing the closing bell for the day’s business at the capital market.
◾Alongside Oliseh, was the Nigerian Football Federation President, Amaju Pinnick, and other top ranking Football Officials who held talks with the Nigerian Stock Exchange Leadership on how to make Nigerian Football attractive to Corporate Nigeria.
◾The NFF President, Mr. Pinnick described Monday’s visit as the beginning of what would turn out to be a wonderful relationship between Corporate Nigeria and Nigerian Football.
◾The President also said that one of the goals of his administration will be to see Nigerian clubs being listed on the floor of the Nigerian Stock Exchange.
more on...http://nairametrics.com/sunday-oliseh-rings-closing-bell-on-nigerian-stock-exchange/

There are strong indications that at least 700 more staff of the Nigerian National Petroleum Corporation (NNPC) will be relieved of their posts by the Presidency and management, according to a source.
◾The source further said that staff on salary grade M5, who are mostly senior managers, would likely be affected, adding that this would amount to a massive shakeup in the troubled corporation, which is being repositioned by the new management.
◾Stakeholders said at the weekend, that the only solution in the restructuring is effective monitoring of the operations, which should be based on transparent processes.
◾They said the original plan of the management was to pay-off such employees with at least five years of service to go, but when it realised that the computed severance package was huge , it scaled down those listed to employees with one and half years to retirement.
◾Our source said the bulk of those to be affected by the next round of lay-offs would be those of the subsidiaries and that the exercise would be conducted by the new Group General Managers
more on....http://nairametrics.com/nnpc-will-sack-this-number-of-work-force-in-days-to-come/

◾President Muhammadu Buhari has commenced the process of identifying a few fearless and courageous judges who will be saddled with the responsibility of prosecuting persons who have been found to have stolen national resources.
◾It was learnt that the President was committed to ensuring that only judges who would expedite action on the cases and would be fearless in discharging their duties would be enlisted for the prosecution.
◾A source confided in our correspondent that that was one of the assignments Buhari gave to the Prof. Itse Sagay-led Presidential Advisory Committee Against Corruption which he set up on Monday.
◾The source said it would not be necessary to set up special courts to try corruption cases since efforts were already underway to identify judges that would key into the President’s dream of ensuring that no looter was left unpunished.
◾It was also gathered that Buhari was already considering withdrawing national honours from any individual found to have looted the nation’s treasury.
◾It was learnt that the President’s position was that the nation should not be seen to be honouring any fruadulent person.
more on...http://nairametrics.com/pmb-shops-for-fearless-judges-to-try-looters/

“The President will not hesitate to strip any corrupt person of national honour. Can you honour a person for milking the nation dry? It is irrelevant how long such persons have been bestowed with the national honours, they will be stripped of them,” the source said.

◾The Presidential Amnesty Programme (PAP) has initiated communication with the Central Bank of Nigeria and security agencies to review the payment process for former agitators in the Niger Delta.
◾Brig.-Gen. Paul Boroh (retired), the Special Adviser to the President on Niger Delta and Coordinator of the programme, dropped the hint in an interview with the News Agency of Nigeria (NAN) on Thursday in Abuja.
◾Boroh expressed displeasure over reports of complicity of some banks in the alleged short-changing of some of the beneficiaries by their leaders.
◾NAN reports that the payment of the outstanding stipends to the ex-agitators had been trailed by allegations of fraud.
◾According to some of the former agitators, the amount paid to them was less than the N65,000 per month that they were entitled to.
more on....http://nairametrics.com/cbn-amnesty-office-will-review-ex-militants-payment-process/

The aim of every business either big, medium or small is to minimize costs and maximize profits or as modern strategic thinkers put it, maximize the wealth of owners.

One sector under the keen watch of Nairametrics are the cement makers, these are firms, who despite the huge capital intensive nature of the business and the tough operating environment in Africa’s largest economy, were able to record low cost margins compared with other manufacturers.

The second quarter results of the four dominant cement makers in Nigeria showed them spending less to produce each unit of product, signaling high returns to shareholders.

For the first six month through June 2015, Dangote Cement Nigeria Plc (Dangcem), Lafarge Africa Plc, Ashaka Cement Nigeria Plc, and Cement Company of Northern Nigeria (CCNN) recorded an average cost of sales ratio (COS) of 55.46 percent.

This compares with the 85 percent for Nigerian flour millers, 92 percent for Aluminium makers and 70 percent for Consumer goods names, meaning cement makers are applying the latest technologies to reducing costs while seeking aggressive expansion across Africa.

The chart shows Dangcem recorded the lowest COS margins with 34.88 percent in the second quarter of the year which explains its highest industry profit margins. Ashaka C. had 59.28 percent (COS) as the company recorded the second highest profit margins.



Cement cost control strategies

Dangote C. has been able to improve operating efficiency and at the same time boost profitability as it relies less on power from the grid which is unreliable.

Instead of using diesel oil at factories to power plants, the company is dependent on gas, a cheap source of energy at both Obajana and Ibese plant sites. Dangcem is also currently investing in coal processing facilities at its sites and is exploring the possibility of converting Gboko to gas.



Ashaka’s successful completion of its Low Pour Fuel Oil LPFO-to-coal substitution scheme was significant in reducing production costs hence low cost margins.




Lafarge Africa has undoubtedly achieved a high level of gas utilization. The proximity of its Ewekoro plant to the rail line makes it easily accessible for the company, providing a cost effective alternative to road transport. These focus and market penetration strategies explain the company’s 22 percent increase in net profit in the review period.



CCNN is regarded as the company with the highest cost per ton among the big four. This is because of the company’s continued reliance on LPFO at factories. It location also makes distribution cost spiral up. The company is located in the North West cities of Kaduna and Kano.



Conclusions

While other Nigerian manufacturing firms are groaning under huge energy costs, Cement makers have been able to think outside the box and deploy alternative sources of energy to save costs.

Nairametrics believes other manufacturers can study the model these firms have employed as a way of tapping into the large Nigerian market.


more on....http://nairametrics.com/analysis-what-other-nigerian-manufacturers-can-learn-from-cement-firms/

The Financial Times reports that the Nigerian Government has started chopping down trees in Abuja as part of its plans to discourage black market operators of forex.

According to the Times, smaller trees lining up major streets in the FCT are being hacked away with machetes whilst branches of bigger trees are cut down using chain saws.

It appears this is one of the many unorthodox ways the CBN is now using to defend the naira against speculators who sell to black market operators or buy from them. Here is an excerpt from the Financial Times article


The Nigerian government has resorted to chopping down trees lining the streets of its capital to thwart black market money changers, one of a range of unorthodox measures it is deploying to defend its weakening currency.

On an August morning in Abuja, a labourer who said he was hired by the city government cut branches from a towering tree with a chainsaw. Nearby other workers hacked away at smaller trees with machetes.


Asked what they were doing, one, who did not want his name published, replied: “The government does not want the trees because people are doing illegal work under them”.

The man was referring to money changers from the north of the country who rest under the shade of the trees and sell US dollars, British pounds, and even Saudi riyals to customers hungry for hard currency.

Another worker who gave his name as Alex said: “People change dollars on the road here and it’s not supposed to be like that. People are supposed to go to the banks to do transactions”.

more on....http://nairametrics.com/new-policy-fg-is-cutting-down-trees-in-abuja-to-discourage-black-market-operators/

Na ur area no get light be dat

rawpadgin:
They are very stupid

as if we dey see the light to use

Doesn't change d fact that u will have to pay for what you use...

demmy0325:
Empty threat as Usual... Dem dey mad.. Serious mad.. Like we are meant to suffer bfore and Like say we no dey pay bills when light no good...



Lalasticlala

ok

teryorluv:
Baba should do something about dis

Electricity Bills are set to triple for Nigerian energy consumers this month as power consumption has increased in tandem with power supply, which attained and remained at an all time high throughout July and August.

Nigeria attained its highest peak generation of 4,662.2MW on July 28 this year, according to the Ministry of Power. Power generation capacity has also been ramped up to 5,500MW, and it might surpass this level if on-going work is completed.

Currently, Nigeria generates about 4600MW of power (according to Godknows Igali Permanent Secretary of the Ministry of Power), and generation has consistently been maintained at over 4,500MW in the past two months.

This compares with the output of 2,000MW generated between January and May this year. The major challenge now, is in the evacuation of the generated power to end-users.

The high power supply is mostly attributed to the rains, which have ensured hydrothermal generation of power continues to add supply to the grid.

Just recently the Egbin Power plant confirmed it had increased its power generation to over 1,100MW. A lot of the independent power projects have also come on stream ensuring a steady contribution of supply to the grid.

Also, a lot of big manufacturers that had previously relied on power from the discos have also moved on to becoming energy independent, freeing up a lot of energy for residential and commercial consumers.

Another factor responsible for the surge in output is the relative calm in gas disruptions, as prevalence of criminals vandalising gas pipelines has reduced considerably ensuring a steady flow of gas supply to Gencos.

These positive developments mean that energy consumers will have no choice but to pay more for electricity. Before now, most consumers interviewed by Nairametrics said that they enjoyed 4 hours of power supply daily. However, this has now increased to about 20 hours a day, and in other instances up 22 hours a day.

Based on this, we opine some consumers may see their electricity bills triple. Customers who are on estimated billing are more likely to be hard hit as they may have to take the brunch of having to pay for higher bills. We won’t be surprised to see customers who are typically billed N5,000 a month see their bills rise to as much as N15,000 a month.
See more on...http://nairametrics.com/brace-up-electricity-bills-set-to-rise-as-power-consumption-soars/

Zenith Bank reported its 2015 H1 results showing pre-tax profits of N53billion, a 26% rise from its 2014 result.
more on.... http://nairametrics.com/corporate-action-zenith-bank-records-26-rise-in-profits-for-2015-half-year/

◾Dr Atiku Abubakar, Deputy Managing Director, Transmission Company of Nigeria (TCN), on Tuesday said about N15 billion was required for the nation to generate 8,000 megawatts of electricity by 2016.
◾Abubakar made this known during inspection of some ongoing electricity projects at the sidelines of a training programme for auditors in Lagos.
◾He disclosed that electricity generation in the country recently improved and attributed it to improved gas supply to generating stations.
◾According to him, we have been able to reach the highest peak so far in July of about 4,652 megawatts while the transmission capacity remains a little above the power generated so far.
◾He said that contrary to other opinions, TCN had the capacity to transmit about 5,300 megawatts of electricity.
more on.....http://nairametrics.com/for-n15bn-will-nigeria-achieve-8000-megawatts-electricity-generation-in-2016/

The Nigerian Bureau of Statistics (NBS) released its Premium Motor Spirit (Petrol) Price Watch for June 2015. The report presents average monthly prices paid by households for PMS across the 36 States and FCT. Households in Bayelsa paid N155 for a litre of petrol, other states include Nasarawa N126.
more on.... http://nairametrics.com/see-how-much-you-spent-on-petrol-in-1-year/

The National Bureau of Statistics has disclosed that a total of 15, 519 active subscribers had joined a different carrier in April of 2015, representing just 0.01% of all mobile (GSM) subscribers. Of these Etisalat received the most, with 9,875 or 63.63% of the total, followed by Airtel with 2,993 or 18.90% and Globacom with 1,717 or 11.06%. MTN received the fewest subscribers at 994 or 6.41% of the total.

Monthly growth in receipt of subscribers transferring carriers averaged 2.73% between May of 2014 and April of 2015, which was primarily driven by Etisalat, which averaged a rate of 11.45% over the same period.

more on....http://nairametrics.com/official-in-q1-15519-subscribers-joined-a-new-network-nbs/

Just last week most media outlets announced that the refineries are back to work and have now commenced full production
It appears however that this may not be true according to the Punch
The paper claims no refinery had been able to produce petrol in commercial quantity in the past weeks, despite claims by the operators of the facilities that they had started refining crude oil to produce petroleum products.
It maintains that in fact, senior officials of the Federal Ministry of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency told their correspondent in Abuja on Monday that tankers still headed for Lagos to load products.
The Nigerian National Petroleum Corporation last month announced that the Port Harcourt Refining Company was ramping up capacity to about 60 per cent of the 210,000 barrels per day of crude capacity, while production from the Warri Refining and Petrochemical Company had been projected to hit 80 per cent of its installed 125,000 bpd capacity.
The Manager in charge of the Production Programming and Quality Control, Kaduna Refining and Petrochemicals Company, Shehu Malami, had reportedly said that the refinery would save about $5.33m daily for the country when it hits 90 per cent production capacity in the first quarter of 2016.
But officials at the petroleum ministry and the PPPRA who was interviewed by the Punch doubted that they were workingwomdering why the refineries had yet to churn out products, particularly petrol, if actually they were operational as claimed.
Here is how the official put it
“Has any of the refineries stated the quantity of products that they are actually churning out? It is already known that Nigeria consumes an average of 40 million litres per day; so, if the refineries are working, then you can now say maybe they are producing about 20 million litres per day and you can now subtract that from the imports. We need to verify if indeed they have started churning out products, not just on paper. Just two weeks ago, they gave letters of allocation to importers to bring in products to meet the third quarter consumption demand.”

In his reaction, the National President, Independent Petroleum Marketers Association of Nigeria, Mr. Chinedu Okoronkwo, said the refineries were working but they had constraints in terms of supplying products to marketers.
more on...http://nairametrics.com/ooops-refineries-fail-to-work/

Skye Bank recently confirmed it was planning to raise about N30 billion via a Rights Issue scheduled for this quarter. Whilst this plan has been on the cards for some months now it did arouse some ironies for us at Nairametrics. Here are the top 5 ironies

1)Amount its Raising equals market cap

Skye Bank is looking to raise about N30 billion in rights issue (raised about N50b in 2013). However, the market capitalisation (value) of the bank currently stands at N29billion and just N1 billion shy of what it plans to raise. It means that for Skye Bank to raise N30 billion, it probably needs to issue a one for one rights issue at the current price of N2.18 (shares down 17% year to date). This probably means there will be some action on this share price in the coming days and weeks which may fizzle out again depending on the price momentum.

2)Didn’t they just spend N126b on Mainstreet bank

Just last year Skye Bank spent a whopping N126b (net N103 billion) in acquiring Mainstreet Bank Plc from AMCON. At the time the deal was consummated, Skye Bank was valued at just over N32 billion. Skye Bank nevertheless has a book value of about N141 billion suggesting it may be undervalued. However, many investors doggedly believe otherwise and continue to value the stock at a huge discount to its book value. A rights issue after dolling out N126 billion seems rather odd to us.

3)Results

Skye Bank perhaps in anticipation of this equity raising activities intensified efforts to ensure results for the first and second quarter of this year was stellar. In Q1 it grew pre-tax profits by 81% YoY and followed that up with another 47% growth in pre-tax profits in the second quarter. This is the same bank that posted a 47% drop in profits in 2014. What exactly could have changed in the last 6 months? Is the economy any better?

4)Bonus

Skye Bank also this year issued a 1 for 20 Bonus issue as it shelved any plans for cash dividend. Issuing out an equivalent of 5% of its total equity just before another round of right issue suggest a disproportionate set of goals. Why bother giving out new shares as bonus issues when you will be going back to those same shareholder to raise money. Whatever impetus that move provided has surely evaporated with the price firmly rooted N2.10-2.20.

5)Bad Loans

Over 30% of its loans are in the upstream sector and about 13% of its non-performing loans figure of 5% are also from the oi and gas sector. The company also confirmed in its earnings calls that it had restructured some of these loans basically extending tenor. Some analyst may see this as basically deferring the evil day or a necessary evil considering the current economic situation.

6)Change of CFO

We also learnt Skye Bank has changed its CFO again. This will gather is the second time in recent times. For a bank to be changing the CFO just before a capital raising exercise is like substituting a striker just before the game has started. How this will affect Skye Bank is yet to be seen.
MORE ON...http://nairametrics.com/6-things-to-note-before-you-plunge-into-skye-banks-up-coming-rights-issue/

Skye Bank recently confirmed it was planning to raise about N30 billion via a Rights Issue scheduled for this quarter. Whilst this plan has been on the cards for some months now it did arouse some ironies for us at Nairametrics. Here are the top 5 ironies

Amount its Raising equals market cap

Skye Bank is looking to raise about N30 billion in rights issue (raised about N50b in 2013). However, the market capitalisation (value) of the bank currently stands at N29billion and just N1 billion shy of what it plans to raise. It means that for Skye Bank to raise N30 billion, it probably needs to issue a one for one rights issue at the current price of N2.18 (shares down 17% year to date). This probably means there will be some action on this share price in the coming days and weeks which may fizzle out again depending on the price momentum.

Didn’t they just spend N126b on Mainstreet bank

Just last year Skye Bank spent a whopping N126b (net N103 billion) in acquiring Mainstreet Bank Plc from AMCON. At the time the deal was consummated, Skye Bank was valued at just over N32 billion. Skye Bank nevertheless has a book value of about N141 billion suggesting it may be undervalued. However, many investors doggedly believe otherwise and continue to value the stock at a huge discount to its book value. A rights issue after dolling out N126 billion seems rather odd to us.

Results

Skye Bank perhaps in anticipation of this equity raising activities intensified efforts to ensure results for the first and second quarter of this year was stellar. In Q1 it grew pre-tax profits by 81% YoY and followed that up with another 47% growth in pre-tax profits in the second quarter. This is the same bank that posted a 47% drop in profits in 2014. What exactly could have changed in the last 6 months? Is the economy any better?

Bonus

Skye Bank also this year issued a 1 for 20 Bonus issue as it shelved any plans for cash dividend. Issuing out an equivalent of 5% of its total equity just before another round of right issue suggest a disproportionate set of goals. Why bother giving out new shares as bonus issues when you will be going back to those same shareholder to raise money. Whatever impetus that move provided has surely evaporated with the price firmly rooted N2.10-2.20.

Bad Loans

Over 30% of its loans are in the upstream sector and about 13% of its non-performing loans figure of 5% are also from the oi and gas sector. The company also confirmed in its earnings calls that it had restructured some of these loans basically extending tenor. Some analyst may see this as basically deferring the evil day or a necessary evil considering the current economic situation.

Change of CFO

We also learnt Skye Bank has changed its CFO again. This will gather is the second time in recent times. For a bank to be changing the CFO just before a capital raising exercise is like substituting a striker just before the game has started. How this will affect Skye Bank is yet to be seen.
MORE ON...http://nairametrics.com/6-things-to-note-before-you-plunge-into-skye-banks-up-coming-rights-issue/

Japan now produces yam by using vine which farmers plant by using machine. Beer and Spirit are extracted from Yam also.

◾Ghana has overtaken Nigeria in yam exportation as the quality of the produce from Nigeria has dropped due to high dependent on traditional planting system, the International Institute of Tropical Agriculture has said.
◾The institute’s Project Manager, Yam Improvement for Income and Food Security in West Africa, Dr. Nobert Maroya, said this in Ibadan during a meeting of the IITA’s scientists with top seed production companies from different parts of the country.
◾He, however, said that the project had developed high ratio propagation technologies such as vine cuttings, aeroponics and bioreactor to address the constraints of quality and multiplication in seed yam production. Maroya told participants that for Nigeria to profit from the huge financial gain in yam exports, it must develop efficient seed production, distribution and quality assurance systems.
◾Japan and Ghana have taken steps that placed them ahead of Nigeria among Yam exporting nations.
◾Ghana yam exporters have an association that determine quality and quantity of yam meant for export. Nigeria began the exportation of yam a long time ago when the product was being exported to Europe from Nasarawa State. At a point, the yam was rejected because of low quality.
◾In Japan, beer and spirit are extracted from yam. Japan is now producing yam by using vine, which the farmers plant with machine. The way they are going, they will soon become the biggest producer of yam even though it originated from Nigeria and other parts of Africa.
◾Maroya, however, said that the objective of the IITA was to help increase the quality of the produce, adding that there must be quality control in each stage of yam production.
more on....http://nairametrics.com/nigerias-yam-export-drops-as-ghana-and-japan-overtake/

Dubious Nigerian importers, in connivance with rice merchants in Thailland, are set to dump contaminated rice from Thailand in Nigeria beginning from this month.
◾ Thai Rice Exporters Association declared in March that government had struck preliminary deals to export a total of 760,000 tons from its huge stockpiles to Nigeria and some other African countries in August.
◾The rice would be sold at around $430 a ton, netting the exporting country over N78.32 billion ($325 million). New Telegraph had reported in March this year that Thailand may start auctioning some 14.4 million metric tons of its poor quality rice to Nigeria and other foreign buyers from August. Of the 17 million tons stockpiled, some 14.4 million metric tons are substandard while about 694,000 tons are rotten.
◾The Thailand government had disclosed that only 2.35 million tons were of good quality. Honourary President of the Thai Rice Exporters Association, Chukiat Opaswong, explained that the rice would also be supplied to Mozambique and South Africa.
◾Thailand, the world’s secondlargest rice exporter, currently has about 14.5 million tons of rice in stockpiles built under a generous rice subsidy scheme run by a government that was overthrown by the military in May 2014.
◾The president said that the current military government planned to sell off the rice over two years and above in its warehouses to Nigeria and other countries, although industry observers said that selling so much in such a short period would be difficult.
◾Most of the rice coming to Africa are parboiled. It was revealed in March that the contaminated rice, which is set to flood Nigeria and other African markets, was not suitable for human consumption. Nigeria is one of the major importers of the commodity from that country.
more on... http://nairametrics.com/are-they-importing-expired-rice-to-you/

An estimated N2.7 trillion ($13.6 billion) worth of direct investment is part of the immediate benefits accruing from President Muhammadu Buhari’s recent state visit to the United States, the Presidency claimed yesterday.
◾In a statement, yesterday, Senior Special Assistant to the President on Media and Publicity, Mallam Garba Shehu, said besides the economic benefits, plans were already in motion to lift hindrances to the flow of military support for Nigeria’s war against insurgents in the North-East.




According to him, “some of the more immediate benefits of the President’s trip to the US include: the proposed $2.1 billion fund from the World Bank for the re-development of the northeast battered by Boko Haram; $5 billion from US investors in Nigeria’s agriculture sector; $1.5 billion investment in the Nigerian’s health sector; and another $5 billion investment from the US in our country’s power sector.

“Also, as things stand, the embargo on weapons sales to Nigeria is in the process of being removed.

The trip to the US by President Buhari was definitely very successful and beneficial to Nigeria. Only those rabidly determined to find faults unnecessarily will cook up falsehood in a futile effort to rake up murk where none exists.
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This is for the investor trying to form an opinion on the outlook for Forte Oil as the company continues its growth from a downstream one into a diversified energy company. Having the troubled transition of Oando Plc from a purely downstream business into an integrated energy company at the back of the mind, one should be better prepared to position for Forte Oil performance over the next three years.

Downstream

In the past four years, Forte Oil has made significant strides in its downstream operations; ventured into the Power sector and competed on divestment of upstream assets, albeit unsuccessfully. The Company’s share price has set records on the level of capital appreciation returned in 2013 & 2014; FO was officially included in Morgan Stanley’s MSCI Emerging Market index (alongside ETI) in 2014 and was celebrated as one of the top 100 companies in Nigeria.

However despite these, the company’s main business remains the downstream business, which generates over 85% of revenues. Although sales volumes are up and the Forte Oil has regained lost market share in the PMS sub-segment, sale of other fuels seems to be crawling along while delayed payment of subsidies and bridging claims continue to constrain profit margins and cash flow. The Company has declared forex translation losses consistently over the past three years due to its downstream business – imports in foreign currency and sells in naira. Sounds similar to another oil and gas company you know?

Becoming an Integrated Energy Company

The move towards becoming an energy company, i.e. diversifying into power and the upstream segment among other things, is primarily targeted at boosting profits by adding high margin businesses into its portfolio. This is well reflected in the company’s FY14 gross margins per segment – Power (52%) Lubricants and greases (37%), Chemicals (26%) Fuels (7%). The power business profit margin is supported by the pioneer status granted the firm in 2014.

Power Segment

The positive outlook for the power segment is also supported by the low capacity utilization of the plant currently. Geregu has operated at less than 40% of installed capacity since 2013 due to the major overhaul required and gas supply problems. Forte Oil requires capital to complete the overhaul and boost power generation, which would in turn boost revenues and profits.

Chemical Business

I’m concerned about the contribution of the chemicals business, i.e. sale of drilling chemicals mostly to the IOCs; it is likely to decline in the second half of 2015 due to the downturn in E&P activities in the country as oil prices fall. Although revenues grew in H1 2015, gross margins thinned as business retention became challenging. Going forward the segment is likely to face major headwinds as drilling activities decline on low oil prices, non-passage of the PIB etc.

The company is looking to boost this business by offering other services and acquiring drilling equipment. Except they intend to acquire other drilling equipment used for logging, encasing wells etc, this could imply an intention to acquire rigs. The type of drilling rigs that would make any acquisition sense now are semi-submersible rigs. These are very expensive but there is a huge demand for them offshore West Africa. The company would require massive investment to acquire one of these but on the flip side, this would guarantee demand for their drilling chemicals while earning good rates for drilling.

Upstream Segment

The other upstream segment, FB Energy Development Company (FBEDC) is unlikely to contribute to the company’s profitability before 2017 going by their current status and lead time for closing upstream transactions in Nigeria. The company has bidded relatively well on divested assets, but has not been able to close deals for any oil producing assets. However, a rich pipeline of oil producing assets remain on the market, with more expected before the end of 2015; FBEDC is well positioned to bid on these but funding is likely to be a challenge. With current oil prices and continued challenges with militancy and oil theft in the Niger Delta, an acquisition asset must yield really high NPVs to attract funding.


More on Downstream

Downstream, the company has increased its market share in the PMS segment on the back of their investment in mega retail outlets, rebranding and good supply arrangements. However, that performance doesn’t seem to be replicated across other fuels and segments. The Company’s share of sales of diesel has actually dropped relatively to previous years due to tighter competition in the space. Forte oil is no major player in the Aviation fuel space dominated by Total and Conoil. Efforts to regain lost grounds in the lubricant space seem to be crawling at best.

Expanding its downstream Portfolio

The company also intends to add LPG, LPFO and Bitumen supply into its business portfolio. These are also high margin businesses in the fuel retailing category. However, it will face major competition to carve out market share, especially in the LPG & LPFO space dominated by Oando, which has invested a lot of capital to position its brand in the market. Forte would need to equally invest a lot of funds to position its gas cylinders and LPFO to carve out market share.

Need for More Capital

Thus Forte Oil is in need of major capital injection to support its business diversification and cannot depend on debt to achieve its aim. Its interest-bearing debt to equity ratio stood at 91% as at H1 2015, while total debt to equity was above standard benchmarks of 150% (Forte: 166%). These ratios even represent an improvement on its condition in H1 2014, when they stood at 93% and 214% respectively. In my opinion, the company cannot accommodate more debt in any form, based on its current cash flows. In the last three years, the company has averaged a cashflow from operations to interest paid ratio of 0.53x. It dropped to 0.14x in H1 2015.

Diversification Plans

This for me is the make or break decision around Forte Oil – funding the diversification plan. If they go the Oando way and depend on the cash flow from the downstream business, they could end up having to do several right issues and equity offering over time to make up for the imbalance in their funding mix as that route will lead to more short term borrowing eventually. Furthermore, since very little is known about their capacity to handle upstream oil assets, a partnership is not negotiable. Communication also needs to improve about the strategic focus of the upstream E&P business. Lekoil is doing a good job on that.

Best way to run its proposed Upstream Business

The ideal approach would be for the company to partner with a PE or VC firm to acquire its upstream assets and raise equity from the market via private placement/rights issue, some of which could be deployed into its power business. The Company has hinted that it was in talks with potential equity investors, but I suspect an equity offer could still be in the works. I’d rather wait this out however, if it happens before the strategic partnership
more on....http://nairametrics.com/going-upstreams-what-forte-oil-needs-to-do-to-avoid-jumping-in-like-oando/

◾President Muhammadu Buhari has approved the appointment of Dr. Emmanuel Ibe Kachikwu as the new Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC).
◾Kachikwu, an Executive Vice Chairman of ExxonMobil Africa, reportedly met with President Buhari on Monday night to finalise talks on his vision for the state owned corporation, which has been enmeshed in allegations of corruption and dubious accounting practices.
◾Kachikwu is a distinction graduate of Law from the University of Nigeria Nsukka and Nigerian Law School. He has worked as an Investment Attorney in USA, as General Counsel with Texaco Upstream and Downstream in Nigeria and as Executive Vice Chairman of Mobil Producing Nigeria Unlimited and General Counsel for ExxonMobil Nigeria affiliate Upstream and Downstream Companies in Nigeria.
◾He has forayed into business, working as Chairman and CEO of his own Companies in Downstream Petroleum, Law Practice and consultancy and Publishing. He has lectured in Nigeria, at Harvard and various Institutions around the world as either a visiting lecturer or professor in Law.

more on ...http://nairametrics.com/breaking-buhari-appoints-new-gmd-for-nnpc-find-out-who/

◾The Bureau of Public Enterprises (BPE) has hinted that the Federal Government may be planning to eventually privatize the nation’s refineries so as to mitigate the challenge of fuel scarcity in the country.
◾The Nigerian National Petroleum Corporation (NNPC) has four refineries, two in Port Harcourt (PHRC), and one each in Kaduna (KRPC) and Warri (WRPC). The refineries have a combined installed capacity of 445,000 bpd.
◾The refineries have been comatose until recently, when three out of Nigeria’s four oil refineries resumed activity and are operating at between 60 per cent and 80 per cent of their capacity.
◾The Director-General, Benjamin Dikki, who expressed government’s desire to privatize the
refineries, said that the plan would require the passage of the correct Petroleum Industry Bill (PIB).
◾Dikki, while receiving a delegation from Greenpark Worldwide, led by a one-time British High Commissioner to Nigeria, Sir Richard Gozney, expressed the optimism that the 8th National Assembly would have the opportunity to review the original Bill of 2008, which when passed would achieve the desired result for Nigeria
more on....http://nairametrics.com/bpe-says-fg-may-eventually-privatize-all-four-refineries/