Hello everyone, welcome to @Nairametrics Corporate News Roundup for the week ended July 28th 2018. This thread is made possible by @BluechipTechNG
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@Nairametrics @BluechipTechNG We also use this opportunity to welcome our new followers and those reading this thread for the first time. This is the most comprehensive roundup of business news from Corporate Nigeria.
We begin...
We begin...
@Nairametrics @BluechipTechNG 1. How time flies. Uber celebrated its 4-year anniversary in Nigeria during the week. At the event the Country Head, Lola Kassim, confirmed that Uber Nigeria was about to introduce its taxi pool to its range of products in Nigeria.
@Nairametrics @BluechipTechNG Unlike the regular Uber, taxi pooling allows riders to share cost of rides with others commuting in the same direction as they are. Interesting to note that this was very a common feature in Nigeria decades ago until the advent of "gbomogbomo" which contributed to killing it.
@Nairametrics @BluechipTechNG 2. Some believe that where others have failed, lies an opportunity for runaway success. Simple Azenabor, a Japanese-based Nigerian developer, announced plans to unveil "an indigenous messaging application,
@Nairametrics @BluechipTechNG which enables users to chat, make audio and video calls, have unrestricted numbers of group chats, as well shop for affordable and genuine products."
@Nairametrics @BluechipTechNG The app, called SoftTalk, is like WhatsApp and can help "solve local problems and create job opportunities in the country," the CEO claims.
@Nairametrics @BluechipTechNG “We do so much more than messaging; we want to empower and improve on the way messaging is done today, by giving access to users to shop, while Soft chatting and Soft talking at the same time."
@Nairametrics @BluechipTechNG "We are not in SoftTalk for revenue purposes, we are in it to solve a bigger problem and create employment in the country.”
Well, best of luck to them and their financial backers. Perhaps they can succeed where the likes of WeChat failed.
Well, best of luck to them and their financial backers. Perhaps they can succeed where the likes of WeChat failed.
3. During the week, Landmark Event Center in Lagos was the venue for the #GoogleForNigeria event. The event was attended by thousands of young Nigerians and tech enthusiasts and also had the Vice President, Professor Yemi Osinbajo, give a speech.
One of the major announcements of the day was Google's promise to deliver free internet to Nigeria via Wi-Fi hotspots in designated locations in Lagos.
Google said that it has partnered with Nigerian fiber cable network provider, 21st Century, to provide free public Wi-Fi service called Google Station, in six locations in Lagos, including the airport.
Google claims that its plan is to expand to about 200 public places in about 5 cities in Nigeria by the end of 2019.
Despite over 160 million mobile subscriptions in Nigeria, internet penetration is still at a lowly 27% so Google believes that this move will help expand its services and dominance in the country.
How Google intends to pay for this? Google claims that it will pay for this by serving display ads in the login portal. Apart from privacy issues, local advertisers stand the risk of losing even more ground to Google's massive advertising revenues from Nigeria.
Google and Facebook have basically gobbled up ad revenues in Nigeria and from what we gather most ad agencies are closing shop and laying off workers. Some are not pivoting into pure social media agencies.
4. Konga announced during the week that it is relaunching its Pay on Delivery services, months after suspending it. Konga's previous owners, Naspers, had suspended POD as it negotiated its sale to new owners, Zinnox.
The new owners claim that they are reintroducing POD after restructuring and improving its technology. “We have taken our time to restructure, improve our technology and capacity in terms of our own staff and logistics, to meet customers’ expectations.
We have invested substantially in our logistics arm, K-Express, culminating in the acquisition of new line-haul trucks, delivery vans and motor bikes to meet the commitments of not just POD,
but also achieve a minimum of 85% same day delivery of major products categories by July 2019 across the nation as mandated by the Board of Konga.”
It seems Konga has basically turned around its operating model. The company is basically looking at combining the power of online and offline retail services to get to its customers, by locating warehouses in strategic locations in the country to drive sales.
According to Konga, “In addition to pre-payment and payment on delivery, you have the additional option of ordering online to pay and collect from the nearest Konga retail store.
Our customers can also walk into any of our stores nationwide and with the help of our staff, order products we do not have in store, then pay and collect when it is delivered at the store, or we deliver it to their door-steps.
At Konga, we consider the challenges of our market and simplify things for our customers. No other e-commerce company offers these delivery and payment options on the continent.”
5. Just when it seemed that Teleology was about losing out on the acquisition of 9mobile, the company got a lifeline, after the regulators and the board of 9mobile approved an extension of the takeover timeline.
The official reason given by the parties was to "enable parties involved in the sale process to finalise the requisite transaction documentation" and facilitate transfer of the company to Teleology.
Last week, July 25, 2018, was meant to be the last of the 90-day period expected of Teleology Holdings to complete payment for the telco but it failed, throwing the entire transaction into risk of falling through.
However, it appears that the regulators have reckoned with the fact that Teleology doesn't have the cash, and might need more time to raise funds from banks and other creditors. The regulators (CBN and NCC) still have the option of calling on the reserved bidder, Smile Telecoms.
6. We have been getting news from Nipost in recent weeks, as the flagship postal agency in Nigeria continues in its transformation plans.
Last week, the Minister of Communications, Engr Adebayo Shittu, revealed that the ministry will establish five new companies from the Nigeria Postal Service (NIPOST).
The companies are: NIPOST Banking and lnsurance Company, NIPOST Property and Development Company, NIPOST Transport and Logistics Services Company, NIPOST E-government Services Company, and NIPOST E-commerce Services Company.
The Minister also said that the five new companies will take effect by the end of the year and will be recruiting hundreds of Nigerians in each company. Nipost has also put up its new Nipost Tower office space on Adeola Odeku to let as part of its revenue generation drive.
I worry when I see the government trying to compete with the private sector, however, this is one transformation I have keen interest in seeing how it pans out.
This is @Nairametrics Thread BTU by @BluechipTechNG
7. If you love to hate the ever ubiquitous “Keke”, then your hate is about to get even deeper.
Last week, Indian company Mahindra & Mahindra Limited unveiled its three-wheeler Alfa P400 tricycle for the Nigerian market.
Last week, Indian company Mahindra & Mahindra Limited unveiled its three-wheeler Alfa P400 tricycle for the Nigerian market.
The seven-seater tricycle is powered by a 400cc gasoline engine and comes in both passenger and cargo variants. From all indications, this tricycle is expected to carry even more passengers and competes directly with small-seater buses.
It is unclear how much havoc this will add to the already chaotic traffic situation caused by the regular Kekes. However, what interests me is the cargo variant which I think will be very popular for moving goods faster and more effectively.
I can imagine e-commerce companies who rely on bikes for delivery hopping in on this tricycle option.
8. Lasaco Insurance Plc introduced the use of power bikes to help facilitate prompt claim settlements.
Explaining how it works, Managing Director, Segun Balogun, explained that “the riders would inspect the accident vehicle at the scene of the accident, adjudge the claim, and offer an on-the-spot settlement.
This novel solution would promote efficient claim settlement response and elicit a more enduring relationship between insurance underwriters and their clients, as many people will, through it, have more confidence in insurance, especially automobile insurance operations.”
So basically, if you have a road mishap that requires the attention of the insurance firm, you call them up and they show up at the location to conduct an on-the-spot assessment.
This basically takes away the inaccuracies that are often associated with sending pictures of accidented vehicles days after accidents occur.
I believe this helps the insurance company to properly verify claims and assess risks, even though Segun Balogun claims that the purpose is to help "make policy holders get compensation faster and more robustly."
9. Energy Commercial Bank, promoted by serial and often controversial business man, Jimoh Ibrahim, announced it is on course to receive a final approval from the Securities and Exchange Commission (SEC) to float shares to the Ghanaian investing public by August 2018.
The bank wants to float over 50% of shares to Ghanaian institutional and retail investors and expects to raise over 340 million Ghanaian Cedes, helping the bank hit ¢400 million market capitalization.
10. The board and management of the NNPC disclosed plans to secure a 20% stake in the 2.8 million metric tonne per annum Nagarjuna fertilizer project and provide the gas feedstock.
According to the statement, the Nagarjuna fertilizer project, which is expected to kick off in Akwa Ibom State, was designed to produce 2.8MTPA of Urea and 0.22MTPA of Ammonia
11. Dangote Sugar Plc has blamed a combination of smuggling of unlicensed sugar and the bad roads in Apapa for its weaker than expected 2018 Half year results.
The company reported a pre-tax profit of N11.5 billion for the quarter ending June 30th, 2018, a 37% drop from the N18.2 billion posted in the same period in 2017.
Topline revenue also dropped by 27% to N42.9 billion for the quarter. According to the company, the influx of smuggled sugar has severely affected their market share and competitive pricing, leading to a cut in prices.
Global sugar prices have dropped this year compared to last and Dangote Sugar explained that "Year on year there has been a reduction in the average selling price
(currently N13,160/50kg bag vs N16,170/50kg bag in 2017) as the impact by the downward trend in global sugar prices comes through.”
12. The Allianz Group disclosed its acquisition of 99.03% shares in Nigerian insurer, Ensure Insurance Plc, from its core shareholder, Greenoaks Global Holdings Limited (GGH). The company will now operate in Nigeria as ‘Ensure – a company of Allianz’.
13. Recall that in April 2018, the group made €75 million and $25 million investments in African infrastructure projects by investing into Emerging Africa Infrastructure Fund (EAIF).
Also, in June 2018, Allianz Group announced the signing of an agreement to acquire an 8% stake in Africa’s leading re-insurer, Africa Re, a transaction which made Allianz Group one of the largest shareholders in the company.
13. Andela announced during the week that it is launching its pan-African technology hub in its fourth African market, Kigali, Rwanda.
Andela said that it is partnering with the Government of Rwanda through the Rwanda Development Board, an organization responsible for transforming the country into a dynamic global hub for business, investment, and innovation.
They claim that Kigali was chosen as a strategic location for Andela’s first pan-African hub, due to its strong existing infrastructure and ease of access for developers across the continent.
Through the partnership, RDB will support Andela’s efforts to build a pan-African workforce and support the development of Rwandan and other African talents.
14. Helicopter company, Caverton Offshore Support, on Tuesday reported a blistering 65% rise in pre-tax profits for the half-year ended June 2018. The company reported a pre-tax profit of N1.5 billion compared to N938 million reported same time in 2017.
The company also reported revenues of N14.2 billion in the first half of 2018, up from N10.1 billion for the same period in 2017. Income from the company’s main revenue generating earner, Helicopter/Contract, rose from N9.3 billion to N13.8 billion in the period under review.
Caverton Helicopters had reported increasing earnings growth since 2017 as oil prices ticked upwards. The company relies on upstream oil and gas companies to make money.
Higher oil prices suggest higher revenues for oil companies and more money to spend on expensive services such as those provided by Caverton.
Last March, Caverton Offshore Support Plc, the parent company of Caverton Helicopters, unveiled eleven newly acquired helicopters, and by so doing, increased its total fleet to seventeen.
15. Sterling Bank on Tuesday apologised for a subtle banter tweet it posted via its Twitter handle two Fridays ago. In a tweet posted on Tuesday, the bank “tendered its unreserved apology to all banks, the likeness of whose logos and buildings featured in the referenced tweet.”
Nairametrics gathers that a certain bank reported the tweet to the CBN after declining to get involved in the tweet banter. Subsequently, the Central Bank sent Sterling Bank a letter requesting that it immediately “pull down the post from its Twitter handle,
write and unreserved apology, through the same medium, to all banks whose logos and buildings you used in the advert and explain within twenty-four hours why regulatory sanctions should not be imposed on your bank.”
16. Nairametrics was able to get a back story on how the incredible tweet was put together. Apparently, members of the marketing team of the bank brainstormed on creating something interesting for their followers.
After much brainstorming, they came up with a concept and decided to push out the tweet.
According to a source familiar with the origin, they never expected the tweet to go that viral and were surprised at the reaction to the tweet by their followers and rival banks who took part in the banter.
Nairametrics also gathers that some of the banks mentioned were livid about the tweet and almost got the bank fined by the CBN. Ironically, most of the social media comments following the tweet were more in fun.
Some actually praised it as a form of creative marketing and wanted to see more of such from rival companies. The CBN unfortunately does not allow such banter and frowns at it.
17. In order to increase the company’s profit and record financial growth, Lafarge Africa has approved a new right issue of up to N90 billion.
The Chief Financial Officer (CFO) of Lafarge Africa Plc, Bruno Bayet, made this disclosure following the release of its H1 2018 financial statements for the year ended 30 June, 2018.
Lafarge reported a loss before tax of N6.35 billion for the period ended June 2018, as against profit before tax of ₦18.16 billion reported for the period ended June 2017.
The company has since seen its share price drop from as high as N75, about 3 years ago, to under N30 as it struggles to stabilize its loss-making South African entities.
Nairametrics gathers that this year, market leader, Dangote Cement, dropped cement prices, a move it has so often used to stifle competition. In fact, we understand that the company adopted a uniform pricing model that has undercut market share for smaller competitors.
18. Promasidor Nigeria Limited (PNL) has secured a N5.6 billion loan facility from the Bank of Industry (BoI). This was confirmed by the company’s Finance Director, Per Kristensen. He also said that it will accelerate the company’s growth.
According to Kristensen, the BoI loan would be used for additional machinery, and factory expansion which would create jobs for Nigerians and positively impact on the country’s economy.
The BoI loan would be used for additional machinery, and factory expansion and would be repaid over a seven-year tenor, including a 12-month moratorium.
In a similar vein, the company had concluded plans in partnership with IFC, a member of the World Bank Group, to inject a $25 million loan into its production, with a view to increase efficiency and expand its brand portfolio.
19. The race for mega insurance companies is on. Last week, NAICOM released the new capitalisation requirements for insurance firms in the country.
Under the risk-based capitalisation requirements, each cadre namely life, non-life and composite insurance firms has had its capital base divided into three tiers.
Life insurance firms now have three capitalisation tiers. Tier one companies will be required to have N6 billion as capital; tier two life insurance firms will be required to have N3 billion, while tier 3 firms will maintain the current requirements of N2 billion.
Non life insurance firms will now have three tiers. Tier 1 non life firms are mandated to have a capital base of N9 billion; tier 2 firms in this segment are expected to have a capital base of N4.5 billion, while tier 3 firms will maintain the current capital base of N3 billion.
Insurance companies operating in the composite segment, that is all classes of insurance, now have three tiers. Companies operating in the tier one will be required to have a capital base of N15 billion;
tier two firms will need to have a capital base of N7.5 billion, while those in tier 3 will maintain the current capital base of N5 billion. Insurance companies have till January 2019 to comply.
Expect to see major moves in the coming weeks following this announcement. A lot of cash has been on the sidelines especially from foreign investors looking to snap up some of the cheap insurance companies.
FPI numbers will be interesting come Q4.
FPI numbers will be interesting come Q4.
That's our thread for the week.
Special thanks to our sponors @BluechipTechNG for keeping all the support. July makes it one year of bringing you Corporate News Roundup and we have the to thank for keeping this thread alive.
Special thanks to our sponors @BluechipTechNG for keeping all the support. July makes it one year of bringing you Corporate News Roundup and we have the to thank for keeping this thread alive.
And to all our followers who wait till 10pm to read our compilation, thanks too for all the retweets, comments and words of encouragement.
@Nairametrics appreciates its followers and so do I.
@Nairametrics appreciates its followers and so do I.
