It is now over a year since the coronavirus outbreak was declared a global pandemic by the World Health Organisation (WHO). The plague has claimed over five million lives and infected over 200 million people worldwide.
Beyond the rising cases, the pandemic’s impact has also touched almost every aspect of modern life, upending many business organisations, a number of whom have resorted to downsizing and laying off staff in order to cut down costs, improve operational capacity, and effectively deliver on set targets.
However, despite the daunting challenges and dire outcome on the fortunes of many, some result-driven companies have been able to navigate their organisations to optimal operational effectiveness, efficiency, and visibility.
This was made possible through the application of ingenious management practises, prudent management of resources, as well as excellent, proactive and innovative solutions and ideas in achieving set goals and objectives.
After analysing the financial performance of the 30 biggest listed companies on the Nigerian Exchange Limited (NGX), BusinessDay selected ten most efficient companies who despite the glaring challenges, have managed to maintain the highest profit margin.
The criteria for selection were net profit margin, a commonly used profitability ratios to gauge the degree to which a company or a business activity makes money.
According to Investopedia, Net profit margin helps investors assess if a company’s management is generating enough profit from its sales and whether operating costs and overhead costs are being contained.
Using nine months of financial statements, BusinessDay analysis showed GTCO, BUACEMENT, Zenith Bank, DANGCEM, Lafarge, MTN, Stanbic, Nestle, FBN and SEPLAT are the most efficient companies in 2021.
Guaranty Trust Holding Co PLC (GTCO) topped the list of the most efficient companies by profit margin. The Holding company recorded revenue of N318.5 Billion and a profit after tax of N129.4 billion in the first nine months of 2021; thereby leading other listed companies with a net profit margin of 40.6 percent.
This development also means GTCO is also the leading company in the banking sector in terms of efficiency.
The Holding company’s net interest income declined to N162.9billion this year from N189.7billion in the same period last year.
Their net cash from operating activities increased to N282.4billion in the first nine months of 2021 compared to N158.2billion earned last year.
BUACEMENT lands second in terms of most efficient companies and the first in the Cement sector, thanks to a profit margin of 35.3 percent. The cement producing company recorded a revenue of N186.9 billion and N65.9 billion profit after tax in the nine months to September of 2021.
The company saw an increase in cost of sales to N99.7billion in the first nine months of 2021 from N86.3billion incurred in the same period last year. Meanwhile, their operating profit increased to N75.7billion from N62.3billion in the previous year. Their share price reduced to N67.05, 31th December, 2021 from N74.5 the previous day.
ZENITH Bank stood at third position with a profit margin of 30.96 percent. Their financial statement shows that the most capitalised company in the Banking sector made a profit after tax and gross earnings of N160.59 billion and N518.67 billion respectively.
The Bank’s net interest income declined to N308.8billion this year from N318.8billion in the same period last year.
Their net cash from operating activities increased to N193.5billion in the first nine months of 2021 compared to N193.1billion earned last year.
Dangote Cement (DANCEM), which is the most capitalised stock, had a profit margin of 27.22 percent. The Cement industry is the second listed company on the Nigerian Exchange Limited (NGX) to record a revenue of N1trn on the heels of MTN. DANGCEM recorded revenue of N1.02 trillion with a profit of N278.25 billion in the first nine months of 2021.
The cement company incurred an increase in the cost of sales to N403.4billion in the first nine months of 2021 from N317.5billion incurred in the same period last year. Meanwhile, their operating profit increased to N440.3billion from N287.9billion in the previous year.
Their net cash generated from operating activities declined to N449.1 billion from N458.6billion.
Lafarge was also among the top ranking firm in terms of efficiency; the company’s profit margin resulted in 18.3 percent. This was achieved after recording a profit after tax of N40.39 billion and a revenue of N219.20 billion in the first nine months of 2021.
Lafarge recorded an increase in their cost of sales to N155.2billion in the first nine months of 2021 from N123.5billion incurred in the same period last year. Their operating profit increased to N48.1billion from N41.1billion in the previous year.
Cash generated from operating activities increased to N69.5 billion in the first nine months of 2021 compared to N62.7 billion in the same period last year.
MTNN which is the first listed company on the Nigerian Exchange Limited (NGX) to record a trillion revenue of N1.2 trillion has a profit margin of 18.26 percent. The leading telecommunication company recorded a profit after tax of N220.3 billion in the first nine months of 2021.
The company’s operating profit increased to N418.4 billion from N307billion in the first nine months of 2020. Cash generated from operating activities declined to N292.8 billion in the nine months to September 2021 financial report compared to N229.8 billion in the same period last year.
Read also: Nigeria’s 10 most profitable companies in 2021
STANBIC: Stanbic Bank has a profit margin of 15.27 percent. The bank reported a profit after tax of N39.95 billion and N146.61 billion in revenue in the nine months to September of 2021.
Stanbic’s net interest income declined to N54billion this year from N56.3billion in the same period last year.
There was a huge decline in cashflow from operating activities to N15.7billion in the first nine months of 2021 compared to N195.8billion earned last year.
NESTLE has a profit margin of 12.84 percent. The company earned N261.59 billion in the first nine months of 2021 while their profit after tax was N33.58 billion in the same period under review.
The company saw an increase in the cost of sales to N160.3billion in the first nine months of 2021 from N122.7billion incurred in the same period last year. Meanwhile, their operating profit increased to N56.1billion from N50.2billion in the previous year.
The cash generated was N90.9billion in the first nine months of 2021 compared to N59.9billion generated in the same period last year.
FBN Holdings Plc net net profit margin stood at 9.55 percent. The Bank recorded revenue of N427.03 billion in the first nine months of 2021 and N40.79 Billion in the comparable period of 2021.
The Bank’s net interest income declined to N163billion this year from N192.7billion in the same period last year.
Their net cash generated from operating activities increased to N19 billion in the first nine months of 2021 compared to N293.4billion used in operating activities last year.
SEPLAT Energy has a profit margin of 7.6 percent. They recorded a profit after tax of N13.89 billion and a revenue of N182.68 billion in the first nine months of2021.
The company saw an increase in the cost of sales to N124.6billion in the first nine months of 2021 from N103.9billion incurred in the same period last year. Meanwhile, their operating profit increased to N62.6billion from the loss of N27.7billion in the previous year.
The cash generated was N65billion in the first nine months of 2021 compared to N74.8billion generated in the same period last year.
