The total earnings of five listed companies in Nigeria are projected to improve to N17.6 billion in the second quarter of 2024, according to data compiled by BusinessDay.
The firms are Sterling Financial Holdings Company Plc, VFD Group Plc, Sunu Assurances Nigeria Plc, Eterna Plc and International Energy Insurance Plc.
Sterling Financial Holdings Company projected an increase in its after-tax profit to N10 billion in Q2 from N7.5 billion in Q1, while VFD Group and Sunu Assurances Nigeria see their profits rising from N2.6 billion and N2.45 billion respectively to N3.3 billion and N2.85 billion.
Eterna forecast a profit of N1.04 billion as against a loss of N4.1 billion, while International Energy Insurance projected a profit of N504 million compared to a loss of N1.7 billion.
Ifeanyi Nwankwo, a financial analyst, said: “The anticipated profit growth among these leading firms is a testament to the resilience and adaptability of Nigerian businesses, highlighting the positive impact of strategic investments and economic reforms aimed at fostering a conducive business environment.”
Business activities in Africa’s most populous nation rose to the highest in four months in May 2024 as inflationary pressures eased to a one-year low, according to the latest Purchasing Managers’ Index (PMI) by Stanbic IBTC Bank report.
The report analysed that the headline index improved to 52.1 from 51.1 in the previous month. Readings above 50.0 signal an improvement in business conditions, while those below show deterioration.
“May data pointed to a pick-up in growth in the Nigerian private sector, with both output and new orders increasing at sharper rates than in April. Rates of expansion remained slower than the respective series averages, however, as high prices continued to limit demand,” the report said.
Also, the economy in Q1 grew at a faster pace of 2.98 percent compared to 2.31 percent reported in the same period last year, data from the Gross Domestic Product (GDP) disclosed.
According to the report by the National Bureau of Statistics, “The performance of the GDP in the first quarter of 2024 was driven mainly by the Services sector, which recorded a growth of 4.32 percent and contributed 58.04 percent to the aggregate GDP.”
It said the agriculture sector grew by 0.18 percent, from the growth of -0.90 percent recorded in the first quarter of 2023.
“The growth of the industry sector was 2.19 percent, an improvement from 0.31 percent recorded in the first quarter of 2023. In terms of share of the GDP, the services sector contributed more to the aggregate GDP in the first quarter of 2024 compared to the corresponding quarter of 2023,” the report added.
However, despite the positive outlook for these companies, Nwankwo noted that firms continue to face significant challenges such as foreign exchange volatility, regulatory uncertainties, and infrastructure deficits.
These issues have led to a more pessimistic outlook for other firms, which expect their earnings to decline in the second quarter.
According to the Nigerian Exchange Limied, these companies include Geregu Power Plc from N14.4 billion reported in Q1 to N9.2 projected in Q2; Alico Insurance Plc from N8.7 billion to N6.19 billion; Abbey Mortgage Bank Plc from N244 million to N177 million; FCMB Group Plc from N28.7 billion to N18.8 billion; MRS Oil Nigeria Plc from N1.99 billion to N464 million; Okomu Oil from N15.1 billion to N4.9 billion.
Others are Custodian Investment Plc from N10.7 billion to N5.7 billion; AXA Mansard Insurance Plc from N12.8 billion to N12.4 billion; Jaiz Bank Plc N5.8 billion to N4.9 billion; Nem Insurance Plc from N10.5 billion to N8.2 billion and TotalEnergies Marketing Nigeria Plc from N11.4 billion to N4.2 billion.
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