Nestle Nigeria: Strong Earnings Growth in 2018FY Masks Weakness in Q4-18

07/03/2019

NESTLE published Q4-18 and 2018FY results after close of market yesterday, with EPS decline of 7.9% y/y in Q4.

According to Cordros Capital, the y/y EPS decline was weighed by significantly higher operating expenditure, higher effective tax rate, both of which offset the increase in gross margin and net finance income. On the 2018FY EPS of NGN54.26 (+27.5% vs. 2017FY), the board has proposed a final dividend of NGN38.50/s, in line with our estimate, and equates to a yield of 2.55% on yesterday’s closing price.
Q4-18 revenue grew by 9.1%/ y/y, but was below our estimate by 4%. Compared to Q3-18 however, revenue declined by 6.9%, and surprisingly so, given that Q4 has historically been the strongest quarter for NESTLE, from both revenue and earnings perspectives.
The quarterly revenue trend from Nigeria, specifically, is kind of revealing of stagnating volumes; +1.5% in Q2, -0.8% in Q3, and -6.7% in Q4. This suggests that barring a major improvement in the macros, the company would have to raise prices to achieve a meaningful revenue growth in 2019. Looking closer at product segments, NESTLE’s q/q revenue decline in Q4 is linked to the Food segment where volume declined by 11% q/q (+9% y/y), from 4% q/q (12% y/y) growth in Q3-18. Elsewhere, the Beverage segment returned to growth (+9% y/y and 1% q/q) in Q4-18, following a marginal decline in Q3-18 (-1% y/y).
In Q4-18, CoGs grew at slower rate of 4.3% y/y, consequently producing gross profit growth of 11.1% y/y. Gross margin during the period came in line with our estimates of 44.0%, 156 bps higher y/y but below the record high 45.1% in Q3-18.
OPEX surged 33.2% y/y in Q4-18, with the ratio-to-revenue coming in at 26.1% (the highest on record). OPEX is typically high in the final quarter, but last year’s increase beat historical Q4 growth rate (8% average, with a peak of 17% in Q4-17).

The full year result shows a huge 50% increase in advert spending (8% of total OPEX), which is not clear at this stage, what period of the year it was incurred. Other OPEX (26% of total OPEX), with no breakdown yet, also increased by c.16%. This offset the higher revenue growth and stronger gross margin, resulting in EBITDA declining by 9.1% y/y.
NESTLE recorded net finance income of NGN381.57 million (from NGN990.79 million net finance cost in Q3-18) in Q4-18 with 124.6% y/y increase in interest income and 99% y/y decline net FX loss (NGN96 million).

The balance of the USD loan from parent, Nestle S.A, is now significantly low at NGN5.6 billion (USD15.5 million), from NGN18 billion (USD49.7million) in 2017FY and NGN46.5billion (USD152.5 million) in 2016FY, representing 67% of total outstanding borrowings, from 74% and 92% respectively in 2017FY and 2016FY.

Positive is that this significantly immunizes the P&L from FX loss provisions in the event of currency volatility.
Operating cashflow (+194% vs. 2017FY) got a boost from higher net payables (NGN21.7bn), depreciation (75%), and earnings (+28%).
Compared to Q3-18, EPS was down 15.2%, driven by higher OPEX (+23.4%) and much weaker gross margin (-9.2%). Effective tax rate in the quarter was 15.2%, down from 28.1% and 29.5% respectively in Q3 and Q2, resulting from c. NGN3.4 billion accruing to PAT from the recognition of previously unrecognised tax credits.

Stock Market Bullish Run Halts… ASI Down 0.2%

Business Journal

07/03/2019

In yesterday’s trading session, the three-day bullish run in the domestic equities market was halted as the All Share Index (“ASI”) fell 16bps to settle at 32,121.74 points following profit taking in SEPLAT (-3.6%), ZENITH (-0.8%) and ETI (-2.1%).

As a result, investors wealth decreased by N19.4bn to N12.0tn while YTD return moderated to 2.2%. Also, activity level weakened as volume and value traded declined 48.0% and 19.6% to 208.3m units and N2.8bn respectively.

The most active stocks traded by volume were ZENITH (45.4m units),GUARANTY (23.1m units) and FIDELITY (20.2m units) while ZENITH (N1.1bn), GUARANTY (N872.9m) and DANGCEM (N171.3m) led by value.

Bearish Sector Performance
Sector performance was largely bearish as 2 of 5 stocks under our coverage closed in the green. The Banking and Insurance indices gained a marginal 3bps and 2bps respectively, buoyed by modest price appreciation in GUARANTY (+0.9%) and ACCESS (+1.7%).

On the flip side, the Oil & Gas index extended losses as sell-offs in SEPLAT (-3.6%) dragged the index by 1.7% while the Industrial Goods index trailed, depreciating by 1.3% on the back of declines in CCNN (-5.0%).

Similarly, the Consumer Goods index fell 0.1% based on losses in DANGFLOUR (-0.9%), HONYFLOUR (-3.7%) and CADBURY (-1.9%) which dragged the index.

Investor Sentiment Softens
Investor sentiment as measured by market breadth (advance/decline ratio) fell to 0.4x from 0.8x recorded yesterday.

The top outperforming stocks were JAIZBANK (+5.0%), ACCESS (+1.7%) and UCAP (+1.5%) while the laggards were led by MCNICHOLS (-10.0%), ETRANZACT (-9.9%) and CCNN (-5.0%).

Despite yesterday’s bearish performance, we expect the benchmark index to post a positive close for the week as investors position in fundamentally sound securities ahead of dividend announcements.

Unbanked Africans to Reap from Paxful, Bitmart Partnership

Business Journal

05/03/2019

Paxful, a peer-to-peer Bitcoin marketplace has announced integration onto BitMart, a premier global digital asset trading platform in the crypto-currency market with over 600,000 users worldwide.

This partnership comes at a pivotal time for the crypto community and serves as a step the two entities have taken together in the hopes of increasing liquidity and scalability.

The integration will allow users to make payments via Paxful on the BitMart platform, marking the first efforts of the latter in joining the fast-growing peer-to-peer financial revolution.
Paxful promotes a global peer-to-peer payment logistics platform for the future, allowing direct bitcoin transactions to be made from user to user, which eliminates the need for third-party interactions. With a focus on emerging markets and the unbanked, they provide a space for users to send, receive and store bitcoin.

With this partnership, users will now have direct access to one of the world’s largest digital asset trading platforms, providing increased visibility and over 180 additional trading pairs. Furthermore, integrating Paxful positions BitMart as one of the only exchanges in the world entering the peer-to-peer financial ecosystem, providing people with easier access to the entire financial world.
Features such as zero-cost listing fees and monetarily-backed ratings give room for Paxful technology to serve a vital role in facilitating seamless and rapid transactions throughout the entire platform. This means traders can make globally scaled transactions to obtain bitcoin on Paxful, which can then be exchanged for different types of currency or even reinvested into other assets on the exchange.
“We’re excited to integrate with BitMart in efforts to bring more trading options to emerging markets,” said Ray Youssef, CEO and co-founder of Paxful. “It has always been our mission to provide financial freedom worldwide and we see this as the next big step in the financial revolution.”
According to the World Bank’s Global Financial Inclusion database based on information from more than 140 countries:

Two billion people worldwide are completely unbanked.
20% of unbanked adults receive wages or government transfers in cash.
Women make up just over half (55%) of unbanked people worldwide.
The proportion of people with bank accounts worldwide grew from 51% to 62% between 2011 and 2014.

The goal of this integration is to provide education, opportunities, and allow the unbanked, under-banked, and overbanked to participate in a growing peer-to-peer financial ecosystem.
“BitMart has always been a mission to offer convenient and secure financial services in the crypto market,” said said Sheldon Xia, Founder & CEO of BitMart.

“An integration with a revolutionary company such as Paxful allows us to bring digital asset trading to those who would otherwise not have had the access. With this partnership, investors will now have direct access to multiple payment approaches including bank transfers, gift cards, debit/credit cards, and cash deposits, lowering the barriers to entry for new adopters of digital currency investment.”

Domestic Bourse Sustains Positive Streak… ASI Up 14bps

Business Journal

05/03/2019

The equities market maintained a positive performance at the close of trade yesterday as price upticks in GUARANTY (+1.1%), UBN (+4.5%) and ZENITH (+0.8%) drove the benchmark index 14bps higher to 32,173.66 points.

Consequently, market capitalisation increased by N16.3bn to N12.0tn while YTD return improved to 2.4%. Activity level also strengthened as value and volume traded advanced by 32.5% and 75.8% to N3.5bn and 400.5m units respectively.

The most active stocks for the day by value were GUARANTY (N1.2bn), ZENITH (N65.0m), FBNH (N359.0m) while DIAMOND (119.8m units), FBNH (44.3m units) and UBA (40.8m units) led by volume.

Mixed Sector Performance
Sector performance was bearish as only 2 of 5 indices we cover closed in the green. The Banking index rose 92bps as GUARANTY (+1.1%), UBN (+4.5%) and ZENITH (+0.8%) continued to experience buying interests.

Similarly, the Consumer Goods index advanced 0.3% higher following gains in DANGFLOUR (+5.8%), DANGSUGAR (+1.0%) and HONYFLOUR (+2.3%).

On the flip side, the Insurance index declined by 0.3% on the back of losses in CUSTODIAN (-2.5%) and MBENFITS (-7.4%).

Similarly, the Industrial Goods and Oil & Gas indices fell by 0.3% and 0.1% respectively due sell offs in DANGCEM (-0.5%), REDSTAREX (-9.1%), OANDO (-0.9%) and JAPAUL OIL (-8.7%) .

Investor Sentiment Weakens
Investor sentiment weakened as market breadth (advance/decline ratio) stood at 0.8x, declining from 2.5x in the previous trading session. DANGFLOUR (+5.8%), UBN (+4.5%) and NASCON (+4.2%) were the top performing stocks for the day while REDSTAREX (-9.1%), JAPAULOIL (-8.7%) and MBENEFITS (-7.4%) led laggards.

We expect a moderation in gains as we believe investors will begin to book profit in subsequent trading session.

DHL Renews Sponsorship of eCommerce Africa Conference 2019

Business Journal

05/03/2019

DHL Express in Sub-Saharan Africa (SSA) has announced that the company has once again signed on as lead sponsor for the 2019 DHL eCommerce Africa Conference and Exhibition, which will be held at the Cape Town International Convention Center on the 19^thand 20^thof March 2019.
The eCommerce Africa Conference and Exhibition, delivered by DHL, is hosted by South African conferencing company, Kinetic, and is one of Africa’s biggest opportunities to bring stakeholders in the ecommerce sector together. Later in the year, Kinetic will also bring the conference to Kenya, with the eCommerce East Africa Edition, also delivered by DHL, set to take place in Nairobi on the 12^thand 13th of June 2019.
This year’s event offers participants an opportunity to learn from world-class thought leaders, both from Africa and the rest of the globe, on the innovative strategies that will unlock e-commerce opportunities over the years to come. Delegates from some of the continent’s biggest tech, retail, banking and legal firms will be in attendance to share their experience and engage with attendees to exchange knowledge.
According to the McKinsey Global Institute’s report, Lions Go Digital, e-commerce and fintech represent two of Africa’s biggest growth opportunities, with the growth of the mobile technology market driving both of these sectors. “More than half of urban African consumers already have Internet-capable devices and this number is increasing. Online shopping in Africa could account for up to $75 billion in retail sales by 2025.”
Steve Burd, Vice President Sales for DHL Express Sub-Saharan Africa, explains that the ongoing partnership between DHL and eCommerce Africa is a good fit. “As the market leaders in express logistics in Africa, we have extensive first-hand experience of the positive impact that ecommerce has on the continent. The massive growth in cross-border and international ecommerce in Africa sees DHL working with thousands more customers across the continent each year, helping them to expand their brand across borders.”
He adds that the development of ecommerce in Africa continues to unlock major opportunities for growth. “E-commerce allows entrepreneurs and SMEs to connect with a large customer base and scale up rapidly, which accelerates the need for support services. E-commerce growth therefore has a ripple-effect on many other industries on the continent.”
“DHL’s partnership with eCommerce Africa provides us with an additional platform to connect with organisations and help them to understand key logistics considerations, and learn how to plan for and overcome any logistical challenges,” adds Burd.
Terry Southam, Kinetic Managing Director, says that the collection of thought leaders and the topics under discussion this year are aimed at creating an immediate impact for African ecommerce companies.
“From marketing to fulfilment, the world’s best will be on stage sharing best practice and innovative hacks to drive online growth. It is quite remarkable to have all of these industry leaders on the same stage – not only willing to share but actively working to grow the industry and ensure African customers receive a world-class online shopping experience. This year’s theme for the conference is ‘Conquering Scale’ and we couldn’t be happier to have a market leader like DHL on board, to help us deliver 2 key e-commerce events on the continent this year,” he concludes

BudgIT Charges Buhari to Prioritise Oil Sector Reform

Business Journal

04/03/2019

President Buhari

Following the outcome of the Presidential Election, which returned President Muhammadu Buhari to Aso Rock, BudgIT calls on the Buhari government to assign a higher priority to oil and gas sector reforms in the second phase of the administration.

Recall that President Buhari rejected last August the Petroleum Industry Governance Bill (PIGB) passed by the National Assembly after 16 years of back and forth.

Needless to reiterate, the PIGB would liberalise the governance structure of the oil industry, strengthen institutions and entrench transparency. For these critical reforms, we ask that the Bill should be reconsidered.

Also demanding dire attention is the issue of beneficial ownership. BudgIT notes that a lot of oil companies seem to operate under fake identities.

A lasting example is the case of Malabu Oil Scandal in which Dan Etete, petroleum minister under the Abacha regime, acquired “OPL 245” through Malabu Oil and Gas Limited, a camouflage of his personal company, to perpetuate one of the biggest frauds in the history of Nigeria’s oil sector.

Besides, our analysis of NEITI’s last audit report revealed: Losses arising from crude oil theft and sabotage in the upstream and downstream sectors amounted to $869.02 million and $3.55 billion respectively in 2016.

“If properly structured back into the economy, the whopping amount that goes down the drain, courtesy of these lapses, will go a long way in contributing to the economic recovery and growth plan of the government,” noted Gabriel Okeowo, BudgIT’s Principal Lead.

Lack of transparency and accountability remains the biggest challenge in the oil and gas sector. To solve this, ensuring capacity building as well as the development of effective business models that are profit-driven, calls for decisive reforms can no longer be ignored.

Moreso, we strongly believe that the reforms will go a long way in enhancing good governance and processes that are flexible to the peculiarities of Nigeria’s oil and gas industry.

‘Africa Has GDP of $3.4 tr,1bn Population’

Business Journal

04/03/2019

Equatorial Guinea will host the African Development Bank’s next Annual Meetings in June 2019, following the signing of a memorandum of understanding between the two parties. The Annual Meetings will take place from 11th to 14th June, 2019 in the country’s capital city, Malabo.

The theme of the African Development Bank’s Annual Meetings this year is ‘Regional integration’ – one of the Bank’s five strategic priorities, known as the High 5s: Light up and power Africa, Feed Africa, Industrialise Africa, Integrate Africa and Improve the quality of life of the people of Africa.
With 1 billion people, Africa has a combined GDP of more than $3.4 trillion. Such a market could create huge opportunities for producers on the continent. But to make it a reality, African governments and regional economic communities should intensify efforts aimed at facilitating the free movement of goods, services, people and trade across borders.
“The Government and people of Equatorial Guinea are ready and look forward to hosting the African Development Bank’s flagship event in 2019,” said Mr. Bernardo Abaga Ndong, general coordinator of the National Technical Committee in charge of the Annual Meetings.
“We are determined to make the Annual Meetings in our country a most resounding success that will definitely bolster our national prestige, because an event with over 3,000 participants is not a small affair,” Ndong emphasised. An aide-memoire on the country’s preparedness to host the event was signed on 27^th February 2019. The signing took place on the sidelines of regional consultative meetings between the Bank and its African shareholders, held in Abidjan from 25^th February to 1^st March, 2019, and attended by Equatorial Guinea’s finance minister Lucas Abaga Nchama.
Speaking at the signing, André Basse, the African Development Bank’s Chief of protocol, who signed on behalf of the Bank, commended the host country for its commitment to the success of the Annual Meetings, returning this year to African soil after being held in Korea and India respectively.
The Bank’s Annual Meetings represent a unique opportunity to discuss challenges and ways to advance the continent’s regional integration agenda.
Some 3,000 participants are expected in Malabo, including finance ministers, governors of central banks, policy makers, civil society groups, heads of international organisations and business leaders from the Bank Group’s member states.

Buying Interest Buoys Positive Performance… ASI Up 1.0%

Business Journal

04/03/2019

The domestic bourse kick-started trading activities for the week on a positive note as gains in GUARANTY (+4.8%), ZENITH (+2.3%) and INTBREW (+8.0%) bolstered the All Share Index (ASI), up 95bps to settle at 32,129.94 points.

As a result, market capitalisation increased by N112.9bn to N12.0tn while YTD performance improved to 2.2%. However, activity level weakened as volume and value traded dipped 33.0% and 30.3% to 227.8m units and N2.6bn respectively.

The most traded stocks by volume were DIAMOND (33.0m units), UBA (31.1m units) and ZENITH (28.9m units) while the top traded stocks by value were ZENITH (N703.1m), DANGCEM (N510.8m) and GUARANTY(N391.0m).

Mixed Sector Performance
Across sectors, performance was mixed albeit positively skewed, as 3 of 5 stocks under our coverage closed in the green. The Banking index was up 2.7% on the back of buying interests in GUARANTY (+4.8%) and ZENITH (+2.3%).

Similarly, the Consumer and Industrial Goods indices posted moderate gains, advancing 0.4% and 0.3% respectively based on price upticks in INTBREW (+8.0%), DANGFLOUR (+5.1%),DANGCEM (+0.2%) and WAPCO (+0.8%).

On the flip side, the Insurance index closed in the red, declining 0.2%, dragged by losses in NEM (-2.4%) while the Oil and Gas index closed flat.

Investor Sentiment Strengthens
Investor sentiment as measured by market breadth (advance/decline ratio) improved today to 2.5x as 25 stocks advanced against the 10 stocks that declined.

The top outperforming stocks were CUTIX (+9.8%), NPFMCRFB (+9.7%) and WEMA (+9.1%) while PZ (-9.6%), LIVESTOCK (-9.0%) and LAWUNION (-5.5%) were the least performing stocks for the day.

We believe that the positive performance recorded yesterday will persist into subsequent trading sessions as investors continue to take positions in fundamentally sound stocks.

Economy Post-Election: Afrinvest Lists 7-Point Agenda for Buhari

Business Journal

03/03/2019

Buhari receiving Certificate of Return from INEC

Following the conclusion of the closely contested 2019 elections and the re-emergence of Muhammadu Buhari as President of the Federal Republic of Nigeria, with a fresh 4-year mandate beginning on the 29th of May 2019, it is pertinent to reiterate critical issues previously highlighted in our 2018 Banking Sector Report titled “An Economic Agenda for A New Government.”

These issues were also emphasised in our Economic and Financial Market Outlook 2019 titled “On the Precipice!”
In our view, President Buhari’s victory presents him a new opportunity to choose between setting the country on the path to prosperity or sustaining poor policy choices with economic consequences of a bleaker growth prospects.

Nigeria’s fiscal vulnerabilities as well as her economic structural faults continue to worsen poverty levels (estimated at 91.3m people according to Brookings Institution), unemployment and economic growth, which require the government to take very decisively tough decisions. But, given the socialist leaning of the current government, would Nigerians have to wait till 2023?
Post-Presidential elections, we are still unshaken in our conviction that for economic growth to return to the pre-2014 oil price crash average of 7.6% (2000-2014), strategic reforms must take place in 7 key areas, if the economy and markets will show strong positive momentum over the next four years. We further highlight these critical areas below:

Oil & Gas Sector Reform
Power Sector Reform
Boosting Competitiveness in Trade and Investment
Transportation & Infrastructure Development
Human Capital Development
Security
Boosting Agriculture Productivity

Overall, considering an aging agriculture and mostly rural labour force, high rural to urban migration and the predisposition of youths to modern services, commercial agriculture offers the best chance at restoring food security.

The cost of inaction cannot be overstated as we herald the start of new administration. The risk factors remain on the horizon and remain poised to break the bonds of this tenuous seal. The country remains vulnerable to oil price shocks as buffers remain weak.

While crude oil production levels are expected to increase, latent security risks in the Niger-delta region, amid volatile oil prices could pressure government finances. Crude oil receipts pressure would most definitely filter into FX liquidity risk, which would exert immense pressure on the economy.

The issues are rife and seemingly insurmountable, if political expediency remains the first criteria for decision making.

Zenith Bank Earnings FY 2018: Lower Income, Improved Efficiency

Business Journal

28/02/2019

Peter Amangbo Group MD/CEO Zenith Bank Plc

Lower Income but Improved Efficiency
Zenith Bank Plc recently released its FY: 2018 result with largely impressive earnings reported. Against the backdrop of the cloudy macro-environment, in which risk asset creation was expected to be weak, the bank recorded appreciable declines in interest and non-interest incomes by 7.3% and 31.6% Y-o-Y respectively.

Notwithstanding this, the bank recorded a strong growth in PAT which expanded by 11.3% Y-o-Y, as costs declined precipitously. We are encouraged by the bank’s performance and view this improved efficiency as a sustainable bedrock to build strong future performances.

Given this assessment and considering current market conditions we revise our rating on the stock from “HOLD” to “ACCUMULATE and have a 12-month TP of N30.52 on the counter.

Financial Performance Review
The bank recorded a significant decline in gross earnings of 15.4% Y-o-Y, driven by declines in both funded and non-funded income. The decline in interest income was primarily driven by reduced income from loans and advances (-13.2% Y-o-Y), although there was also a moderate decline in income from investment securities (-0.1%).

The decline in income from loans and advances may be related to the substantial decline of 13.2% Y-o-Y in total risk assets which settled at N1.8tn. The bank’s management noted that prepayments early in the year were responsible and given the risky environment, it is not surprising that the bank didn’t build its risk asset portfolio back up during 2018.

Interestingly, non-funded income also declined significantly by 31.6% Y-o-Y due to much reduced derivative income (trading gains), which had propped up the bank’s gross earnings in the previous year. In FY: 2018, the derivative book closed in the red at -N16.8bn relative to N68.7bn in FY: 2017.

As earlier indicated, given the weaker income generation, the bank’s performance became hinged on efficiency. Firstly, interest expenses declined by 33.3% Y-o-Y, as the bank’s stock of low-cost deposits increased, with interest paid on time deposits declining the most by 61.1%.

Also, cost of risk declined precipitously to 0.9% (FY: 2017: 4.3%), as loan loss expenses moderated by 81.3% Y-o-Y. Meanwhile OPEX fell by 1.0% Y-o-Y even as AMCON cost increased given the new directive to include off-balance sheet exposures in levy calculation.
Consequent on the significant improvement in cost efficiency, the bank’s cost-to-income ratio settled at 49.3% from 52.8% in the prior year. This set the stage for the significant growth in PBT and PAT of 16.2% and 11.3% Y-o-Y to N231.7bn and N193.4bn respectively. Following this, ROE and ROA expanded to 23.7% and 3.2% from 21.4% and 3.1% respectively.

Asset Quality
The bank’s non-performing loans ratio increased to 5.0% from 4.7%, even with the decline in gross loans, which is indicative of increasingly risky environment. We expect a moderation in NPL by FY: 2019, in line with management’s guidance of 4.9%. Also, given the expectation of moderate growth in loans and advances, cost of risk should remain restrained. We forecast CoR to settle at 1.0% for FY: 2019.

Liability and Funding Mix
As earlier noted, the bank’s CASA (current and savings accounts) – low cost deposits – increased during the year, settling at 87.5% from 83.3% in the preceding year as the bank drove its retail strategy. This is quite impressive and was the major driver of the bank’s impressive earnings performance.

We do not see significantly better headroom for growth here as the funding of long-term assets will need more stable funding base.

Liquidity and Capital Adequacy
The bank recorded strong capital adequacy (25.0%) and liquidity (72.0%) ratios at FY: 2018. There was a moderation in the bank’s CAR from 27.0% in the preceding year, adduced to initial IFRS9 adjustment for the new ECL model for impairment recognition.

There is expected to be a moderation in CAR as the bank expands its loan book. On the other hand, liquidity ratio increased from 69.7% in the preceding year. In line with the expectation of relatively increased risk asset creation, we expect a moderation of LR in FY: 2019.

Valuation and Outlook
We are encouraged by the bank’s much improved efficiency, which we forecast will be a platform for strong future financial performances.

Hence, we expect the bank’s position in investment securities will be extended, which should support interest income growth, given the relatively attractive yield environment.

Afrinvest Research

Fintech Platform TeamApt Closes $5.5m Series A Round

Business Journal

28/02/2019

TeamApt Product

TeamApt, a Nigerian fintech company that provides digital solutions and payment infrastructure for Africa, has closed on a $5.5million Series A round, led by Quantum Capital Partners.

The Lagos-based company is a leader in the development of Digital Banking, Digital Business solutions and running Payment Infrastructure for Africa.

Yesterday’s announcement will see the company scale more aggressively into additional markets, whilst deploying investment into further product development, talent acquisition and expansion of its internal operations.

Working with 26 African banks, and 100% of all commercial banks in Nigeria, including Zenith, ALAT, UBA and Diamond Bank, TeamApt builds white-labeled products, to ensure digital financial transactions are easier, faster, cheaper and safe.

Since its launch in 2015, TeamApt has focused on its mission to create financial happiness for Africans through technology, and so far has on-boarded 100,000 Nigerian businesses, serving 3M customers across Africa’s largest economy and is currently processing monthly transactions of $160 million. The company has recorded revenue growth of 4,500% over a three year period.

With a team of 40+ developers, TeamApt is an engineer-led company that was built to solve inefficiencies in Nigeria’s growing digital financial services market, at scale, using automation and has deployed over 55 tailored solutions to banks. The company’s flagship product is Moneytor an end-to-end omni-channel digital banking solution for financial institutions to fast track digital transformation processes with web and mobile interfaces.

Tosin Eniolorunda, Founder and CEO of TeamApt said “Banking on the continent is changing at a rate never seen before by Africa’s financial institutions. Innovation and technology are no longer nice-to-haves, but must-haves, as both businesses and customers demand convenient, quick, and easy services from their banks. Every financial provider is under pressure to provide seamless and cost-effective digital solutions. Our engineers are building platforms that promote simplicity in how banks and businesses are run – and we continue to forge ahead building products that are becoming part of the very fabric of Africa’s banking infrastructure.

“We are now several steps further to building a symbiotic and frictionless digital banking ecosystem connecting not only Nigeria but Africa and creating technology for financial happiness for Africans”.

According to the Central Bank of Nigeria (CBN), the total value of electronic e-payment transactions recorded in 2017 rose by 32.5 percent to N83.1 trillion (approximately $229 billion) in 2017 from N62.7 trillion (approximately $176 billion) recorded in 2016, demonstrating the immense potential available in the market.

The company is also set to launch its first consumer-facing product, which is currently in beta. Aptpay is a payment infrastructure product that will centralize all services currently used on banking mobile apps. This will allow for self-reconciliation for customers, unlike via current transfer gateways which require reconciliation, providing a one-stop system from which all banking transactions [bill payments, transfers, direct debits and more] – are powered through a single platform. The platform will also be tailored towards curbing financial fraud.

According to Elaine Delaney, Co-Founder of Quantum Capital Partners, “Quantum Capital Partners was an early adopter of Fintech and Instech solutions within its portfolio of financial services investments. We sought to partner with TeamApt to leverage the significant opportunities within the African financial services landscape to optimize financial inclusion across the continent. TeamApt’s ability to continuously innovate with a strong focus on customer delivery driven by an impressive management team were the key elements that supported our investment thesis.”

Bearish Run Sustained on Large Sell-Offs… ASI Down 1.6%

Business Journal

28/02/2019

The local bourse continued its bearish run as the All Share Index (ASI) declined 1.6% to close at 31,721.76 points dragged by sell offs in GUARANTY (-6.9%), NESTLE (-2.0%) and ZENITH (-4.0%).

Consequently, the market capitalisation reduced to N11.8tn as investors lost N194.8bn while YTD gain dipped to 0.9%.

However, activity level was mixed as volume traded decreased slightly by 9.7% to 411.7m units while the total value traded surged 96.6% to N5.3bn. GUARANTY (44.6m units), ACCESS (29.7m units) and UBN (27.6m units) were the top traded stock by volume while the top traded value were GUARANTY (N1.6bn), NESTLE (N946.7m) and DANGCEM (N634.7m).

Industrial Goods Index Emerges Lone Gainer
Performance across sectors was largely bearish as all indices save for the Industrial Goods index closed in the red. The Industrial Goods index inched higher, up 0.9% due to bargain hunting in DANGCEM (+1.5%) following its impressive FY: 2018 results.

The Banking index led laggards, down 4.6% based on sell-offs in GUARANTY (-6.9%) and ZENITH (-4.0%). In the same vein, the Consumer Goods index dipped 2.0% as NESTLE (-2.0%) and NIGERIAN BREWERIES (-4.5%) posted another consecutive day of losses.

Similarly, the Oil & Gas and Insurance indices declined 1.6% and 1.0% respectively due to price depreciation in OANDO (-9.7%), REGALINS (-7.4%) and AIICO (-5.2%).

Investor Sentiment Remains Weak
Investor sentiment as measured by the market breadth (advance/decline ratio) stood at 0.3x as 9 stocks advanced against 30 decliners. LIVESTOCK (+7.9%), UNIONDAC (+7.1%) and UAC-PROP (+4.9%) were the top performers while OANDO (-9.9%), FCMB (-9.8%) and DANGFLOUR (-8.8%) were the worst performers.

In our view, the current bearish sentiment in the market are based on sell-offs triggered by foreign portfolio investors. We however note that these pressures present buying opportunities in fundamentally sound stocks; nonetheless, we expect a bearish close tomorrow as investor sentiment remains weak.

MTN, Eseye Partner to Deliver Globally Connected IoT Cloud Solution

Business Journal

28/02/2019

Eseye, a global provider of IoT services has announced a partnership with MTN, the leading Africa Mobile Network Operator (MNO). MTN have joined forces with Eseye and the AnyNet Federation, a new association of MNOs established specifically to meet the complex management and enhanced resilience requirements of the rapidly expanding global M2M IoT customer base.

Global Growth for Cellular onto AWS
The AnyNet Federation will initially focus on delivering significant global growth of cellular services onto Amazon Web Services (AWS) Cloud. It aims to make the complex global landscape for IoT easier for AWS customers, by delivering a single cellular M2M solution that can be deployed seamlessly across major world markets.
Nick Earle Eseye Chairman & CEO said: ‘This is a ground-breaking global collaboration. The AnyNet Secure is already the most feature rich and integrated connectivity solution for AWS, and the AnyNet Federation as a key way of delivering simplified connectivity on a global scale, whilst allowing customers buy and manage their connectivity from within AWS.”
MTN Group Enterprise Executive, Oliver Fortuin said: “MTN is delighted to bring their networks across 12 markets to the support the objectives of the AnyNet Federation. We believe that through collaboration we can speed up the deployment of our customers’ global IoT and enhance their global business opportunities”

A Global Data Clearing House
Using Eseye’s next generation, fully eUICC compliant AnyNet Secure for AWS SIM card, AnyNet Federation member customers will experience “out of the box” connectivity that integrates onto AWS IoT Core and is globally scalable.

Cellular traffic destined for AWS is passed between different
AnyNet Federation partners based on the geographic location of IoT devices that are automatically provisioned and certified over-the-air. Regardless of which AnyNet Federation partner is delivering the data, the customer is billed through their account by AWS, and the MNO is paid for the services it delivers.

IoT Market Trends
The launch of the AnyNet Federation and its initial AWS market focus comes as Gartner forecast, the Worldwide Public Cloud Services Market will grow by 17.3% in 2019 to total $206.2B, up from $175.8B in 2018; and Statista state that 80% of enterprises are both running apps on or experimenting with AWS as their preferred cloud platform.

GE Healthcare, NSIA Partner to Fight Cancer in Nigeria

Business Journal

28/02/2019

GE Healthcare has partnered with the Nigeria Sovereign Investment Authority (NSIA) to supply latest technology in computed tomography (CT), Discovery RT, to Lagos University Teaching Hospital for its modern NSIA- LUTH Cancer Center, commissioned by President Muhammadu Buhari.
The Discovery RT, a simulation CT machine, is the first of such technology to be installed in the country. It enables physicians to study the body in detail allowing them to determine the exact location, shape, and size of the tumor to be treated.

As part of the partnership, GE Healthcare will also provide servicing of the equipment and deliver hands-on training for the hospital’s radiology staff on the new technology.
Nigeria currently has eight public and one private comprehensive cancer care centers to serve its growing population of over 180 million people. Many of the public cancer centers have radiotherapy machines that are outdated, making access to radiation therapy more difficult for cancer patients.

The new Radiotherapy Centre will increase access to quality services for the patients across Lagos state. This will help early detection and treatment of cancer, which improves chances of it being cured.
“For many years, GE Healthcare has developed tools that help improve the care of patients through advanced technologies that facilitate the diagnosis as well as help the fight against diseases such as cancer. We are happy to collaborate with NSIA in this landmark achievement for Nigeria in progressing the availability of world-class radiotherapy for cancer patients in the region. This will help improve the overall results in the fight against cancer, as well as in improving the quality of life”, said Eyong Ebai, General Manager for West Central and French Sub-Sahara Africa at GE Healthcare.
The World Health Organisation (WHO) projects that by 2030, between 10 and 11 million cancers will be diagnosed in low and middle-income countries.

ALSF Trains African Lawyers on Negotiating Economic Deals

Business Journal

28/02/2019

The African Legal Support Facility has completed a two-day workshop for African lawyers and government negotiators, aimed at strengthening their capacity to negotiate complex deals involving investments in key economic sectors.
The workshop, co-organised with the African Business Law Firms Association (ABFLA) under the African Legal Support Facility Academy, was held in Accra, Ghana, from 14-15 February, 2019. Forty government negotiators and 30 lawyers in private practice representing public and private organizations across Africa attended the workshop.
In his opening remarks, Stephen Karangizi, Director and Chief Executive Officer of the African Legal Support Facility said the topics covered were “carefully chosen to fill identified knowledge gaps between lawyers’ academic training and legal practice.”
Participants benefited from a wide array of rich legal contributions and content on the techniques needed to successfully negotiate sustainable and equitable investment agreements for projects in the energy, mining, oil and gas sectors.

The negotiation and legal intricacies of infrastructure projects and public-private partnerships were also covered. Participants and government officials attending the workshop commended the initiative, stating that the skills acquired were relevant and vital for the effective and efficient discharge of their professional duties and official responsibilities.
Karangizi observed that the academy’s curriculum was co-developed by the African Legal Support Facility, national and regional bar associations, including the Southern African Development Community Lawyers Association (SADCLA), the East African Law Society (EALS) and the International Training Centre in Africa for Francophone Lawyers (CIFAF) based in Cotonou, Benin.

The academy’s capacity building initiative is also accessible virtually via a portal with learning tools and documentation sourced from the ALSF library.
The Accra workshop was also an opportunity for the ALSF to call on Regional Member Countries to contribute to the financial resources of the ALSF – all in a bid to strengthen its capacity to support African countries with their creditor litigation and negotiations for complex commercial transactions.
Similar ALSF Academy sessions were held in Kigali, Rwanda, and Cotonou, Benin, in October and November 2018.

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