The Nigerian All Share Index, the broad index measuring the performance of Nigerian stocks, fell below 50,000 index points to close at 49,836.51 points on August 31, 2022.
controls by the Nairametry showed that activity on the Nigerian Stock Exchange, which opened the month at open trading on August 1, 2022 with a market capitalization of N27.162 trillion and 50,370.25 index points, closed the month on August 31, 2022 at N26.880 trillion and 49,836.51 index points, so a month to date making loss of about N282 billion or 1.05%.
Further review showed that the Consumer Goods Index (CGI), which measures the performance of consumer goods companies listed on the floor of the Nigerian Stock Exchange, rose modestly by 4.93% over the month, from 573.27 index points to 600.56 points.
Consumer goods companies offer investors security in times of recession. However, most stocks in the industry that had performed well in the first half of 2022 posted losses as this is a pre-election year typically marked by negative sentiment.
Cadbury Nigeria Plc, Unilever Nigeria Plc, International Breweries Plc, Nigerian Breweries Plc and PZ Cussons Nigeria made the top 5 underperforming companies list, according to data from Nairametrics from the NGX, which focused on the worst-performing consumer stocks in August.
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These stocks have been selected based on their month-to-day price performance and are represented by percentage gain.
PZ Cussons Plc-3.53%
- PZ Cussons Nig Plc’s share price fell 53% over the period from N8.50 per share to N8.20 per share, reducing the market capitalization to a loss of N1,191.14 billion or 3.53% at the close of N32 .557.91 billion at the end of August 2022 from the opening figure of N33.749 billion.
- PZ Cussons Nigeria Plc released its unaudited results for the fourth quarter of 2021/22 for the period ended 31 May 2022 and reported profit of N758.37 million, an increase of 11.71% year-on-year.
- A look at the earnings shows that the company’s profit was driven by a significant increase in the company’s main businesses — sales of home and personal care products and durable electronics.
- These segments generated revenue of N25.50 billion for the period compared to N22.60 billion for the same period last year. Segment revenue growth was 12.85% year-on-year.
- The company’s shares are up 51.6% year-to-date and are currently trading on N25.
Nigerian Breweries Plc – 4.61%
- Nigerian Breweries shares saw a negative run during the month. The capital-heavy brewery in Nigeria fell 4.61% in price in August, from N70 to N45.50. The company experienced selling pressure that drove its market capitalization down to reduce by N18.085 billion and close on March 31. To stand at N374.051 billion by August 1, 2022, from a value of N392.137 billion at the start of trading August 1St.
- Nigerian Breweries Plc reported total N274.03 billion in sales for the first half of the 2022 financial year ended 30th June 2022. The company also reported profit after tax (PAT) of N19.08 billion during the period.
- According to the unaudited report and preliminary results filed with The Nigerian Exchange Limited, the company recorded revenue growth of 31% compared to the N209.22 billion recorded in the corresponding period of 2021.
- The results also showed that profit after tax for the six-month period increased by 142.8% from N7.86 billion to N19.08 billion. Similarly, basic earnings per share for the first half of 2022 were 237 kobo versus 97 kobo recorded in the first half of the prior year.
- According to a statement signed by the company’s secretary/legal director, Uaboi Agbebaku, the company’s improved profit was mainly due to revenue growth resulting from its pricing strategy and better mix.
- Further analysis of the results showed that the cost of sales increased by 18.3% from N131.34 billion in the first half of 2021 to N155.35 billion in 2022 in the corresponding period. Marketing, selling and administration expenses also increased by 44.6% from N58.42 billion in H1 2021 to N84.45 billion in H1 2022, reflecting the increase in commercial activity post COVID, rising diesel prices and higher wages is attributable to collective agreements
- The company’s shares currently trade at N40 but have since lost 3.2% year-to-date.
International Breweries Plc – 6.54%
- The brewery lost 54% of its share price over the month, from N5.35 to N5.00 per share. The company’s share price decline caused its market capitalization to decrease by N9,401.73 billion to a closing price of N134,310.34 billion at the close on August 31, compared to an opening price of N143.712 billion at the start of trading on August 1.
- The company’s half-year earnings showed sales of N111.4 billion, representing strong growth of 36% year-on-year.
- Administrative and marketing expenses, however, grew well above sales by 42% to N28.7 billion and accounted for a good portion of gross profit.
- A 78.8% fall in other expenses to N2.4 billion helped lift operating profit to an operating profit of N5.4 billion for the half year from a loss of N16.4 billion in the same period last year to increase in June 2022.
Unilever Nigeria Plc-14.08%
- Shares in Unilever Nigeria Plc also suffered from the market slide, falling 14.08% over the month from N20 to N12.20. The negative activity caused the market capitalization to decline to lose N11,490.01 billion to close at N70,089.07 billion at the close on August 31, 2022 from the opening value of N81,579.08 billion at the start of trade in August.
- Unilever Nigeria Plc recently released its unaudited interim financial statements for the six months ended 30th June 2020
- According to the unaudited financial statements, the manufacturing company reported profit after tax of N1.906 billion for the half year, up from N714.780 million last year, representing a growth of 167%.
- The profit was enhanced by other income of N66.659 million resulting from income from interim service contracts.
- According to the company, following the sale of its tea business in October 2021, Unilever entered into a transitional services agreement with new owner Unilever Tea MSO Nigeria Limited. The agreement is for a period of 15 months during which Unilever would provide production and sales support to Unilever Tea MSO Nigeria Limited for a fee.
- Revenue increased by 35.12% to N43,806 billion over the period compared to N32,420 billion reported in 2021.
- However, cost of sales increased 22% to N29.605 billion in 2022 versus N24.204 billion.
- The company’s shares currently trade at N35 but have since lost 7.93% year-to-date.
Cadbury Nigeria Plc – 15.58%
- Cadbury Nig Plc’s share price benefited from the market decline falling 15.58% from N40 per share to N13.00 per share over the period resulting in the market capitalization falling to N4,507.71 billion or 15.58% to close lost N24,416.63 billion at the end of August 2022 from the opening figure of N28,924.34 billion on August 1st.
- Cadbury Nigeria Plc, a subsidiary of Mondelēz International, has continued with its current repositioning. The company’s recently released financial highlights for the first half of 2022 (covering the period January 2022 to June 2022) showed that its sales rose to N27.8 billion in the first half of 2022, a 50.5% increase over the 18.5 billion N recorded in 2022 corresponds to same period in 2021.
- Similarly, Cadbury Nigeria’s earnings for the period rose 553.7% from N516 million in H1 2021 to N2.34 billion in H1 2022. The company’s basic earnings per share also remained on an upward trend, rising from 27 .48 kobo by 553.7 percent to 124.68 kobo over the same period.
- In a company statement, Oyeyimika Adeboye, Managing Director, said Cadbury Nigeria is using its resources to remain competitive in a challenging business environment.
- She said: “We operate in a challenging business environment characterized by tight foreign exchange, ongoing Naira depreciation and rising operating costs. We have developed some strategies internally to deal with these challenges. We will continue to create value for our consumers and deliver superior returns to our shareholders.”
- The company’s shares currently trade at N00 and are up 47.7% year-to-date.