First quarters are always characterized by the announcement of audited financial results by companies quoted on the Nigerian Exchange Group Plc (NGX Plc). One of the key drivers of an efficient market is the availability of authentic and regular information from quoted companies. It is a post listing requirement that a listed company must submit quarterly and annual financial statements to the Exchange for immediate broadcast to all the dealing members. The immediate announcement is to prevent insider abuse where someone can take advantage of privileged information to purchase or sell stocks.
The Exchange imposes sanctions on any quoted company that disregards the post listing requirements. As part of its investor protection policy, the Securities and Exchange Commission (SEC) announced a new filing system for quoted companies last week. According to SEC, an unaudited fourth-quarter financial statement should be filed within 30 days after the quarter ended and an annual audited financial statement within 90 days after the year ended. An investor whose investment objective is income invests a huge percentage of his money in stocks of companies with a track record of robust dividend payment. This is unlike speculators who invest primarily for capital appreciation. A speculator can buy stocks in the morning and sell in the afternoon.
The Earnings Bait
Analysts note that this is the earnings season on NGX. Audited financial statements of quoted companies across sectors have been pouring in with the announcement of dividends and the date of annual general meetings (AGMs). A leading manufacturer of rigid foams and other household materials, Vitafoam Nigeria PLC, has announced a net profit of N4.38 billion for the year ended September 30, 2021, compared to N3.46 billion in September 2020. The company, whose annual general meeting is scheduled for March 4 2022, has proposed a dividend of N1.50 per ordinary share as against its previous 70 Kobo, an increase of 114 percent over the previous one. Guinness Nigeria PLC, Meyer PLC, Airtel Africa PLC, Nestle Nigeria PLC, MTN Nigeria Communications PLC, and PZ Cussons PLC have also announced results.
Total Energy Marketing Nigeria PLC grew its profit before tax by 759 percent to N24.99 billion; in 2021, its revenue increased to N341.17 billion from N204.72 billion. Conoil posted a profit before tax of N3.79 billion last year, against N2, 15 billion in 2020, while its revenue hit N126.69 billion from N117.47 billion. MRS Oil, Nigeria PLC posted a profit […]