Corporate Results | |
Corporate Results | |
3289 VIEWS | |
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Friday, March 29, 2019 01:32PM / NSE
Initial Reaction –
FBNQuest
Implications
Okomu’s
FY 2018 results came in weaker than expected. FY PBT of N10.3bn came in behind
consensus’ N11.1bn forecast and missed our estimate of N11.2bn by around 6.3%.
The firm proposed a dividend of N3.00 (vs. our N3.20 estimate) which implies a
yield of around 4%. Notwithstanding, we expect a negative reaction by the
market because to our minds the magnitude of the dividend is insufficient to
offset the disappointment of these results.
Positives
Gross
margin expanded by +511bps y/y to 41%. However, it appears that there has been
a reclassification of items between the cogs and opex lines.
Negatives
While
Q4 sales declined -2.8% y/y, PBT and PAT both declined by -18% y/y and -63% y/y
respectively. The topline decline, the third in a row, was primarily driven by
lower rubber sales which fell by around -11% y/y to N879m. Rubber exports are
constrained due to on-going road works to Nigeria’s busiest export terminal in
Apapa, Lagos. Similar to Q3, palm oil sales were relatively flattish during the
quarter which continues to provide some evidence supporting our view that
imported competition is growing. Sequentially, the trend was broadly similar,
driven however by a significant gross margin contraction.
Year-to-date,
the stock has gained +5%, outperforming the broad index by c.7%.
We
rate the stock Outperform. Our estimates are under review.
Okomu Oil’s Q4 2018 results: actual vs. FBNQuest Capital Research
estimates (N millions)
Source: NSE, FBNQuest Capital Research estimates
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Maintained