Connect with us

Business

Mutual Benefits: Earnings shrink

Published

on

Just like most insurance firms, Mutual Benefits Assurance Plc slipped into loss position in 2016. Chris Ugwu writes

 

 

Basically, a stable economy promotes the savings necessary to finance investments, which is a requirement for achieving a viable insurance industry that can help sustain economic growth.

Status of insurance in Nigeria
This is because insurance companies are sensitive to economic fundamentals and sometimes have to factor a lot of economic variables so as to make the right investment decisions.
However, some of these economic indices which include foreign exchange reserves, government debt, government deficits, inflation, interest and exchange rates have all suffered in recent years as a result of volatility in the economy.
Due to the stagnant growth of insurance industry, which has remained a key challenge in the country, the realities are that insurance firms will continue to struggle to find their feet as one of the major financial service sectors in Nigeria.
According to experts, what this means is that for the insurance industry to thrive and attain its potential, the government must be sincere in promoting a favourable environment that will allow the financial service industries thrive. This will help to increase the operational efficiency of the insurance industry.
Mutual Benefit Assurance Plc is one of the underwriting firms that has got fair share from the dislocation of the economy and the insurance sub-sector. The company is among the insurance firms that have remained at par value in share price due to dwindling fortunes in financials following investors’ low sentiments.
The group, which ended the financial year 2015 in the negative note as the year saw a drop of 76 per cent in profit after tax degenerated to loss position in 2016 financial year.
The underwriter also featured among companies that missed regulatory filling of their results to the Exchange as at when due in 2016.
Following the volatility in the economy, Mutual Benefit’s share price on the Nigerian Stock Exchange like most of its peers in the industry has remained stagnate at nominal value of 50 kobo year to date following negative sentiments that have enveloped the demand of most insurance stocks.

Financials
Mutual Benefits Assurance Plc ended the year 2015 on the downswing with a pre-tax profit of N1.195 billion for the financial year ended December 31, 2015.
The pre-tax profit accounted for a drop of 81 per cent over N4.980 billion recorded during the same period of 2014.
Profit after stood at N812.048 million in 2015 as against N4.980 billion reported a year earlier, representing a decline of 76 per cent.
The statement of financial position as at the period showed that gross premium written dropped to N14.598 billion in 2015 as against N15.451 billion recorded a year earlier, indicating a drop of 6 per cent.
There also seems to be no respite for the investors of the underwritten firm began the 2016 financial year with 18.35 per cent decline in profit after tax for the first quarter ended March 2016.

Financials
The group’s profit after tax during the first quarter stood at N320.508 million as against N392.529 million in 2015, accounting for a drop of 18.35 per cent.
Its profit before tax was down by 28.75 per cent, from N577.698 million in 2015 to N411.632 million during the period under review.
However, the group’s gross premium written grew by 21.96 per cent to N3.171 billion in Q1 2016 from N2.600 billion in 2015.
Mutual Benefit continued with the downward trend as it reported a profit after tax of N387.630 million for the half year ended June 30, 2016.
The PAT represents a drop of 85 per cent over N2.661 billion recorded during the same period of 2015.
Profit before tax stood at N493.865 million in 2016 as against N2.747 billion reported a year earlier, accounting for a decline of 82.02 per cent.
According to a notice from the NSE, the statement of financial position as at the period under review showed gross premium written also dropped to N6.373 billion in 2016 as against N10.087 billion recorded a year earlier, indicating a drop of 36.82 per cent.
Mutual Benefits recorded a loss after tax of N465.792 million for the third quarter ended September 30, 2016 as against profit after tax of N742.410 million in 2015.
Loss before tax stood at N310.656 million in 2016 as against pretax profit of N1.006 billion reported the previous year.
Gross premium written also fell to N9.812 billion in 2016 as against N12.096 billion recorded a year earlier, indicating a drop of 18.88 per cent.
The underwritten firm posted a profit after tax of N387.630 million for the half year ended June 30, 2016.
Mutual Benefits ended the financial year in the red as it posted a loss after tax of N1.068 billion for the full year ended December 31, 2016 as against profit after tax of N1.195 billion a year earlier.
Loss before tax stood at N1.346 billion in 2016 as against pretax profit of N812.048 million reported a year earlier.
According to a notice from the NSE, the statement of financial position as at the period under review showed gross premium written dropped to N12.143 billion in 2016 as against N14.598 billion recorded a year earlier, indicating a drop of 17 per cent.

Default in post-listing requirements
Mutual Benefits was among the 15 quoted companies across the sub-sectors that missed regulatory filling of their results to the Exchange as at when due in 2016.
According to reports, other companies that missed regulatory filling of their results to the Exchange for 2016 include Skye Bank Plc, Royal Exchange Plc, Afromedia Plc, Conoil Plc, Austin Laz & Company Plc, Equity Assurance Plc, Fortis Microfinance Bank Plc, Guinea Insurance Plc and Linkage Assurance Plc. Also included are Mutual Benefit Assurance Plc, Premier Paints Plc, Resort Savings & Loans, Sovereign Trust Insurance Plc, Standard Trust Assurance Plc and Standard Alliance Insurance Plc.
Quoted companies on the Exchange are required to file their quarterly and annual accounts within 30 days and 90 days respectively after the end of the quarter and end year respectively in accordance with the listing rules of the NSE.

Looking ahead
Mutual benefits Assurance Plc is strategically focusing on developing innovative customer-centric products, increasing market share and concentration on core insurance business.
Chairman of the company, Mr. Akin Ogunbiyi, who disclosed this to shareholders at the company’s 20th annual general meeting (AGM) in Lagos, said that gradual divestment from non-core insurance businesses allowed the company to grow its businesses, manage profitability in a difficult business environment and advance key strategic initiatives.
He said, “To re-position the Group for further opportunities and challenges, in Q2 of 2016 the board directed an analysis of the company’s strategy and structure, incorporating the best insight from within the Group, KPMG consultants, as well as invaluable contribution from the Board of Directors.
“The result is a new strategic roadmap to be implemented from Q4 2016. The themes of strategic thrust are to deepen market penetration / customer acquisition; embed customer and service delivery excellence; transform people and culture; and drive operational effectiveness.”
He said that the bedrock of this strategic direction is the leverage on disruptive technology – use of electronic decision tools across all businesses, adding broader datasets, and embedding analytics.

Last line
Inadequate awareness on the part of people about the benefits of insurance and the inability of insurers to introduce innovative and market-driven products has remained the major impediments to the growth of insurance business in Nigeria.
However, insurance companies must also find ways to sensitise the populace about the use of insurance. Government also has a role to play in this by making relevant laws that will help make certain insurance policies compulsory and harsh sanctions for non-compliance of same.

 

Continue Reading
Advertisement
Click to comment

Leave a Reply

Business

Okpekpe Road Race Appoints Ecobank Mobile App as Official Bank Service Platform

Published

on

Pamodzi Sports Marketing, organiser of the acclaimed Okpekpe International Road Race, has named Ecobank Mobile App as the official Banking Service platform for the 2018 edition of the race slated for Saturday, May 12 in Okpekpe, Edo State.

Mike Itemuagbor, Chief Executive Officer of Pamodzi Sports Marketing and Chief Promoter of the Okpekpe International Road Race said the Ecobank Mobile App is most suited for the Okpekpe 10km Road Race is an app that has been adopted across Africa.

Mr. Itemuagbor observed that the Ecobank App would adequately cater for the over 5000 local and international professional athletes expected at the competition, in addition to a large number of sports enthusiasts and government officials from across the continent. According to him, “The Okpekpe Road Race is a global competition. It is therefore natural we look for a bank with a service platform that has international appeal. This informed our choice of Ecobank Mobile App”.

“We have a long partnership with Ecobank based on the bank’s African appeal which best suits our dream to become one of the most sought-after long distance races in the world. Our athletes come from all over Africa and they have testified that Ecobank products best suit them, enabling them to access their funds at any point in time, especially during the competition as they do not need to carry cash or source foreign exchange”.

In his comment, Charles Kie, Managing Director, Ecobank Nigeria said the Ecobank Mobile App is a game changer for African banking by using digital technology to combat many of the financial inclusion barriers faced by those on the continent. He said Ecobank’s strategic mission is built around using mobile banking to deliver innovative, efficient and cost-effective services to every African.

“Our app not only removes the barriers that have financially excluded so many Africans but offers next-generation functionality to help them send money, make withdrawals or pay for goods and services. Customers can use the app on their mobile to instantly open Ecobank Xpress Account, which doesn’t have any account fees, paperwork or minimum balance requirements, or to send and receive money across 33 African countries,” he said.

The Ecobank Mobile App which was launched in 2016 currently has over 4 million users registered and has consummated over one billion dollars’ transaction value.

The Okpekpe international 10km road race is organised by Pamodzi Sports Marketing, a leader in sports marketing, sponsorship, hospitality and Rights Acquisition business in Nigeria in conjunction with the Athletics Federation of Nigeria (AFN) and the Edo State Government.

The competition has set the pace for other road races in Nigeria and West Africa. It is the first road race in West Africa to be designated by the IAAF as one of the leading road races around the world since the classification was introduced in 2008. For three years since 2015, the race was organised under the prestigious IAAF Road Race Bronze Label and now it is the first road race to be granted a silver label status in West Africa.

The 2018 edition of the Racewhichholds on May 12th is the 6thedition. It will have over 5,000 runners participating and has also received endorsements from local and international athletes as well as governments.

Continue Reading

Business

Unending trials of collapsed building culprits

Published

on

For about four years now, two major cases bordering on building collapse in Lagos have been in court without a foreseeable end to punish the culprits. DAYO AYEYEMI reports

 

There has been a spike in the number of building collapse in the country with over 20 cases recorded in the last 15 years.
Of more concern is the lack of punishment for those responsible for the collapses until the public outcry that greeted the collapsed guest house of the Synagogue Church Of All Nations (SCOAN) in 2014, where over 100 people including foreigners lost their lives.

This was followed by another four-storey building belonging to Lekki Worldwide Estate Limited, the developers of Lekki Gardens, in 2016 in Lagos. More than 30 people died in the collapse.
Before these two incidents, owners and developers of building collapse have been walking freely as if they were above the law.

The best the nation could do as to checkmate them was to set up and inquiry like the Abimbola Ajayi-led Lagos State Tribunal of Enquiry on Building Collapse in 2012 to unravel causes of structural failures in the state.
The tribunal noted that Lagos State had recorded 135 cases of building collapse in the last seven years.
It also identified gross indiscipline and corruption by all stakeholders as major causes of building collapse.

These, it said, rendered the relevant state laws ineffective.
Other factors responsible for building collapse range from quackery to poor workmanship, use of substandard materials, lack of supervision, poor foundation and structural defect among others.
However, it is interesting to know that four years after the collapse of SCOAN’s guest house building and two years after the Lekki Gardens’ incident, members of the public, especially professionals in the building environment, are worried over the unending court trials of the alleged culprits.

Trials
It would be recalled that the Lagos State Government filed 111 counts against the Registered Trustees of the Synagogue Church of All Nations and four others after a Coroner’s inquest indicted the church and the contractors of the building.

Charged alongside the Trustees of SCOAN are Hardrock Construction and Engineering Company; Jandy Trust Limited; and two engineers, who built the collapsed structure.
Also, the Lagos State government had, in 2016, arrested and arraigned the Managing Director of Lekki Gardens Estate Limited, Richard Nyong, before the Lagos Division of the State High Court over alleged complicity in the events leading to the collapse of a building in Lekki area of the state on March 10, 2016.

Arraigned alongside Nyong before Justice Sybil Nwaka were Lekki Gardens’ Executive Director, Sola Olumofe; the firm’s contractor, Odofin Taiwo; Omolabake Mortunde; Omotilewa Joseph; Lekki Gardens; Get Rich Investment Limited and HC Insight Solution Limited.

The defendants were charged with six-count charges for failure to obtain building approval for the collapsed building and involuntary manslaughter, offences contrary to and punishable under Section 75 (1) of the Urban and Regional Planning and Development Law of Lagos State 2010, and Section 229 of Criminal Law of Lagos State, 2015 respectively.

As at the time of filing this report, New Telegraph gathered that the two matters have been going through hearings and adjournments in the last four years. Up till now, the cases are still pending in courts.
Expressing concern, first Vice President, Nigeria Institute of Building (NIOB) and former President of Building Collapse and Prevention Guild (BCPG), Mr. Kunle Awobodu, noted that the trials were still on-going but expressed worry over the slow procedures of the courts.
Besides, he raised another issue about what has happened to the sites of collapse buildings, pointing out that by the law in Lagos State, government ought to have taken possession.
He said: “Many buildings that collapsed, the Lagos State Urban and Regional Planning Law 2010 says that such land should be confiscated by government. How are we sure that this is being followed? We need to verify if this section of the law is working.”

Government’s reaction
Responding to questions on justices for the high profile cases during the ministerial briefing of the state’s Ministry of Justice last week, Attorney General and Commissioner for Justice, Mr Adeniji Kazeem, said that government would ensure justice in the cases against the founder of Synagogue Church of All Nations, Prophet T.B Joshua and other high profile cases.

On the slow pace of justice over Synagogue building collapse, Kazeem added: “The wheels of justice moves slowly, especially when it is a high profile case. As you know, that case has been on for a couple of years. Only recently, the prosecution closed its case. And usually when the prosecutor closes it case, the defence counsel is expected to open his.

“Rather than do this, the defense counsel filed a no case submission, claiming that the state government has made no case against the clergy. They lost that no case submission. So they have been instructed to open their defense so that the matter can move forward. And I believe that very soon, the case will come to conclusion. “

Stakeholders’ stand
Extremely disturbed by frequent cases of built collapse in Nigeria, building environment professionals have tasked themselves on self-regulation and the need to commence the use of National Building Code (NBC), which stipulates minimum conditions for all stages of building project delivery.
The latest resolution among professionals, comprising engineers, builders, architects, real estate developers, town planners and surveyors, was coming following a storey building that caved in at No 9, Abeje Street, Morikaz Road in Agege Local Government Area of Lagos State penultimate Sunday.
Suggesting the way forward on the platform of Housing Development Group, the Executive Director, Construction Finance, National Assembly Staff Housing , Dr Beni Goka, said that peer reporting, self regulating, whistle blowing, creation of building inspectorate division would go a long way to halt cases of building collapse in the country.
A board member of the Chicago Association of Realtors, United States of America (USA), Mr. Abdulfatai EFTY, noted that Nigeria’s built environment professionals would need to regulate themselves in order to stop the activities of quacks and collapse of building in the sector.

Last line
As people await outcome of the trials, timely intervention of the real estate developers, builders, engineers and other stakeholders would be required to stop building collapse in Nigeria.

Continue Reading

Business

Ajaokuta: Fraud as bane of development

Published

on

The fresh probe by the House of Representatives reaffirms the fraudulent racket in Ajaokuta Steel concession as the long and unending story is costing Nigeria fortunes and a drag on local content development. ADEOLA YUSUF reports

 

The Floating Production Storage and Offloading (FPSO) for $16 billion Egina field is unprecedented in the anals of Nigeria.
Thirty per cent of the biggest oil installation in the country was fabricated in-country.
As for the remaining 70 per cent, investment of undisclosed several billion dollars was repatriated to South Korea to get the equipment fixed, and this was largely due to dearth of functional steel company that could cater for the need of the project.
Like Egina, other FPSOs are being planned and Nigeria is on the verge of being the terrible loser with incessant hurdles for Ajaokuta Steel Complex, the biggest steel hub for the nation, that is struggling to be in the comity of industrialised nations.

The story, the probe
As at the last count, the fresh acquisition racket rocking the Ajaokuta Steel Company Limited, ASCL, has altered $1.2 billion funding for the Turn Around Maintenance (TAM) of the plant.
The prospective lenders for the projection earlier made by Sole Administrator of the company, Sumaila Abdul-Akaba, investigation by New Telegraph at the weekend showed, are standing aback following the petition by a lawyer, Natasha Akpoti.
The lawyer is alleging plot by some individuals in the ex-President Goodluck Jonathan’s administration and the current government of Muhammadu Buhari “to fraudulently acquire the steel company for themselves.”
Although the House of Representatives had set up a committee to probe the new allegation, it was seen, according to checks by this newspaper, as another major hiccups to the success of the ongoing rehabilitation and acquisition of the moribund steel plant.
The plant was designed to produce 1.3 million tonnes of liquid steel per annum in its phase one, with a built-in capacity to expand its production to 2.6 million tonnes of flat iron and steel products in its second phase.
The third phase was planned to produce 5.2 million tonnes of various types of steel products, including heavy plates.
“This is not the first time that acquisition and or concession of the company had hit the rock,” an investor told this newspaper at the weekend after his anonymity was guaranteed.
“Mark my words, as we speak,” he said, “ nothing will come out of this probe,” which he alleged “would end up thwarting efforts to get the backbone of Nigeria’s industrial growth back on the track.
“The Sole Administrator, Sumaila Abdul-Akaba, who revealed that $1.2 billion is required to turn around the moribund steel plant, gave a breakdown of the amount to include $513 million for rehabilitation, completion and commissioning while $687 million will be used for balance of external infrastructure.
“He pointed out that Nigeria could save over $10 billion annually if the steel company was brought on stream, nothing that following the last technical audit of the steel plant in 2010, it was estimated that about $1.2 billion was required to achieve the total rehabilitation, completion and commissioning of the plant. The amount, he said, included balance of external infrastructure.
“But the question is which financer or lender will hear that the company is again in acquisition racket and stick his neck to cough out $1.2 billion?” The source inquired.

History of concession, revocation
The misgivings expressed so far are based on the long history of concession and revocation of the asset.
In June 2003, former President Olusegun Obasanjo conceded Ajaokuta steel to Messrs SOLGAS ENERGY of USA on a 10-year tenure.
In August 2004, the Federal Government terminated the SOLGAS agreement due to non-performance.
In 2004 and 2005, the Obasanjo administration, again, granted another concession to Global Infrastructure Nigeria Limited (GINL), an India, company, for the operation of Ajaokuta steel and the Nigeria Iron Ore Mining Company (NIOMCO) at Itakpe in Kogi state.
However, the Indian company did not live up to Federal Government’s expectation in managing the two companies.
Consequently, the late Umaru Yar’Adua’s administration was compelled to revoke the contract in April 2008 without meeting the requirements of the clauses built into the agreement.
The Indian company, thereafter, took Nigerian government to arbitration court in London, which also crippled the two firms.
In 2016, President Muhammadu Buhari fulfilled his campaign promise on Ajaokuta steel by settling the legal bottleneck surrounding the companies out of court.
However, the Federal Government signed modified concession agreement with GINL to enable the firm retain the National Iron Ore Mining Company, Itakpe.
The modified seven-year concession agreement was signed on August 1, 2016, while the Federal Government took over the Ajaokuta steel.

The committee
Meanwhile, leader of the House of Representatives, Mr. Femi Gbajabiamila, is heading a committee constituted by the House to investigate the controversial steel mill.
The committee, which began sitting last week, was set up to look into the critical issues raised at the debate.
Akpoti, the petitioner, had revealed how a Russian company had to abandon the project in 1994 because Nigeria fell short of its contractual agreement by not releasing funds needed for the completion of the steel plant.
She also claimed that Russian President, Vladimir Putin, wrote the Nigerian government on how to modernise and complete the Ajaokuta complex, but key Nigerian actors have been silent on the offer because of their personal interest in the steel company.
She also recalled how Ajaokuta and Itakpe Iron Ore were concessioned to a private company, Global Infrastructure Holding Limited, which later metamorphosed to Global Infrastructure Nigeria Limited, GINL.
According to her, GINL had at many times contributed to the decay of the steel company, which is why the steel company remains moribund.
Akpoti also explained how Yar’Adua terminated the concession of Ajaokuta and Itakpe steel company to GINL after a committee was set up to probe the concessioning process and the state of Ajaokuta Steel in 2008.
She also claimed there were several indications that the current Minister of Solid Minerals and Steel Development, Kayode Fayemi, and Governor of Kogi State, Yahaya Bello, had interest in the steel company.

Shattered dream
The Ajaokuta Steel Company was envisaged to serve as the bedrock of Nigeria’s industrialisation.
The idea of having a steel industry was conceived in 1958 by the Federal Government.
Preliminary market studies were carried out and studies were initially directed towards the feasibility of establishing rolling mills.
However, because of the growing awareness of the availability of iron ore in Agbaja, Udi and other areas of the country, emphasis later shifted to establishing an integrated steel plant.
The late Tafawa Balewa and Nnamdi Azikiwe, between 1960 and 1966, invited and received proposals from foreign firms, including those from UK, US, Germany and Canada, on the feasibility of establishing steel complexes.
The efforts of government did not yield significant positive result because they were based on the use of iron deposits in Agbaja and Udi, which were later found to be unsuitable for direct reduction.
In 1967, a team of Soviet experts arrived Nigeria to conduct a feasibility study on the establishment of an iron and steel plant, as a follow-up on a technical/economic cooperation agreement between the governments of Nigeria and the USSR.
In their report, they recommended the use of blast furnace process of iron making.
The report also pointed out that the known iron ore deposits in the country were of poor quality and recommended that further geological survey be conducted to see if better ore could be found.
In 1968, Soviet geological experts came to Nigeria and after a general geological investigation reported that there were high prospects for richer iron ore and coal deposits in the country.
However, the Federal Government signed a contract in 1970 with TYAZHPROMEXPORT (TPE), a Russian company, under which they agreed to provide specialised equipment to carry out further geological survey to determine the quantity of the deposits of iron ore, coal resources in the country that could be used for the proposed iron and steel industry.
By 1973, suitable iron ore deposit was discovered in Itakpe, Ajabanoko and Oshokoshoko all in the region around Kabba-Okene-Lokoja – Koton Karfe axis, now in Kogi State.
The TPE was contracted to prepare the preliminary project report for the proposed Iron and Steel Industry in Nigeria.
In 1975, during the reign of Murtala Mohammed, the preliminary project report specifying the raw materials base at Itakpe in Kogi plant site location (Ajaokuta), 1st phase production volume (1.3 mmt), process route (Blast Furnace -Basic Oxygen Furnace), Product form (Long products) submitted by TPE was reviewed, discussed and accepted.
TPE was subsequently commissioned to prepare the Detailed Project Report (DPR) on Ajaokuta which was completed and submitted in 1977.
In 1979, Ajaokuta Steel Company Limited (ASCL)/NIOMCO, Delta Steel Company (DSC), among others, were established under Section 2 of National Steel Council Decree No. 60 of September 19, 1979 and incorporated as Limited Liability Companies.
In 1980, former President Shehu Shagari laid the foundation stone of an integrated steel plant in Ajaokuta on 24,000 hectares of sprawling green-field landmass, built on 800-hectares.
The steel company has four different types of rolling mills inside the plant, such as the Billet Mill which produces billets; the Light Section Mill which produces round, square, strip and angles metals.
The Wire Rod Mill produces wire rods and rebars used in construction companies and production of nails, fencing wire, rope mesh, bolts and nut and netting and the Medium Section and Structural Mill produces parallel flange channels, equal angles, unequal angles and standard channels.
The four rolling mills are bigger than Aladja, Osogbo, Katsina and Jos rolling mills put together while the coke oven and bye products plant is bigger than all the four refineries in Nigeria put together.
In 1980 to 1983, the administration achieved 84 per cent of Ajaokuta steel plant as the Light Section Mill of the plant was commissioned earlier than the scheduled date, while the Wire Rod Mill was also commissioned in April 1984, earlier than the scheduled month of December.
In 1994, equipment erection work at Ajaokuta Steel Plant reached 98 per cent completion.
With all these achievements, it was, however, sad that the gigantic steel plant idea conceived and executed by past leaders had failed to contribute to the development of Nigeria.
The Ajaokuta steel that had reached 98 per cent completion as far back as 1994 had not produced a single steel till date.

Last line
Government should add efforts in resolving the controversy on the concession of ASCL. This will go a long way in solving the riddles on ineffective industrialisation drive for the country.
The House of Representatives should also conduct the probe on time and without fear or favour.
All these will restore confidence in the country’s local content development drive.

Continue Reading

Trending

Take advantage of our impressive online traffic; advertise your brands and products on this site. Call

 

For Advert Placement and Enquiries, Call:

Mobile Phone:+234 803 304 2915

 

Online Editor: Michael Abimboye

Mobile Phone: 0813 699 6757

Email: mmakesense@gmail.com

 

Copyright © 2018 NewTelegraph Newspaper.

%d bloggers like this: