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Why NETCO suffered 34% decline in profit

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The Nigerian National Petroleum Corporation (NNPC) at the weekend gave insight into why its subsidiary, National Engineering and Technical Company Limited (NETCO), suffered 34 per cent decline in its profit before tax in 2017 financial year. The profit before tax decreased by 34 per cent in the year under review when compared with N4.90 billion of the previous year, the NNPC said in a statement at the weekend, stressing that the decrease was attributable to the foreign exchange gains, which constituted 56 per cent before tax in 2016 as compared to 4.8 per cent gain in 2017. Aside this, NETCO, NNPC said in the statement issued by its Group General Manager, Group Public Affairs Division, Ndu Ughamadu, recorded a profit before tax of N3.257 billion for 2017 financial year. The breakdown shows that the company’s revenue increased by 122 per cent from N10.13 billion in the previous year to N22.46 billion in the year under review.

NETCO Board Chairman, who is also NNPC Chief Operating Officer, Upstream, Mallam Bello Rabiu, said the operating profit of NETCO increased by 134 per cent, from N0.89 billion in 2016 to N2.07 billion in 2017, the NNPC statement said. Mallam Rabiu, the corporation continued, noted that the impressive result was the outcome of improved performance in project execution and cost reduction measures put in place during the period, in addition to and the new addition of construction and procurement portfolios in the company’s activities basket.

He, however, stated that the profit before tax decreased by 34 per cent in the year under review when compared with N4.90 billion of the previous years, stressing that the decrease was attributable to the foreign exchange gains, which constituted 56 per cent before tax in 2016 as compared to 4.8 per cent gain in 2017. The COO Upstream said the remarkable figures were made possible through sustained efforts on the part of the company to cash in on the strong support of the Group Managing Director of the Corporation, Dr. Maikanti Baru, and the shareholders.

“The strong support of the GMD and that of the shareholders, in addition to award of some big-ticket jobs, which NETCO delivered on time, within budget and without compromising on quality of service delivery, made it possible for the remarkable figures. The performance has reinforced to all stakeholders that given the right environment, NETCO is poised to greater heights.

Mallam Rabiu said for the first time since the establishment of NETCO, the company was declaring the highest dividend in any given year of N750 million to its shareholders at the AGM. Speaking while receiving the cheque for the dividend,Baru commended the management of NETCO for the unprecedented performance. He assured the company of his continued support, stressing that based on its performance, he would ensure NETCO got more projects, especially in the gas sector. He congratulated the outgoing MD of NETCO, Engr. Siky Aliyu, for leaving a legacy behind for his successor and expressed optimism that the company would perform better next year. Earlier, Aliyu said the company set a target to perform 600,000 man-hours of work in 2018, adding that it would continue to explore new opportunities and improve on service delivery to engender more confidence in its clients and stakeholders.

The managing director, who announced his retirement from the corporation with effect from May, 2018, said he was happy to leave behind a company that has the largest information technology facilities in the engineering field with a wide range of choice software for process simulations, plant modeling, structural analysis, stress analysis, designing of control systems engineering, drafting and project management.

NETCO was established in 1989 to acquire engineering technology through direct involvement in all aspects of engineering in the oil and gas and non-oil sectors of the economy. NETCO is Nigeria’s premier indigenous engineering company with the strategic vision of providing basic and detailed engineering, procurement, construction supervision and project management services, using state-of-the-art technology. It recently added construction and procurement to its portfolios in the industry

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Tincan Customs chief to implement 48-hour cargo clearance

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Customs Area Controller (CAC), Tin Can Island Port Command, Musa Baba Abdullahi has reiterated the command’s unshaken commitment to achieve 48hour cargo clearance from the port without compromising revenue collection and national security.

The customs chief said efforts are being put in place to maximise benefits of technology and build the command’s manpower to meet with the growing challenges of modern trade.

 

While addressing maritime journalists in his Apapa office, Musa identified swift dispute resolution as a key component to facilitate trade. He said the command has put in place a faster mechanism to address any area of disagreement in interpretations of guidelines for duty collection and other related matters.

 

He added that a committee put in place for disputes resolution meets as soon as any dispute arises to avoid port users incurring costs caused as a result of delays in resolving such disputes.

 

According to him, there is a quicker process of bringing issues to his attention and contacting the headquarters where necessary to avoid delays associated with such disagreements. He said the command has stepped up efforts at keeping officers and relevant stakeholders abreast with the use of technology for the purpose of customs operations.

 

The Controller disclosed that senior officers and licensed customs agents are being trained at the command’s Information Communication Technology (ICT) Centre on the latest Nigeria Customs Information System (NICIS 2) in batches.

 

Musa said the training and retraining of customs personnel and stakeholders will continue with a view to getting as many persons as possible knowledgeable in the workings of the system.

 

He also stressed the need for all stakeholders to increase their levels of compliance with rules and improve on their knowledge as ways of achieving seamless flow of trade thereby achieving faster clearance of goods from the port.

The Controller also advised the maritime media to uphold the ethics of their profession and be fair and truthful in all they do.

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Early rainfall to boost Nigeria’s cocoa mid-crop

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Nigeria’s mid-crop cocoa output for 2017/18 could rise by 15 per cent from last season, helped by a mix of rainfall and sunshine in the main growing regions which has helped the trees, President of Cocoa Association of Nigeria (CAN) Sayina Riman said in a recent interview with Bloomberg.

 

Drought cut last season’s mid-crop harvest by 40 per cent. The dry weather continued into the main crop of the new season.

 

Riman said the drought affected the trees, reducing output of between 300,000 tonnes and 320,000 tonnes projected at the beginning of the 2017/18 season.

 

He said that early rains in March and April have helped boost the mid-crop, which could see the season’s output close at around 290,000.
Riman farms on a 170 hectare cocoa plantation in Nigeria’s second-biggest region of Cross Rivers.

 

The cocoa season in Nigeria runs from October to September, with an October-to-February main crop and a smaller light or mid-crop that begins in April or May and runs through September.

 

“Despite the drought of last year which affected cocoa we believe we would be close to 290,000 tonnes for 2017/18 season,” Riman told Reuters.

 

The International Cocoa Organisation (ICCO), however, gives much lower estimates of Nigerian cocoa output. It forecast last season’s production at 225,000 tonnes.

 

Riman did not give a reason for the discrepancy. Nigerian government production figures are also significantly higher than ICCO estimates.

 

Nigeria has recently emerged from recession and a currency crisis which caused a chronic dollar shortage, forcing exporters to under-invoice their goods in order to use the foreign exchange black market to get premium for their hard currency.

 

The action caused the West African country slip to the sixth producer of cocoa in the world at the peak of the crisis. Riman said Nigeria was getting back to number four grower as exporters now use the official currency markets.

Riman said Nigeria was working on improving its bean quality especially with renewed demand from Europe.

 

However, bean count, a measure of the number of beans needed to produce 100 grams of cocoa, reached as high as 140 for the main crop.

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Rising Nigerian bonds drags yields down

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Nigeria’s local-currency bonds are on a roll, rising for the last eight days and driving their yields below Turkey’s for the first time in more than two years.

 

The average rate on Nigerian government bonds has fallen around 400 basis since an August-peak to 13 per cent. Yields are now 100 basis points below the Central Bank of Nigeria’s benchmark interest rate of 14 per cent, where its been held since July 2016.

Investors have piled into the naira market thanks to slowing inflation, a stable currency and rising Brent crude prices, which climbed about 25 per cent in the past six months to more than $70 a barrel. In contrast, they’ve turned bearish on Turkey, which has the worst-performing local bonds in emerging markets this year, because of accelerating inflation and loose monetary policy.

 

Central Bank Governor, Godwin Emefiele, may be tempted to commence his long-touted easing cycle and help revive the economy that has faltered since the 2014 oil crash. While that would reduce the attractiveness of naira assets, Nigerian yields are still high relative to other major emerging markets. Aside from Turkey, Argentina and Egypt’s bonds are the only ones to yield more in the Bloomberg Barclays EM Local Currency Index.

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