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Gross premium earned advanced by 37.13% YoY to NGN35.56bn (vs. NGN25.93bn in Q3:2018), driven by the extensive distribution network of the firm. The firm’s life insurance segment was the most significant contributor to premium growth; the business segment was the fastest growing during the period (43.18% YoY) and accounted for 73.32% of total gross premium income. Premium income from the non-life and health businesses also rose by 23.66% and 8.98% respectively. While the growth rate of the nonlife business was higher than its 3 year average growth rate (21.07%), the faster growth recorded in the life business dwarfed the contribution of the nonlife business to topline during the period. Hence, the contribution of the non-life business came in at 25.36%, lower than its 5-year average contribution of 30.58%. The low contribution of the business segment reinforces the need for the firm to strengthen the weak capital base of its nonlife business (with a solvency margin of NGN6.34bn) to improve the performance of the business segment. We expect 11.50% YoY rise in total premium earned by 2019FY, given its stance as one of the dominant life insurers in the industry and its large agent force (over 4,000 retail outlets) and its well-diversified product designs. Kindly find attached the full report.

MAYBAKER reported a decline in its top-line of 9.57% to NGN5.92bn (vs. NGN6.54bn in 9M:2018). The pharmaceutical unit (which contributes c.98% to total revenue) recorded a revenue of NGN5.86bn in 9M:2019, 6.95% lower than in 9M:2018. The decline is attributed to the industry-wide reduction in prices of Over-The-Counter (OTC) products, in light of constrained purchasing power of consumers and intense competition. The beverage unit however, recorded some level of resilience, inching upwards by 9.18%, to print at NGN57mn. In the absence of new products development (or commercialization of NIPRISAN), the decline in revenue is expected to linger in the near term. Against this backdrop, we have revised our 2019FY revenue projection downward to NGN8.17bn, implying a revenue contraction of 4.52%. Kindly find attached the full report.

CONOIL’s topline expansion surged further in Q3:2019; 9M:2019 revenue printed at NGN112.72bn (vs. NGN75.84bn in 9M:2018; +48.64%), driven by a 10.72% uptick in Q3. Q3:2019 revenue of NGN40.53bn (+89.65% Y-o-Y), is the highest recorded so far this year and was highlighted by an impressive 91.98% Y-o-Y growth in white products (PMS, AGO, ATK, LPFO and DPK). Year-to-Date, the segment has contributed 95.30% to topline which is commendable, given the mounting competition to push volumes in a difficult market. CONOIL is clearly leveraging its ubiquitous retail presence in Nigeria (395 dealers concentrated in areas of robust vehicular traffic and commercial activities) and goodwill amongst commercial vehicle operators to edge its peers in terms of sales growth. Lubricant Sales for the first 9 months is also up by 34.72% (NGN5.30bn), albeit suffering a 5.61% Q-o-Q contraction in Q3, to settle at NGN1.79bn (vs. NGN1.90bn in Q2). This is possibly a consequence of other industry operators also ramping up Lube marketing and sales, to improve depressed margins in a worsening cost environment. The LPG segment remains dormant, since management took a strategic decision to shut it down temporarily in 2017 and made a commitment to restart at the earliest possible time. We think it is imperative that the reopening of this segment is expedited, for the company to participate in Nigeria’s budding transition towards LPG (for cooking) and capture further value, given its strong presence and appeal. We now expect topline growth at 26.91% in 2019FY to reach NGN155.10bn. Kindly find attached the full report.

For the third time this year, SEPLAT has missed its production and revenue targets. 9M:2019 topline was down by 12.57% Y-o-Y to NGN151.88bn (9M:2018: NGN173.71bn). Standalone Q3:2019 revenue printed at NGN42.91bn, weaker by 37.74%, compared to NGN68.92bn at this time last year. At the start of the year, SEPLAT had put out guidance of 24kbpd – 27kbpd for oil and 146MMscfd – 164MMscfd for gas, but has only achieved 23,658bpd for oil and condensates (vs. 25,286bpd in H1:2018) and 136MMscfd (vs. 155MMscfd last year) for gas, YtD. The company is facing operational challenges with its efforts to mobilize rigs to the site. On the back of an impending global glut in 2020 and weak demand growth, oil and gas prices have also largely underperformed; during the period, average oil price was down to USD64.22pb (9M2018: USD71.14pb) while gas was also discounted to USD2.80/Mscf (9M2018: USD3.06/Mscf). Consequently, the Crude Oil segment floundered – revenue from the segment is down 26.53% to NGN99.08bn, while gas sales similarly tumbled; down by 16.97% to NGN32.23bn. With NGN20.35bn in gas tolling fees recognized during the period, 9M topline was handed a significant boost, and would otherwise have printed at NGN131.34bn, a Y-o-Y decline of 24.39%. Kindly find attached the full report.

FBNH delivered a 0.36% decline in gross earnings, owing to a 2.99% dip in interest income despite the registered growth in non-interest income (+8.17%). We observed the continuous improvement in asset quality, in line with the bank’s commitment to achieving a single-digit NPL ratio. NPL ratio further improved to 12.60% from 14.50% in H1:2019. Impairment charges also registered a 62.64% decline leaving the cost of risk to settle lower to 1.90%. With the bank’s current gross Loan to Deposit Ratio (LDR) at 54.20%, we remain cautious on its ability to attain the revised LDR minimum of 65% with a deadline of December 2019. However, we expect the bank to increase its credit product offerings as it strives to achieve compliance without sacrificing the asset quality standard already achieved. Kindly find attached the full report.