Mrs. Ayodele Jaiyesimi, Head, Human Capital Management and Development, First Bank

The First Bank of Nigeria has emerged the winner of the 2013 Human Resource Best Practice Award of the Chartered Institute of personnel Management of Nigeria (CIPMN). The award instituted about two years ago by CIPM is aimed at rewarding excellence in human resource management and promoting best practices in human resource management in firms and organisations.

The award was presented at the 45th Annual Conference of CIPM holding at the International Conference Centre, Abuja. This is the second time Mrs. Ayodele Jaiyesimi, the Head, Human Capital Management and Development, First Bank would be receiving the award on behalf of the bank. The ongoing 45th annual conference of CIPM has the theme " Evolve and Excel" and is aimed at providing the platform for Human Resource Practitioners to understand the dynamics of the profession, adapt and achieve personal and organisational excellence.  

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Managing Director and Chief Executive Officer of Guinness Nigeria Plc, Mr. Seni Adetu

The Managing Director and Chief Executive Officer of Guinness Nigeria Plc, Mr. Seni Adetu, has expressed his confidence in the nation’s economy, noting that it holds bright prospects for investors and other stakeholders.

Speaking at the Annual General Meeting of the National Institute of Marketing of Nigeria, NIMN, in Lagos, the Guinness boss said that  the the fundamentals of the nation’s economy looks bright with over 60 percent of her population belonging to the age bracket of 20s.

He noted that the world is witnessing a changing lifestyle, with consumers becoming increasingly choosy and brand-led. This he, noted, creates a big challenge for the marketing group since this has made it imperative for them to be innovative to be able to meet the changing tastes of the consumers.

‘Marketers must be ready for a whole lot of challenges; consumers’ lifestyles are changing. Regulatory framework is getting more intrusive, but a marketer should know how to behave in this changing world, since marketing is critical to growth. He must be ready to think out of the box,’ he stated.

The Guinness boss also advised marketers  on the need  to have a deep knowledge of  consumers’ wants  and  the imperative of  adopting new strategies and innovation to enable them make a success of their career.

He argued that one of the ways marketers would be able to unleash the power of marketing is by constantly investing in their growth. This, he added, would enhance their movement to the top of the organisation’s leader.

‘Gone are the days when marketing professionals were finding it difficult getting their ways to the chief executive seats. Today, the numbers of marketing professionals, who are chief executives, are growing. In Diageo, the parent company of Guinness, 80 percent of its chief executives come from the marketing community,’ he stated.

This, he however added, would not be achievable if marketing professionals failed to invest in their growth and position themselves for such opportunities.
- The Vanguard

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DHL has said that the United Kingdom and United States  accounts for about 37 per cent of its export from the country and Nigeria is the second largest market in Sub-Saharan Africa.

Speaking at a briefing, Managing Director, DHL Express Sub-Saharan Africa, Mr. Charles Brewer, noted that Nigeria is closely behind South Africa and the sub-Saharan region is currently the fastest developing one globally.

Great Britain has 21 per cent of the export of DHL products from the country, United States 16 per cent, South Africa 5% and  Canada 5%.

For the inbound products, United States 28 per cent, Great Britain 21 per cent, Germany 7%, France 6% and Italy 7%.

The products that DHL moves include documents 43 per cent, non-documents 12 per cent – mainly oil tools, aircraft spares and samples; import express 12 per cent – mainly IT equipments, machinery and spare parts; other products – 33 per cent. Brewer stated that Nigeria is seen as strategic business hub for DHL in Africa and the small and medium enterprise (SME) is the engine for growth for Nigeria.

He also affirmed that the take-off point for Africa and its vast potentials lies in the big opportunities in the SMEs and DHL is ready to assist and empower the SMEs in the country.

According to him: ”Nigeria is an attractive market for us and, with a population of over 160 million and a GDP growth rate of 7% presents a major opportunity. The opportunity is for us is to expand our footprint within the country and service semi-urban and rural areas so that anyone – from a student to a small business – can access our network.

“And the over 220 countries and destinations that we serve. There are hundreds of SMEs in Nigeria and we need to provide easy access and a team of highly trained Certified International Specialists to lead them to the very obvious opportunities that trading with the world can present.

“Despite the current global economic uncertainty, DHL expects the African region to deliver. As we see the continent ‘surge’ as a result of sector investment, increased consumer spending and economic activity, the future is still bright for the continent. DHL is committed to becoming their provider of choice and as part of that journey we will provide even more access points across Nigeria.

Apart from the expansion of its retail footprint, Brewer’s other priority is around people development and employee engagement are the key to sustainable development.
- The Vanguard

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Minister of Transport, Senator Idris Umar

The Federal Executive Council on Wednesday approved the procurement of one water weed clearing multi-purpose equipment for N278.1bn.

The cost includes payable taxes, $1.3bn and additional N73.6bn.

The Minister of Transport, Senator Idris Umar, who stated this while briefing State House Correspondents after the FEC meeting, said the procurement was aimed at improving safety on the inland waterways.

He added that the equipment would aid navigation and boost economic activities in the various riverside communities across the country.

The minister said it would also rid the waterways of hyacinth and other aquatic weeds.

“The project will increase economic activities within the coastal areas and prevent boat mishaps. The project will create job opportunities for 15 skilled and nine unskilled Nigerians during the period of its execution,” he said.

Umar added that the council also approved the establishment of the Command Control Communication and Intelligence Centre for Sea Ports at the Nigerian Ports Authority.

He said FEC approved the project at the cost of N2.3bn with a completion period of 14 months.

Umar said the project would help in providing a secure environment for ports operations within the Nigerian territorial waters and in curtailing the threat of terrorist activities at the ports.

The project, according to him, will also create 145 job opportunities, including 33 for professionals and 77 for non-professionals during its execution as well as 35 more job opportunities as it progressed.
- The Punch

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The United States Trade and Development Agency (USTDA) has offered grant to Main One, to support a feasibility study on the extension of a fibre optic network from Lagos to Port Harcourt, Rivers State.
The grant will enable Main One to evaluate the technical and financial feasibility of extending 300 miles of undersea fibre optic cabling and supporting infrastructure between two of the country’s most important commercial centres.
Speaking at the signing ceremony of the initiative, USTDA Regional Director for sub-Saharan Africa, Paul Marin, said the project is important as it will help promote the drive for internet pentration in the country.
“This project is an important example of Main One’s commitment to bring high-speed broadband access to Africa. We are proud to be supporting Main One in their efforts to provide the infrastructure for broad-based economic growth in Nigeria,” he said. Marin was represented by the United States of America (USA) Consul General, Jeffrey Hawkins on the occasion.
Chief Executive Officer of Main One, Funke Opeke, said the grant will deepen the provision of broadband services in the Niger Delta region and boost the economy of the region. “We are appreciative to the USTDA for this important grant aimed at furthering the development of broadband services and economic development in the oil-producing Niger Delta region,” she said.
The grant was signed by Hawkins on behalf of USTDA and Opeke for Main One, at the residence of the Hawkins.
- The Nation

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Aliko Dangote, CEO, Dangote Group of Companies

When Shell Petroleum Development Company’s (SPDC) executive director, Malcolm Brinded said recently that building a refinery in Nigeria did not make good business sense, he apparently had not reckoned with Aliko Dangote.

Africa’s richest man, Dangote has a history of being a disrupter of most industries he chooses to play in, like cement, sugar, and flour, and his foray into the oil sector with plans for a new 400,000-barrel-a-day (b/d) refinery has the prospect of shaking up Nigeria’s stagnant oil and gas industry.

The immediate area where Dangote’s refinery investment may push the government into reforming is in the elimination of fuel subsidy, say analysts.

“We are encouraged by recent plans announced by Aliko Dangote to build a new local refinery with a 400kb/d capacity, which should improve pricing terms for local producers,” said Renaissance Capital oil and gas analyst Lldar Davletshin.

“If a local refinery buys crude at world price it will then have to sell refined product with a mark-up, which would mean much higher domestic prices if no subsidy is provided,” Davletshin said.

Nigeria’s gross domestic product (GDP) grew steadily at about 7 percent per annum over the past 10 years with a population of 167 million.

Analysts say the country’s energy thirst is rapidly increasing (from the currently extremely low 300kb/d level), which should make the current fuel subsidy regime unsustainable in about three years, just as Dangote’s new refinery is coming on stream.

Refining “is an excellent business to get into,” Dangote said in an interview in May, suggesting it will be in a position to make a profit, by selling at international rates to fuel marketers.

The refinery would also shake up the entrenched international oil companies (IOCs) in Nigeria, as well as the notoriously opaque national oil company – NNPC, which has the poorest transparency record out of 44 national and international energy companies, according to Transparency International and Revenue Watch Institute.

The NNPC gets an allocation of 445,000bpd of crude oil to refine locally, but it has been selling itself this oil at cut-down prices, a practice that cost Nigeria $5 billion in potential revenue between 2002 – 2011, according to a 146-page report by Nuhu Ribadu, former head of the anti-corruption agency, EFCC.

Dangote’s new refinery would immediately double Nigeria’s refining capacity and reduce dependence on NNPC decrepit refineries as well as cut imports from refiners owned by the IOCs by up to 50 percent.

Its expected 100 percent capacity utilisation may convince the government and prove to sceptics of the need to privatise Nigeria’s four state-owned refineries.

Dangote’s new refinery, fertiliser and petrochemical complex would cost $9 billion. This compares with the NNPC $4.5 billion deal with an unknown ‘Vulcan Group,’ to build six modular refineries with a combined capacity of 180,000b/d, signed since early 2012, which has remained largely on the drawing board.

Nigeria, which is Africa’s top producer of crude oil, relies on fuel imports to meet more than 70 percent of its needs. Four government-owned refineries with a combined capacity of 445,000b/d are operating at a fraction of that because of corruption and poor maintenance.

Nigeria spent over N1 trillion ($8bn) on fuel subsidy payments last year, equivalent to 20 percent of the total federal budget, according to finance ministry data.

“Removing the fuel subsidy would be a major step forward in the reform process in Nigeria,” Samir Gadio, an emerging markets strategist, at Standard Bank, London, said, saying “clearly, this inefficiency is a major constraint on the country’s economic emergence which will eventually have to be addressed.”

President Goodluck Jonathan attempted to remove the subsidy in January 2012, but was forced by a wave of strikes and protests to partially reinstate it, at a reduced price of N97 per barrel. Another attempt by the government at deregulation would only come after the elections in 2015, according to FBN Capital.

The oil and gas industry accounts for 70 percent of the Federal Government budget and 90 percent of the nation’s dollar earnings. The Petroleum Industry Bill aimed at reforming the industry is currently stuck in the National Assembly, although Dangote’s move to establish a refinery may have already set in motion a reform of the industry.
- BusinessDay

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Shell officials on Monday began talks in Port Harcourt with representatives of the Bodo community on compensation and cleanup, five years after one of the worst oil spills in the country’s history, the Associated Press reported.

Some experts say two oil spills that started in 2008 led to the largest loss of a mangrove habitat ever caused by an oil spill, affecting about 30,000 people in the Niger Delta area since then, according to a London-based law firm, Leigh Day.

“These people, since 2008, are living on a creek of oil. You step out of the front door, you see oil, breathe in oil and toxic fumes,” said a lawyer, Daniel Leader of Leigh Day, representing about 15,000 people from the community that filed a lawsuit in 2012.

Although Royal Dutch Shell has admitted responsibility for the two spills, the impact has been disputed and will be the main focus of negotiations in Port Harcourt.

Royal Dutch Shell said a joint investigation team estimated that 4,100 barrels were lost in the two spills. That estimate is based on the initial investigations by representatives from the company and the local community, spokesman, Jonathan French, told the Associated Press.

“Having said all that, it doesn’t matter how much was spilled because the compensation will be based on the financial loss that people have suffered because of the spill in the lagoon, and that is a matter of dispute between us and the claimant,” he said.

Leigh Day said that 15,000 fishermen and 31,000 inhabitants of 35 villages were affected in and around the Bodo lagoon and its associated waterways.

The law firm said independent experts estimated between 500,000 and 600,000 barrels were spilled, devastating the environment that sits amid 90 square kilometres (35 square miles) of mangroves, swamps and channels.

“The majority of its inhabitants are subsistence fishermen and farmers. Until the two 2008 spills, Bodo was a relatively prosperous town based on fishing,” the firm said in a statement.

The spills had destroyed the fishing industry and environment there, it said.

“Those communities are still having water shipped into them. But it’s patchy, and we fear many of those communities are drinking from poisoned wells,” Leader said.

But Shell said such estimates were high.

French said the company did not have access to the area to clean it up and that not all oil spilled was a result of the company’s operations.

Shell blames most of the spills in the region on militant attacks or thieves tapping into pipelines to steal crude oil, which ends up on the black market.

Nigeria, one of the top crude oil suppliers to the United States, requires companies to promptly clean up oil spills but the policy is not enforced, according to the report.

Both parties have said they hope to reach an agreement by the end of the week.

Neither side would discuss possible settlement figures. Britain’s Guardian newspaper reported that the company was thought to be offering about $20m in compensation, while the villagers were seeking $200m.
- The Punch

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Stephen Elop, CEO, Nokia Corporation 

Nokia was once the world’s dominant handset manufacture.
Two years after hitching its fate to Microsoft’s Windows Phone software, Nokia collapsed into the arms of the U.S. software giant, agreeing to sell its main handset business for 5.44 billion euros (N11.6 trillion).
Nokia, which will continue as a maker of networking equipment and holder of patents, was once the world’s dominant handset manufacturer but was long since overtaken by Apple and Samsung .
Nokia’s Canadian boss Stephen Elop who ran Microsoft’s business software division before jumping to Nokia in 2010, will now return to the U.S. firm as head of its mobile devices business.
He is being discussed as a possible replacement for Microsoft’s retiring CEO, Steve Ballmer, who is trying to remake the U.S. firm into a gadget and services company like Apple before he departs.
In three years under Mr. Elop, Nokia saw its market share collapse and its share price shrivel as investors bet heavily that his strategy would fail.
In 2011, after writing a memo that said Nokia was falling behind and lacked the in-house technology to catch up, Mr. Elop made the controversial decision to use his former firm Microsoft’s Windows Phone for smartphones, rather than Nokia’s own software or Google’s ubiquitous Android operating system.
Nokia, which had a 40 per cent share of the handset market in 2007, now has a mere 15 per cent market share, with an even smaller three per cent share in smartphones.
The sale of the handset business is not the first dramatic turn in the 148-year history of a company which has sold everything from television sets to rubber boots. But it was felt as a hard blow in its native Finland, even among hard-nosed investors who saw the sale as a final chance to salvage value.
“I have mixed feelings, because I’m a Finn. As a Finnish person, I cannot like this deal. It ends one chapter in this Nokia story,” said Juha Varis, Danske Capital’s senior portfolio manager whose fund owns Nokia shares.
“On the other hand, it was maybe the last opportunity to sell it.”
Mr. Varis was one of many investors critical of Mr. Elop’s decision to bet Nokia’s future in smartphones on Microsoft’s Windows phone software, which was praised by tech reviewers, but never caught on with consumers.
“So this is the outcome: the whole business for five billion euros. That’s peanuts compared to its history,” he said.
Finns lamented the decline of their former champion.
Finland’s minister for European Affairs and Foreign Trade, Alexander Stubb, said on his Twitter account, “For a lot of us Finns, including myself, Nokia phones are part of what we grew up with. Many first reactions to the deal will be emotional.”
It is also a pivotal moment for Microsoft, which still has huge revenues from its Windows computer operating system, Office suite of business software and the X-Box game console, but never managed to set up a profitable mobile device business.
Microsoft’s own mobile gadget, the Surface tablet, has sold tepidly since it was launched last year.
“It’s a bold step into the future — a win-win for employees, shareholders and consumers of both companies,”Mr. Ballmer said in a statement.
“Bringing these great teams together will accelerate Microsoft’s share and profits in phones and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services.”
The move leaves the Finnish company with Nokia Solutions and Networks, which competes with the likes of Ericsson and Huawei in telecoms equipment, as well as a navigation business and a broad portfolio of patents.
(Reuters/NAN)

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Aliko Dangote

A major milestone towards the construction of Nigeria’s first private and Africa’s largest petroleum refinery will be reached on September 4, with the signing of a term loan between Dangote Group and a consortium of local and foreign banks for the financing of the project.

Dangote Group is committing an equity of $3.5 billion to the massive project, BusinessDay has learnt. In what could be the single largest contribution to the Nigerian government’s economic transformation agenda, Dangote Group plans to invest $9 billion to build the largest refinery/petrochemical/fertiliser complex in Africa at the Olokola Liquefied Natural Gas (OKLNG) Free Trade Zone.

According to a company official, “we are not resting on our oars as we seek to make possible what could be the single largest contribution to this government’s economic transformation agenda, with our investment of $9 billion in the largest refinery/petrochemical/fertiliser complex in Africa.”

Dangote plans to raise additional $2.25 billion from the DFIs and ECAs to augment its equity contribution of $3.50 billion. The Group reported that due to the vastly improved investor friendly environment in Nigeria, there was a tremendous response by reputable international finance organisations to participate in this syndication.

Dangote Group has in the last five years increased 10-fold to a market capitalisation of $22 billion and today accounts for over 30 percent of the total market capitalisation of the Nigerian Stock Exchange.

The Group said that its massive expansion in the last five years has coincided with the tenure of this administration and have been due mainly to the formulation and implementation of progressive policies of this government, like the cement backward integration policy that has seen Nigeria achieve self-sufficiency in cement production.

A company spokesman said, the “administration has helped create and maintain the enabling environment that has encouraged it to invest over $6 billion in the Nigeria cement manufacturing industry in the last seven years.”

Aliko Dangote, Africa’s richest man, recently unveiled the Group’s plan to invest up to $8 billion to build a Nigerian oil refinery with a capacity of around 400,000 barrels a day and it could come on stream by 2016.

Dangote Group has chosen to walk a path where others have been unable to thread, and analysts said last night they expect the refinery to help cut Nigeria’s oil import volumes significantly while also helping to deal a blow on the opaqueness around the subsidy management system. Nigeria’s installed refined capacity today stands at 415,000 barrels per day, but the government-owned refineries in Port Harcourt, Warri and Kaduna operate at around 30 percent of capacity.
- BusinessDay

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(Reuters) - Hewlett-Packard Co shuffled its top ranks on Wednesday, reassigning a star executive to a new role identifying potential acquisitions, as the world's largest personal computer maker reported a larger-than-expected slide in revenue and forecast zero sales growth next year.

Its shares dropped 5 percent in after-hours trading.

The Silicon Valley stalwart, which has been undergoing a radical reshaping under Chief Executive Meg Whitman for the past two years, is looking for ways to escape the decline in PC sales as tablets and smartphones revolutionize computing.

Whitman, who said in May that fiscal 2014 revenue growth was still possible, told analysts on a Wednesday conference call that growth next year was now "unlikely" given the poor performance of the Enterprise Group and PC divisions.

"My read was that fiscal 2014 growth was a stretch goal rather than a baseline assumption," said Shebly Seyrafi, an analyst at FBN Securities. "That has become more challenging."

To meet that challenge, Whitman made a key personnel move on Wednesday, replacing Dave Donatelli with Bill Veghte at the helm of HP's second-largest business division, the Enterprise Group.

Donatelli, a rising star that Wall Street analysts once considered a candidate for a tech CEO position, relinquishes his post as chief of the unit, which sells server, storage and software services to large organizations. He will now focus on identifying early-stage technologies for investment, the company said.

The executive engineered some of the company's most significant acquisitions in past years, including of 3Com and 3PAR, which helped catapult HP deeper into the networking and storage markets, respectively.

Whitman told analysts on the conference call the computing giant was "back in the market" for strategic acquisitions, which she saw as essential to a continued transformation.

Veghte takes over immediately as head of the division, and will not be replaced as HP's chief operating officer. Veghte joined HP in 2010 after a 20-year career at Microsoft Corp, which culminated in his heading the business side of the Windows unit. He also worked on developing and marketing Microsoft's server software.

REVENUE SLIDES

CEO Whitman, who took the reins at HP in September 2011, is trying to revive the company after years of board turmoil and a backdrop of rapidly declining global PC sales, but has not yet halted revenue declines.

Donatelli is the latest executive with a strategic role to have been replaced. In June, HP moved PC division chief Todd Bradley into a new job aimed at improving its China business and distribution relationships around the world, a move many analysts deemed a demotion.

The Enterprise Group is HP's largest business unit after personal computers, and is a critical component of Whitman's efforts to boost margins and profitability, while trying to minimize revenue declines.

The division, which recorded a 9 percent decline in sales in the latest quarter, accounts for about a quarter of the company's overall sales.

In all, the company recorded revenue of $27.2 billion in the fiscal third quarter, down from $29.7 billion a year earlier, as PC sales continued to slide amid a shift toward mobile computing, and its enterprise business grappled with tepid worldwide information technology spending.

It missed the $27.3 billion in sales that Wall Street had expected, on average.

Overall net income in the quarter came to $1.39 billion or 71 cents a share, compared with an $8.9 billion loss a year earlier when the company swallowed a big writedown of the IT outsourcing business it inherited when it bought Electronic Data Systems for close to $14 billion in 2008.

Excluding one-time items, the company earned 86 cents a share, matching the 86 cents average forecast by analysts on Thomson Reuters I/B/E/S.

Shares in the company slid more than 5 percent to $24.07 in after hours trade, from a close of $25.38 on the New York Stock Exchange.

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Conoil plc has posted an unprecedented performance for the first half of the year 2013. According to a statement issued by the company, the oil marketing giant recorded 255 percent increase in profit after tax from N450.9 million in 2012 to N1.6 billion in 2013. The performance demonstrated the company’s resilience to overcome the overwhelming challenges in the downstream oil sector.

The company also declared a whopping N1.98 billion as profit before tax against N663.1 million recorded in the corresponding half-year period in 2012. Revenue rose to N79.6 billion from N76.2 billion, while Earnings per Share (EPS) increased significantly from 65 kobo to 230 kobo.

The company attributed this sterling performance to the adoption of robust growth strategies, efficient management of resources and total elimination of waste in its operations, assuring its shareholders of its optimism to sustain and grow the impressive performance in the remaining six months of the year. It also assured juicier returns for shareholders at the end of the current financial year.

Revealing its edge, the company said it strengthened and repositioned its core businesses, with huge investments in retail network expansion, which involved building multi-million naira mega stations across the country.

In the statement issued to announce the result, the company emphasised: “For us, the downstream remains fundamentally attractive now, in the medium and long term. With our clarity of direction and focus, our company’s long-term success is assured.”

It added: “We will sustain our improved performance and realise our aspiration to become the leading petroleum products marketer and one of the most profitable quoted companies. We will continue to benchmark our company against best global standards and practices to ensure that the business is managed in the best interest of all stake holders.”
- BusinessDay

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MasterCard Incorporated, the second-biggest United States payment network, is working with the Federal Government to issue 13 million debits cards in Nigeria, which will also act as identity cards, the President, International Markets, MasterCard, Ms. Ann Cairns, has said.

The company has distributed 10 million South African debit cards that replace cash for social grant recipients, thus boosting its market share across the Africa’s fastest-growing economy.

She spoke in an interview in Pretoria, South Africa, saying the company was also expanding in Angola and Mozambique and working with local partners such as Kenya’s Equity Bank Limited for growth, a Bloomberg report said on Wednesday.

MasterCard is counting on the expansion in Africa and the rising levels of wealth to distribute its financial products to more than 200 million people that have no access to banking services, according to McKinsey & Co Mobile operator, South Africa’s MTN Group Limited.

MTN and banks such as Togo’s Ecobank Transnational Incorporated were also trying to reach the Africa’s poorest by offering easier access to bank accounts and the ability to transfer money without going into a branch, the report said.

“We think financial inclusion can be brought by different instruments,” Cairns said.

MasterCard will be able to realise the “big promise of Africa” if it can grow its payment systems, MasterCard’s President of Middle East and Africa, Michael Miebach, said in the same interview, according to the report.

Meanwhile, Access Bank Plc on Wednesday said its half-year pre-tax profit fell by 14 per cent to N26.1bn.

The figure represents a 14 per cent fall from the same period a year ago, according to the bank.

Gross earnings also declined by five per cent to N104.1bn during the six months to June 30, according to the top-tier bank’s filing at the Nigeria Stock Exchange.
- The Punch

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Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke

Nigerians were once again the losers, as six international oil companies — Royal Dutch Shell, ConocoPhilips, Chevron, Total, Eni and ExxonMobil — paid their shareholders a dividend of $38.76 billion (N6.201 trillion) in 2013.
The dividends were for the 2012 financial year, which was approved by their respective shareholders a couple of weeks ago.
The dividends declared by the six oil majors represent about 52.93 per cent of the Nigerian Stock Exchange’s, NSE, market capitalization of N11.714 trillion.
The market capitalization of the NSE is the total market value of all the companies listed on the stock exchange.
Last year, Nigerians also missed out from the over $30.82 billion or N4.87 trillion cumulative dividends declared by five IOCs in their home countries, following their refusal to list their shares on the NSE.
The five oil majors operating in Nigeria – Shell, Chevron, ConocoPhilips, Statoil, and Eni, had declared a cumulative dividend of $30.82 billion for the 2011 financial year.
Dividends declared in 2012 are as follows:
•Shell – $7.4 billion (N1.184 trillion);
•ConocoPhillips – $3.278 billion (N524.48 billion);
•Chevron — $6.8 billion (N1.088 trillion);
•Total — $6.8 billion (N1.088 trillion);
•Eni — $4.38 billion (N700.8 billion) and
•ExxonMobil – $10.1 billion (N1.616 trillion)

Shell Nigeria operations
Despite excluding Nigerians from the dividends, Shell, in its financial statement, warned that an erosion of the business and operating environment in Nigeria would adversely impact its operations.
The company claimed it faced various risks in its Nigerian operations, ranging from security issues surrounding the safety of its people, host communities, and operations; its ability to enforce existing contractual rights; limited infrastructure; and potential legislation that could increase its taxes or costs of operation.
“The Nigerian government is contemplating new legislation to govern the petroleum industry which, if passed into law, would likely have a significant adverse impact on Shell’s existing and future activities in that country,” it said.
Giving a breakdown of its operations in Nigeria, Shell said it produced approximately 365,000 barrels of oil equivalent per day in 2012 compared to 385,000 in 2011, while its 30 per cent interest in the Gbaran-Ubie integrated oil and gas project in Bayelsa State, yielded 0.9 billion Standard Cubic Feet per day (scf/d ) of gas.
The company said it sold its 30 per cent stake in Oil Mining Leases, OMLs, 30, 34 and 40, for a consideration of $1.1 billion (N176 billion).
Contiuing, it said, “To provide funding, Modified Carry Agreements are in place for certain key projects and a bridge loan was drawn down by the Nigerian National Petroleum Company (NNPC) in 2010. The Modified Carry Agreements are being reimbursed, and in December 2012 NNPC repaid the bridge loan with interest. New financing agreements with NNPC are under discussion and are expected to be put in place during 2013.”
ConocoPhillips activities
ConocoPhilips, on the other hand, said its operations in Nigeria were adversely impacted in the second half of 2012 by flooding in the Niger Delta, resulting in its full year production falling to 40 million barrels of oil equivalent.
The company further stated that on December 20, 2012, it entered into agreements with affiliates of Oando Plc to sell its Nigerian business unit for a total of $1.79 billion (N286.4 billion) plus customary adjustments.
“The transaction is anticipated to close by mid-2013, following appropriate consultations with stakeholders. We received a deposit of $435 million (N69.6 billion) in December 2012, which is included in the ‘Other accruals’ line on our consolidated balance sheet and in the ‘Other’ line of cash flows from investing activities on our consolidated statement of cash flows.
“The deposit is only refundable in the event of default by us. As of December 31, 2012, the net carrying value of our Nigerian assets was $323 million (N51.68 billion),” ConocoPhilips said.
ExxonMobil contributes to local development
On its part, ExxonMobil said,“Contributing to the economic development of local communities is an important part of our business. This strategic objective is embedded into our project plans.
“In 2012, for example, ExxonMobil celebrated the completion of the first offshore structures to be designed, procured, and constructed in Nigeria. The event represented years of dedication and collaboration between joint venture partners Mobil Producing Nigeria and Nigeria National Petroleum Corporation.
“The project supports ExxonMobil’s goal to build and maintain a reliable and globally competitive supply chain wherever we operate.”
- Vanguard

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Cisco Systems Inc. (CSCO), the biggest maker of networking equipment, said it’s cutting about 5 percent of its workforce after issuing a fiscal first-quarter sales forecast that missed most analysts’ estimates.

Cisco is eliminating 4,000 jobs as weaker sales in Japan, China and Europe weigh on revenue growth, Chief Executive Officer, John Chambers said on a conference call Thursday. Revenue for the current quarter through October will be $12.2 billion to $12.5 billion, the San Jose, California-based company said in a statement. Analysts on average were projecting sales of $12.5 billion for the current period, Bloomberg reports.

Chambers is grappling with concerns that Cisco’s growth rate may slow as companies and network operators postpone costly overhauls of their networks. The results suggest the CEO is struggling to deliver on his turnaround plan for the company, said Bill Kreher, an analyst at Edward Jones & Co. in St. Louis, Missouri.

“The guidance is below the long-term plan, which can be concerning,” said Kreher, who has a hold rating on Cisco shares. “Cisco has eliminated low-hanging fruit and has effectively managed their costs, but looking forward, the company must continually find ways to generate new sources of revenue.”

Cisco fell as much as 11 percent in extended trading. The shares advanced less than 1 percent to $26.38 the close in New York, leaving them up 34 percent this year.

Global Impact

While Cisco is benefiting from growing use of Web video and mobile devices that strain data networks and require the purchase of more routers, switches and servers, that hasn’t been enough to make up for weaker sales outside the U.S. Slower world economic growth impacts Cisco because the company gets 42 percent of its sales outside the U.S. and Canada, according to data compiled by Bloomberg.

“I’m real pleased with our momentum in the market — it’s just not growing as fast as we need,” Chambers said on the call.

Profit excluding some items was 52 cents a share in the fiscal fourth quarter, while revenue rose 6 percent to $12.4 billion. Analysts on average had projected profit of 51 cents and sales of $12.4 billion, according to data compiled by Bloomberg.

With the new cuts, Cisco will have eliminated 12,300 jobs over the past two years as it has exited consumer businesses while expanding on corporate software and technology services, including cuts of 500 jobs announced in March.

Net income rose 18 percent to $2.27 billion, or 42 cents a share, from $1.92 billion, or 36 cents, a year earlier.

Competitive Pressure

“If there’s something wrong somewhere in Cisco, given how well things have been going, investors would expect Cisco to make up the difference somewhere else,” said Jayson Noland, an analyst at Robert W. Baird & Co. in San Francisco who has an outperform rating on the stock, the equivalent of a buy.

Cisco is also facing increased competition from companies including Palo Alto Networks Inc. (PANW), Arista Networks Inc. and Huawei Technologies Co. in its core routing and switching markets, as well as security.

Margins are also narrowing. Gross profit margin in the just-ended fiscal year was 60.6 percent, down from 70.1 percent a decade ago.

Another reason for weaker profit growth and margins is Cisco’s entry into the computer-server business, where prices and margins are lower. It’s also expanding into markets such as computer security, where Cisco faces specialized competitors with advanced technologies. In July Cisco agreed to buy Sourcefire Inc., a maker of anti-hacking technology used by the U.S. government, for $2.7 billion.

Sourcefire competes with companies such as Palo Alto Networks and Fortinet Inc. (FTNT) Over the past three years, Cisco has spent $10.61 billion buying 59 companies, including $5 billion last year on NDS Group Ltd., whose technologies are used to deliver and secure pay-TV content, according to data compiled by Bloomberg.
- BusinessDay

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MTN Group Ltd., Africa’s largest wireless operator, said first-half profit rose 22 percent, exceeding estimates, after subscriber numbers increased in fast-growing markets including Nigeria and Ghana.

Sales advanced 9.8 percent to 65.2 billion rand ($6.5 billion), the Johannesburg-based company said in a statement this week. So-called headline earnings per share, which exclude one-time items, were 6.54 rand for the six months through June, compared with 5.36 rand a year earlier, beating the 6.49 rand median profit estimate by four analysts.

Total subscribers increased 6.5 percent to 201.5 million, supported by 7.8 million net additions in Nigeria and further growth in smaller African markets such as Sudan and Ivory Coast. South African customer numbers declined slightly after weak consumer spending and tough competition hampered the business in Africa’s largest economy. MTN plans to add 21.1 million subscribers in the full year, the company said.

MTN will try to lower its cost base in South Africa in order to compete with aggressive rivals, Chief Financial Officer Brett Goschen told reporters at a press conference. Savings will probably come from a reduction in distribution and procurement costs, while the company is reviewing its headcount, he said.

MTN shares advanced 1.3 percent to 198.50 rand by 1:31 p.m. in Johannesburg on Wednesday. The stock has increased 12 percent this year, compared with a 0.7 percent decline at Vodacom Group Ltd.

South African wireless companies are looking at other African markets as consumers increasingly use more profitable data-enabled smartphones and domestic voice service revenue declines. MTN data subscriber numbers increased by almost 30 percent in the half year, while data traffic grew 56 percent, the company said.

MTN has expressed interest in expanding into Madagascar, according to people familiar with the matter. A move into India is also “worth considering”, Chief Executive Officer Sifiso Dabengwa told reporters.

The company has held talks about a potential tie-up with Reliance Communications Ltd. of India this year, three people familiar with the matter said in May.
- BusinessDay

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