Monthly Highlights: April 2022

•  West African equities were mixed with BRVM and Ghana closing lower whilst Nigeria posted positive returns
•  East African equity performance was broadly positive as Mauritius, Uganda and Rwanda closed in the green while Kenya posted negative returns
•  North African equities closed in the red led by Egypt, Tunisia and Morocco
•  Southern African equities were mixed as Namibia and Botswana underperformed, offsetting positive performance in Malawi, Zambia and Zimbabwe
 

In April, African markets were broadly weaker with ten posting negative results led by Namibia which shed -10.5%, Botswana -5.1%, Ghana -4.5% and BRVM -4.4%, whilst, the major gainers were Zimbabwe’s Industrials +25.0%, Mauritius +8.8%, Zambia +5.8% and Uganda +3.2%. Namibia’s negative returns came as the Namibian dollar depreciated by 8.1% against the USD.

West African equities were mixed with BRVM and Ghana closing lower whilst Nigeria posted positive returns

West African equities were mixed with BRVM and Ghana closing lower whilst Nigeria posted positive returns. In Nigeria, Lafarge Africa Plc posted impressive 1Q22 results (T/O +26.8% y/y, PAT +92.2% y/y) as strong bottom line was driven by -67.9% y/y decrease in finance costs and a decrease in tax rate from 28.5% in 2021 to 18.2% in 2022. MTN Nigeria released impressive 1Q22 results (T/O +22.2% y/y, PAT +31.3% y/y) as top line was driven by a +54.0% y/y growth in data revenue and supported by +46.5% y/y growth in fintech and a +35.3% y/y growth in digital services. Guinness Nigeria reported strong 3Q22 (T/O +18.1% y/y, PAT +199.6% y/y) underpinned by price increases across most of its brands, resilient consumer demand, and a favourable product mix. Bottom line was further boosted by a -66.2% y/y decline in finance costs. Seplat Energy Plc released mixed 1Q22 results (T/O +73.7% y/y, PAT-12.3% y/y) with profitability weighed down by higher income tax (+2105.5% y/y). Guaranty Trust Holding Company released mixed 1Q22 results (G/E +9.1% y/y, PAT -5.1% y/y) as growth in interest income of +15.5% y/y was offset by +70.7% y/y increase in interest expense, while profitability was weighed down by +26.2% y/y increase in depreciation and amortization and +33.2% y/y increase in operating expenses. United Bank for Africa Plc released satisfactory 1Q22 results (G/E +14.1% y/y, PAT +8.8% y/y) as non-funded income grew by +27.1% y/y, while +15.1% y/y growth in interest income was offset by +17.5% y/y increase in interest expense. FCMB Group Plc released strong 1Q22 results (G/E +32.6% y/y, PAT +44.6% y/y) as earnings growth was supported by +39.9% y/y increase in interest and discount income and +62.9% y/y increase in net trading income. Nigerian Breweries Plc posted strong 1Q22 results (T/O +30.4% y/y, PAT +77.7% y/y) as profitability was driven by -51.5% y/y decrease in finance charges. In Ghana, MTN reported impressive 1Q22 results (T/O +34.4% y/y, PAT +53.7% y/y) driven by +16.9% y/y growth in voice revenue, growth of +64.4% in data revenue and +26.7% y/y increase in active MoMo (mobile money) users to 11.7m.

East African equity performance was broadly positive as Mauritius, Uganda and Rwanda closed in the green while Kenya posted negative returns

East African equity performance was broadly positive as Mauritius, Uganda and Rwanda closed in the green while Kenya posted negative returns. In Uganda, MTN released strong 1Q22 results ( T/O +11.0% y/y, PAT +20.1% y/y) driven by +45.0% y/y increase in data revenue and supported by +20.7% y/y increase in fintech revenue. In Tanzania, Tanzania Breweries Limited released FY21 results (T/O +5.6% y/y, PAT +68.0% y/y) with profitability driven by -13.3% y/y decrease in selling and distribution costs, coupled with -47.3% y/y decrease in tax expense. In Kenya, Sameer Africa Plc released mixed FY21 results (T/O -14.0% y/y, PAT +400.0% y/y) as profitability was driven by -68.8% y/y decrease in cost of sales and a -37.4% y/y decline in net finance costs. Nation Media Group posted strong FY21 results (T/O +11.8% y/y, PAT 929.4% y/y) driven by the recovery in print advertising sales, increased revenue from digital products and services and continued growth of broadcasting revenue. BOC Kenya Plc released satisfactory FY21 results (T/O +25.8% y/y, PAT +6.6% y/y) as revenue growth was attributed to +33.9% increase in medical gas revenue driven by increase in demand due to the Covid-19 pandemic while profitability was impacted by higher import costs for medical oxygen. Bamburi Cement posted strong FY21 results (T/O +18.6% y/y, PAT +22.2% y/y) driven by volume growth in retail and the key accounts segments while profitability was further driven by -30.9% y/y decrease in net finance costs.

North African equities closed in the red led by Egypt, Tunisia and Morocco

North African equities closed in the red led by Egypt, Tunisia and Morocco. In Egypt, Commercial International Bank released strong 1Q22 results (G/E +19.7% y/y, PAT +48.2% y/y) on higher net interest income (+18.3% y/y) and a +34.8% y/y increase in net fees and commissions income. United Electronics Company released 1Q22 results (T/O +3.5% y/y, PAT +20.0% y/y) with bottom line driven primarily by operating margin expansion on the growing contribution of Extra’s high-margin consumer finance subsidiary. ObourLand for Food Industries posted improved 1Q22 results (T/O +39.2% y/y, PAT +62.2% y/y) with net revenue driven primarily by +42.3% y/y growth in its core white cheese segment. Cairo for Investment and Real Estate Development posted improved 2Q22 results (T/O +32.2% y/y, PAT +56.6% y/y) with revenue growth driven by +10.0% y/y increase total enrolment of the group’s students coupled with a +10.0% y/y rise in blended tuition fee per student while profitability was driven by -12% y/y decrease in SG&A expenses.

Southern African equities were mixed as Namibia and Botswana underperformed, offsetting positive performance in Malawi, Zambia and Zimbabwe

Southern African equities were mixed as Namibia and Botswana underperformed, offsetting positive performance in Malawi, Zambia and Zimbabwe. In Zimbabwe, Innscor Africa issued trading update for 3Q22 reporting that bakery division volumes grew +23.0% y/y, National foods volumes grew +11.0% y/y, the Colcom division volumes grew +16.0% y/y, Associated Meat Packers volumes grew +16.0% y/y, Natpak volumes grew +24.0% y/y, Prodairy volumes grew +34.0% y/y, Probottlers volumes grew +27.0% y/y and Profeeds volumes grew +16.0% y/y. Axia issued 3Q22 trading update that showing that TV sales volumes were up +24.0% y/y attributable to the increase in trading days in the current year compared to 2021 where major restrictions to social and economic activity were in effect, following the advent of the Covid-19 pandemic. Lafarge reported mixed FY21 results (T/O +95.7% y/y, Loss 470.4m) as operating expenses increased by +180.7% y/y and income tax was +172.2% y/y higher.