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THE brief from Nigerian Enamelware PLC for the year to April 2012 was released to the market before the fiscal year closed and it was significant for one thing: The company continues to guarantee shareholders relatively little but sure returns on their investment.

According to the figures, dividend payable rose by 25.8 per cent to N77.6m compared to year 2011's N61.7m. The distributable profit for the year did not increase that fast though. It increased by 11.6 per cent to N138m as against N123.7m in the previous year.

IT is difficult to predict whether Wema Bank ended 2012 financial year with regional pains that held down expectations and bore holes in the bottom line. Surely, though, from the look of things nine months into the year, a recovery was not in the cards for Wema Bank at the stock market this year. It may be one exception to the overall expectations for the banking sector this year.

According to the figures released  before fiscal 2012 drew to a close, blows on the bottom line came from massive drop in investment income; higher than gross earnings growth in operating expenses and net interest income that did not grew because interest expense out performed interest income in terms of growth.

By September 2012, from the figures, Wema Bank recorded N1783m loss by the end of the first nine months of the year compared to a profit before tax of N1408m at the same time in 2011 financial year. By implication, there was a whopping 226.6 per cent slide into the loss league within the period and certainly, there was no way developments in the last three months of the year could have closed this gap for a joyous finish.

Nine months into the year, the bank's gross earnings was N19834m; that is 14.1 per cent up in spite of its decision to opt for regional banking. This was propelled principally by a very impressive 105.2 per cent rise in interest income to N16437m from N8012m although it has to be acknowledged that its customers must have felt the pinch. This interest income jump occurred despite only 17 per cent rise in Loans and advances to N78476m from N67100m a year earlier.

However,  this leap in interest income did not help the bank's bottom line much because its cost of funds as indicated by interest expense equally more than doubled to N9335m from N4511 (representing 106.9 per cent increase). Then a 63.7 per cent drop in investment income from N9369m to N3397m applied more pressure to eventually land the bank in the loss league once again at a time when most banks were reporting final emergence from under the water.

As if this was not enough, the bank's operating expenses rose by 19.9 per cent to N12832m from N10705m thus implying that the overhead cost of generating the average N100 income was higher  and looked set to still edge higher by December.

IN the case of Forte Oil PLC, shareholders concern when finally final year figures for 2012 surface soon enough, will be how it all ended in spite of the rash of drops nine months into the year.

According to the figures for the nine months to September 2012, only a few items ended the period with increases, it was minus all the way.

The few exceptions were finance income which grew by 33.7 per cent and net assets which ended the period 19.3 per cent up at N8385m. There were, of course, increases too in loans and borrowings (11.4 per cent up to N3426m) and overdraft which closed the nine months at N10570m, 65.8 per cent higher.

SOON, it will be harvest season once again at the Nigerian Stock exchange. That is the period most of the quoted companies file in briefs on their audited report for the year because the majority have December as their year end.

One of the companies one can bank on to send in figures to schedule is of course, Dangote Cement PLC. In its case however, discerning stakeholders may be more concerned with studying how the company ended the year as far as cash juggling is concerned because three months into the year, it was apparently preoccupied with the unique act.

SOMETIMES, the cost of putting smiles on the faces of shareholders is so high, one wonders why some companies still decided to go ahead with it each year they report high enough distributable profit. It is indeed costly to pay dividend to shareholders while appetite for investible funds is high but it is even a higher price to plan to borrow short to put the same smiles on shareholders faces.

Take the case of Nigerian Enamelware PLC by full year to April 30, 2012. The figures for the year were released late in 2012 and it was obvious that in spite of being very short of cash, the company is planning to increase dividend payable by 25.8 per cent from N61.7m in 2011 financial year to N77.6m. Agreed, the company reduced its overdraft by 36.4 per cent to N157.2m from N247.3m, but closing cash was less than one million (N0.935m) as against N9.07m by the close of 2011 year. This means that the company will definitely have to borrow to pay the scheduled dividend unless new cash flows in fast enough.

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