NBC plc - half year result (Very impressive or what??)

[c kenneths]

@ Apache, beer will then be sold in cans, but what will be the cost implications?

Canning machines will be imported to replace these bottling equipment, and a lot of efforts will go into waste disposal control.

If they are forced to use aluminium cans which are more recyclable, cans cannot litter the streets because the demand for used cans will go up.

How else can these expected changes impact on the profitability of these our companies?
We are intrested as investors projecting our rate of future returns.

[Apache]

Well, it's true that they have an option of cans but we know that cans also come with their own health hazards (i'm not even going to the environment hazards if any)
I don't know of anywhere in the world where bottled beers have been banned and i don't see Nigeria been an exception (although i don't know anywhere in the world where they use beer bottles as candlestick stands)
But i can assure you that if this happens, it will definitely hit their profitability negatively. I don't see Nafdac going through with this plan if there is any truth in it. rather i would expect them to ensure the brewery/ beverage companies put more mechanisms in place to ensure that they get cleaner bottles. That should be a cheaper and less disastrous but effective alternative than complete ban

[c kenneths]

Yes some primitive ppl(sorry for my choice of words) do use bottles to stand candles and even to pour in things as deadly as kerosene.

If bottles are banned, then it will impact negatively to the profits of beer and beverage companies, cause if they could find any other cheaper alternative, they would have done so.

Secondly plastic cans as an alternative doesn't seem to have worked very much for NBC and 7up.

They still use bottles for 50 cl products.

[Apache]

Guys,
Have you seen NBC's third quarter result. 816% growth in PAT kudos NBC. they should be giving us a bonus this year abi how una see am

[pumping]

Originally Posted by Apache

Guys,
Have you seen NBC's third quarter result. 816% growth in PAT kudos NBC. they should be giving us a bonus this year abi how una see am

I hope I am looking at the right results

I think the result is very poor. NBC already declared a PAT of 1.68B for Q-2 and now they are declaring a PAT of 1.677B for Q-3.

It actually translates to a loss in the last quarter.

I think this is why it took a hit today and lost over 3%.

[Apache]

yeah, you are right pumping. I actually looked at my forecast figures i had made for NBC abt 4 months ago and i had calculated then that they should be making abt =N=4b in FY and but with this 3rd quarter result, i don't think that will be possible anymore even though the result is looking good compared to same period last year.
Don't think it will be wise to get in now

[Gengen]

As most of us know, having a good 1st (or 2nd quarter) unaudited results is not a guarantee that the company's annual audited result will be proportionately close to 4 times (or 2 times) the quarterly results respectively.

However, there are some "high calibre" companies that this will be the case. I initially catergorised NBC as a "high calibre" company.

I checked my records and found the following NBC unauditted results:

NBC's 2007 2nd Quarter Profit after tax = N1.680 billion
NBC's 2007 3rd Quarter Profit after tax = N1.677 billion

Based on the 2nd quarter results, I believe many people, including myself, made investment decisions based on this. However, to the surprise of many, the 3rd quarter results is almost same as 2nd quarter.

As we all know, the figures quoted here are unaudited. Also, companies can do the following:

1. "Intentionally" phase their expeditures the way they like which can result in discrepancies like this.
2. Not legally bound to have unaudited results close to audited results.
3. "Intentionally" make the company look good earlier during in early quarters of their financial year by issuing supportive unaudited results. As the financial year gets closer, latter unaudted results may then reflect the through picture.

I did NOT expect this from a company's of NBC's calibre and I am dissapointed.

However, other "high calibre" companies (Cadbury, Unilever) have also demonstrated traits unexpected of them in past in one way or the other.

"One does not know whom to trust any longer"

[Apache]

Well, i am not too happy with the result but we have to understand that NBC is a company that is currently undergoing some major restructuring and as such, they will having some write offs, laying off staff etc and as you know, all these come with their cost, as such this result might not be surprising.
I compared their turnover in the 3rd quarter against the 2nd quarter and it increased by 41%. so maybe there was a write off in this quarter or something(can't really tell) but the growth in turnover within the quarters gives a ray of hope that whatever happened is "one off" and there's a high possibility that there's no manipulation going on.
Consider this scenario, if i have a cost that i have to write/pay off and i have the option of paying it over a period of time or paying it at once, i will look at the financial sittuation of the coy and then decide. Probably what might have happened is that they saw that they are doing very well and decided to pay off the cost at once knowing that it will still leave them in a good situation and the future will even be brighter (assuming that the cost is one off) My 2 cents

[c kenneths]

Somehow, I never came across that NBC result untill now and I am now of the opinion that the expected full yr profits will not be as much as previously projected.

The only thing it will do to the company is to reduce its stock price to around N55. Thank God I sold last week.

[newton]

Well not exactly ken, I think apache has a pt wt his illustration. The full yr earnings might come in just as strong as expected plus from precedence they tend to make abt 40% of a full yr earning in Q4 due to increased consumer demand for their products during the yuletide!

[crtide]

Originally Posted by newton

Well not exactly ken, I think apache has a pt wt his illustration. The full yr earnings might come in just as strong as expected plus from precedence they tend to make abt 40% of a full yr earning in Q4 due to increased consumer demand for their products during the yuletide!

And also considering that there are two celebrations in the these last two weeks of December alone, Eid and Xmas I expect stronger sales than if it were just Xmas celebrations alone in Dec.

[c kenneths]

Originally Posted by crtide

And also considering that there are two celebrations in the these last two weeks of December alone, Eid and Xmas I expect stronger sales than if it were just Xmas celebrations alone in Dec.

Even if the company happens to make up its profit shortfall in Q4, remember that it will still be less than what it should have been had they made some good profit in Q3.

The festive season notwithstanding, do you know if there are still other items to be written off and they will be expecting to 'hide' it inside the profits of Q4?

[Apache]

The profit forecast for NBC this year was about =N=4b whcih i don't think they can meet anymore going by their 3rd quarter result for this year but still i won't recommend a sell.

[hispy99]

Got this from a sister abi na brother site

NIGERIAN BOTTLING COMPANY PLC
FULL YEAR ACCOUNTS FOR THE YEAR ENDED DEC 31ST 2007
2007 2006
TURNOVER N68.529b N59.674b
PROFIT BEFORE TAXATION N4.346b N614.489m
PROFIT AFTER TAXATION N3.172b N1.051b
PROFIT AFTER TAXATION AND
MINORITY INTEREST N3.166b N1.042m
PROPOSED DIVIDEND 75K
CLOSURE OF REGISTER MAY 12TH TO 16TH 2008
PAYMENT DATE JUNE 2, 2008
NOTE: AGM EKO HOTEL & SUITES ADETOKUNBO
ADEMOLA STREET VICTORIA ISLAND LAGOS
ON FRIDAY MAY 30, 2008 AT 11 A.M

[Apache]

Originally Posted by hispy99

Got this from a sister abi na brother site

NIGERIAN BOTTLING COMPANY PLC
FULL YEAR ACCOUNTS FOR THE YEAR ENDED DEC 31ST 2007
2007 2006
TURNOVER N68.529b N59.674b
PROFIT BEFORE TAXATION N4.346b N614.489m
PROFIT AFTER TAXATION N3.172b N1.051b
PROFIT AFTER TAXATION AND
MINORITY INTEREST N3.166b N1.042m
PROPOSED DIVIDEND 75K
CLOSURE OF REGISTER MAY 12TH TO 16TH 2008
PAYMENT DATE JUNE 2, 2008
NOTE: AGM EKO HOTEL & SUITES ADETOKUNBO
ADEMOLA STREET VICTORIA ISLAND LAGOS
ON FRIDAY MAY 30, 2008 AT 11 A.M

The result was good as expected but this kobo kobo dividend, me no find am funny o!(I wasn't expecting a bonus, but at least they should have given dividend in the naira range)
Will give Roland Ebelt a piece of my mind on the 30th. I should be able to find out from him what the profit/ growth target for 2008/09 will be let me position myself.
Well, with this result and at today's price, NBC has a current EPS of about 2.42 and PE of 23
If they grow their PAT by just 25% (which is very conservative), their forward PE comes to 19 at today's price. fi they grow PAT by 50%, the forward PE comes to 16.
Guys, NBC just entered my Buy recommendation (though would recommend you enter within the 50s range)