Nigeria's Largest Companies By Daniel Ailemen
The rationale behind the compilation of the best Nigerian business organizations in the capital market on the Nigerian Exchange (NGX) formerly Nigeria Stock Exchange as the leading brands in corporate, is to profile the Top 100 quoted companies. This from their turnover (revenue), total assets and profits based on their latest financial reports, 2020 annual reports. The Non- quoted companies were not considered in this survey:
The Nigerian Economy in Perspective:
The year 2020 commenced with mixed feelings on the other hand, the bright prospects of the central banks expansionary monetary policy had begun to permeate the economy. However, the outbreak of the novel corona virus (covid-19) impacted negative on the global economy and Nigeria was not left out. The covid-19 pandemic which started in March 2020 crippled by lockdown measures and international travel restriction by the government. Consequently, global supply chains were disrupted, manufacturing activities halted and service sectors slowed down considerably. This sent shocks to financial markets, resulting in a free fall of equity prices as investors looked for safe-haven asset classes, corresponding crude oil price declined dramatically, as the pandemic-related restrictions took a devastating toll on the demand for crude products. To abate the effect of the pandemic on economic activities. The Nigeria government implemented some monetary and fiscal stimulus package to support individuals and businesses, as very few business sectors were spared from the devastating economic effects of the pandemic. Despite these stimulus packages and the pickup in the price of crude, the Nigerian economy entered a recession by the 3rd quarter of the year following to consecutive quarterly GDP contractions of 6.10% in Q2 2020 and 3.62% in Q3 2020 Ultimately, the country existed the recession in the final quarter of 2020, recording a quarterly growth rate of 0.11%. On an annual basis, real output contracted by 1.92% in 2020 from a growth of 2.27% in the preceding year. The out sector contracted by 8.89% in 2020 from 4.59% growth on 2019. Similarly, the non-oil sectors contracted by 1.25% in 2020, compared with a growth of 2.06% in 2019. The average rate of inflation increased to 13.21% in 2020 (closing at 15.75% from 11.39% in 2019). The exchange rate came to N410.25/$ at the end of 2020. Interest rate continued to trend downwards during the year. Consequently, interest rate on corporate, SMEs and individual loans Net Domestic credit grow by 17.6% from N36.2 trillion on 2019 to N42.6 Trillion in 2020.
100 Nigerian Largest Companies
From a careful study of 2020 annual reports, the purpose of achieving an unbiased ranking of about 150 quoted companies on the NGX were examined and it shows that they operated in an atmosphere of stiff competition and challenges from exogenous factors such as covid-19 pandemic in which competitive advantage can vanish overnight. Yet, some of the companies never fail to astonish their shareholders in a manners with which they deliver huge returns at the end of the year. The survey of the 2020 financial performance of these companies also shows that 13 of the companies had assets in trillions of naira. For instance, Access Bank coming first position with N8.680 trillion can pay off more than 70 companies quoted on the NGX total asset base. Similarly, Zenith Bank came second with N8.481trillion assets; United Bank for Africa has N7.697 trillion on the third position while FBN holding on the fourth position has N7.689 trillion. The report shown on the revenue or turnover side of these quoted companies declaring huge turnover in trillion and billions of Naira, while MTN Nigeria and Dangote Cement revenue for 2020 were in trillions of Naira of revenue. MTN Nigeria coming first with N1.346 trillion revenue and Dangote Cement N1.034 trillion in second position representing the ICT and Industrial goods sectors respectively. The Banking Industry in the financial sector of the NGX dominate revenue in billions with Access Bank coming third with N764.72 billion revenue in 2020, Zenith Bank came fourth with N696.45 billion, UBA on it fifth position with N620 billion and FBN holding on the sixth position with N579.43 billion. Again, worth noting in this report is that more than 80 percent of the quoted companies revenue put together is what MTN Nigeria, Dangote Cement, or Access Bank made as an individual company. On the profits performance, some blue chip organizations’ profits for 2020 alone is more than 70 percent of the whole quoted companies profit put together. For instance, when you examine Dangote Cement N276.1 billion profit in 2020 topping the profit ranking table to a company like Cadbury Nigeria declaring less than a billion Naira in profit of 2020 financial Year, one begins to wonder what is happening to the non-performing company? On the second position with huge profit is Zenith Bank with N230.57 billion, followed by MTN Nigeria with N205.21 billion. The fourth position is GTB N201.44 billion and UBA came fifth position with N113.8 billion profit. A look at the report cards of corporate Companies on the NGX shows that market capitalization of the Top 25 quoted companies gives more than 70 percent of the total market capitalization in the NGX. Similarly these blue chips organizations have more work force employed and salaries and benefits paid running into billions of Naira. For instance, among the top 10 paying companies in 2020 is Dangote cement. The company paid N16.2 billion as take-home pay and benefits to its employees, while Julius Berger paid N12.2 billion, UBA N10.8 billion, FBN Holding N8.3 billion, Zenith Bank N7.5 billion, Access Bank N6.8 billion, GTB N5.2 billion, Flourmills of Nigeria N5.0 billion, FCMB N3.6 billion and Nigerian Breweries N2.9 billion in that order. In that same trajectory, the top 10 tax payers to Nigeria government includes Dangote. Cement paying N97.2 billion tax, MTN Nigeria N93.7 billion, GTB N36.7 billion. Other paying huge tax includes; Zenith Bank N25.3 billion, Nestle Nigeria N21.4 billion, Access bank N19.9 billion, UBA N18.1 billion, Dangote Sugar refinery N15.9 billion, International Breweries N12.5 billion, Stanbic IBTC Holding N11.51 and FBN Holdings N8.11 billion in that order.
Sectorial Leaders
A critical analysis of investment portfolios in listed companies categories into their nature business sectors by the NGX shows that we have 11 group of companies in the following sectors:- Financial services sectors, Industrial Goods sectors, ICT sector. Others are Conglomerates. oil and gas, consumer goods, agriculture, service sectors, Others includes; Healthcare, Construction/Real Estate and natural resources sectors. The Top 3 Sectional Leaders ranked in the 2020 financial operating year are shown in the table tables herewith. The financial analysis of the performance of the largest companies in Nigeria shows some innovativeness and creativities by their management staffs led by their CEOs. In a situation where a company with a good assets based but couldn’t turn it into good revenue earning machine and consequently into profit, shows the weakness of such management teams and it’s CEOs. Whereas some companies in similar situation did better, the management and its CEOs taking advantage of the economy environment. A company with good asset based goes a long way in performance. Another critical revelation on the performance of Nigeria’s 100 top companies shows that making good sales/revenue or turnover does not guarantee Profit. From the table of ranked companies financial service sector (Banking Industry) and the ICT sectors (Telecommunications) apart from Dangote and BUA made profit than many companies with tangible Physical present. For instance, with all the activities of Julius Berger, Nigerian Breweries and the likes in NGX profits cannot be compared to the banks and telecommunication companies in the NGX. Similarly, revenue generated by MTN Nigeria with little Physical structure in the country made more revenue than many banks put together. This is why 2020 financial performance rating is interesting considering the Covid-19 pandemic on business performance and activities. Can we? say the more you do the less you get or the smart work pays more than work hard. Profit is the bottom line in business. That, notwithstanding the nature of business now is determined by the abilities of CEOs and their management staffs to perform in the economics of a country, comparative advantage comes to play.
