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In the dynamic Nigerian business sector, several companies like Zenith Bank, Guaranty Trust holdings (GTCO) Plc, United Bank for Africa (UBA) Plc Okomu Oil and BUA Foods Plc, among other have emerged the beacon of profitability, boasting significant profit margins that sets them apart from their competitors.
Profit margin is a common measure of the degree to which a company or a particular business activity makes money. Expressed as a percentage, it represents the portion of a company’s sales revenue that it gets to keep as a profit, after subtracting all of its costs.
These orgainisations have been able to navigate the macroeconomic headwinds through focus/market penetration strategies, cost controls, introduction of innovation products which have helped galvanise efficiency.
Of course, the Banks have benefitted from monetary policies as a high interest rate that underpinned net interest margin and devaluation of currency added impetus to the bottom line.
However, manufacturers who are always at the receiving end of a harsh and unpredictable macroeconomic environment capitulated to huge foreign exchange losses that tipped some of them into net loss for the first time in decades.
We have decided to rank companies by profit margin in the first quarter of (H1) 2023 and our findings will blow your mind.
- Geregu Power Plc
2023 Profit Margin: 23.21 %
As of last trade Geregu Power PLC (GEREGU:LAG) traded at 305.60, -12.69% below its 52-week high of 350.00, set on Jul 18, 2023.
Geregu power PLC is a Nigeria-based power generation company. The Company generates electric power and supplies to the National Grid managed by the Transmission Company of Nigeria (TCN).
The first power company to list on the exchange has a market capitalisation of N848.50 billion and shareholders’ fund of N37.17 billion.
- FBN Holdings Plc (FBHN: LAG)
2022 Profit Margin: 28.53%
FBN Holdings Plc, the parent company of First Bank of Nigeria, is a highly successful company known for exceptional financial services and customer commitment. Its focus on innovation brings cutting-edge technologies and trends to its customers.
With total assets exceeding N14.17 trillion and a net income of N187.17 billion in June 2023, FBN Holdings dedication to customer service has helped build long-lasting relationships and contribute to its profitability.
- BUA Cement
Profit Margin: 29.66 %
BUA Cement Plc is a Nigeria-based cement manufacturing company. The Company is primarily engaged in manufacturing and sale of cement to the general public. The Company produces CEM II type of cement under BUA Cement brand.
The second largest producer of the building material in Africa’s most populous nation generated revenue of N221.06 billion and net income of N63.61 billion as at June 2023.
BUA secured a $500 million loan from IFC, with the first tranche of US$300mn disbursed in April 2023. The loan has an interest rate of 6-month SOFR + 5.5% with a moratorium period of 2.5 years on principal, implying that the company will begin to feel the impact of the loan repayment in the second half (H2)-23.
- BUA Foods Plc ((BUACEMENT.LG)
2023 Profit Margin: 29.36 %
BUA Food Plc’s impressive margin growth has been largely driven by increasing production capacity and capacity.
The company did not feel the impact of foreign exchange loss in the second quarter due to its supply chain hedging strategy.
- Zenith Bank Plc (ZENITHB.LG)
2023 Profit Margin: 30.16 %
Zenith Bank (ZENITHB.LG) is a financial powerhouse that boasts impressive numbers and figures. With over 30 million customers worldwide and assets totaling N16.30 trillion, this bank is truly a force to be reckoned with.
In the first six months of 2023 alone, Zenith Bank generated a net income of N291.76 billion, making it one of the most profitable companies in Nigeria. Additionally, the bank has a market capitalization of N1.06 trillion, cementing its position as one of the country’s largest and most successful financial institutions.
- Stanbic IBTC Bank PLC (IBTC Plc)
2023 Profit Margin: 31.88 %
Stanbic IBTC Bank PLC is a financial holding company. The Company offers a range of personal, business and commercial banking products. It operates through three segments: Business & Commercial clients (BCC), Wholesale Client (WC) and Consumer & High Net Worth client (CHNW).
- Presco (PRESCO PLC)
2023 Profit Margin: 31.38 %
Presco (PRESCO PLC) is one of the largest Agric companies listed in the NGX ASI; it reported a revenue of N46.74 billion and a net income of N15.08 billion as at June 2023.
- United Bank for Africa PLC (UBA PLC).
2023 Profit Margin: 38.53%
UBA has growing operations in 20 African countries, the UK, USA, with a Rep office in France. The lender has commenced full operation in the UAE with a 73-year history, making it one of the strongest and most recognised banking brands to originate from Sub-Sahara Africa.
With more than 30 million customers across the globe, and a market capitlisation of N560.15 billion, United Bank for Africa is one of the most pivotal firms in the country’s financial ecosystem.
- Guaranty Trust Holding Company PLC (GTCO: LAG)
2023 Profit Margin: 41.70%
Guaranty Trust Holdings Company Plc posted growth across all asset lines and continues to maintain a well-structured and diversified balance sheet across all jurisdictions wherein it operates a Banking franchise, as well as across its Payments, Pension and Funds Management business verticals: closing June 2023 with total assets of N8.5 trillion representing a 32.0% growth over N6.45 trillion recorded in as at December 2022.
- Okomu Oil Palm Company Plc: (OKOMUOI.LG)
2023 Profit Margin: 56.47%
The Okomu Oil Palm Company Plc is a Nigeria-based company. The principal activities of the Company are the cultivation of oil palm, processing of fresh fruit bunches into crude palm oil for resale, rubber plantation, and processing of rubber lumps to rubber cake for export. The Company operates through three segments