NMB, CRDB top mover as DSE market turnover more than double

The price of Tanzania Oxygen Ltd (TOL) dropped the most during the week that ended on 26th August 2022 despite the counter’s shares trading cum-dividend.

On the other hand, after a long dry spell, some activities were seen on the TCC counter following positive results and dividend announcements while banks keep dominating the market in terms of turnovers.

The price of TOL dropped by 7.14% to close the week for 650/- per share despite the shares trading cum-dividend until 09th September 2022.

The approved dividend of TZS 40/- per share, is a 15% increase from the previous year’s dividend, and 70% of the net profit for the year 2021 which amounted to TZS 3.3bln, being a 40.5% profit growth compared to the year 2020.

The company saw its revenue grow by 25% during the year 2021, mainly from the accessories segment.

TOL has three major revenue streams; industrial gases which usually accounts for more than 95% of the total income and saw a 9% growth during 2021, accessories segment which grew more than 10 times during 2021 after a sharp increase in demand for medical equipment and oxygen cylinders to the government and private hospitals in the fight against COVID-19, and installation, rental and services which more than halved during the year 2021. Raw materials have been doubling annually since 2019, leading to a drop in gross margins from 45% in 2019, and 43% in 2020 down to 41% in 2021.

During the year 2021, TOL procured and commissioned a brand new Air Separation Unit to replace the old Aspen 1000 plant which the company looks to dispose of. The new ASU is more efficient and looks to save the company significant costs and boost supplies for oxygen and nitrogen. TOL also sees increased demand for carbon dioxide locally and within the SADC region and is looking to capitalize on the market by doubling the production of CO2.

On the other hand, TCC saw a revival of activities on its counter, trading 125,000 shares in two prearranged block transactions, for TZS 5,000/-, accounting for 16% of the total market turnover for the week. The trading price is a 70% discount from the market closing price and produces an estimated trailing P/E ratio of 7.45x and a trailing dividend yield of 12%. As exports recover from the pandemic, TCC reported revenue growth of 10.8% for the first half of 2022 compared to a similar period in 2021.

Revenue grew slower than volume sales (14.2%) giving a signal of consumers transferring to lower brands as the cost of living rises. The company is still improving operational efficiency seen in the improvement of profit margins, while the net profit grew by 31.5%. The company announced a dividend of TZS 300/- per share. The counter will trade cum-dividend until 12th September and the dividend will be paid on or about 11th October 2022. TCC reported a 12% revenue growth and a profit growth of 66% for the year 2021. The improved net margin from 13% to 19% was mostly due to the containment of operational expenses.

During the week, TCCIA Investment Company Ltd (TICL) released its quarterly results for the quarter ending June 2022, and the total income doubled compared to the quarter ending March 2021.

TICL reported a total income of TZS 1.07bln for the quarter, of which half is from dividends paid by NMB which is the largest holding by the company. TICL expects another estimated TZS 85mln from the TCC announced a dividend, to be paid in October 2022.

TICL is a fund manager, raking most of its income from dividends and interest income. Due to the underperformance of equities before 2021, the company had a deliberate strategy to shift a significant chunk of its investments into Treasury bonds. Currently, equity and bond holdings make up 94% of the company’s total assets. Equity holdings have grown by more than 30% since the beginning of the year. The company paid a dividend of TZS 10/- per share and is currently trading for TZS 260/- per share.

The total turnover on the DSE for the week more than doubled every week, to a total of TZS 3.9bln. The two largest banks, CRDB and NMB are still the top movers, collectively accounting for 56.3% of the total turnover. Investors’ appetite for the two banks has been increasing since last year due to outstanding performance and handsome dividend payments.

Swissport (SWISS) was also active during the week, after accounting for 25.4% of the total turnover after a prearranged block transaction of 550,000 shares was executed for TZS 1,800/- per share, a discount of 5.3% from the market closing price. Swiss’ closing price also went down 3% to close the week at TZS 1,900/-.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button