NIPCO PLC – CHAIRMAN’S SPEECH FOR AGM 2022

Distinguished shareholders, members of the Board of Directors of NIPCO Plc, Esteemed customers and representatives of the various regulatory bodies, gentlemen of the press, invited guests, ladies and gentlemen, It is with great pleasure and delight that I welcome you all to the 19th Annual General Meeting of NIPCO Plc and to present to you the Annual Report and Accounts for the financial year ended 31st December 2022.

Before I proceed, I want to express my appreciation to all of you for your continued unwavering commitment and support which has been instrumental to the company’s performance.

At this 19th AGM, I will be reviewing the economic and financial environment within which our company operated in the fiscal year under review.

BUSINESS ENVIRONMENT

Our economy continued to maintain a positive growth in 2022 since exiting the recession in 2020. Also, according to the national Bureau of Statistics (NBS), Gross Domestic Product (GDP) grew by 3.10percent in 2022, lower than the 3.40 percent recorded in 2021. Specifically, GDP grew by 3.11percent in Q1 2022, 3.54 percent in Q2 2022, 2.25 percent in Q3 2022, and 3.52in Q4 2022.

FOREIGN EXCHANGE

The foreign exchange market continued to experience pressure in 2022. This was majorly due to the high demand for dollars, rising global inflation rate caused by disruptions in supply of food products, increased import costs due to persistent currency depreciation, ongoing conflicts in Eastern Europe and a general increase in production costs due to high energy prices and a decline in forex inflow from foreign capital flows, remittances, and oil exports. As of December 2022, the exchange rate stood at N461.1 /$1 at the Investors’ and Exporters’ Window, while banks continued to sell foreign currencies to retail customers following the ban of Bureau De Change Operators by the Central Bank of Nigeria.

According to data from the Central Bank of Nigeria (CBN), our reserves got depleted in 2022. It closed at $537.08 billion, having declined by $3.44 billion from $540.52 billion at the beginning of the year.

OPERATING RESULTS/ DIVIDEND

Distinguished shareholders, during the last AGM, your company announced a turnover of =N298.98B and a profit after tax of =N2.01B. However, notwithstanding the tough business environment which we worked under for the Year 2022, your company made a turnover of about =N=461.26B and a profit after tax of =N=8.27B.

To demonstrate our unwavering commitment, we have ensured that a significant portion of our profit is set aside for you. The Board is pleased to recommend a total dividend of =N=938.34 M translating into =N= 5:00k per share from the profit after tax for the financial year ended 31st December 2022. The Management has retained the sum of =N= 7.33B as retained profit to strengthen our working capital requirement.

We acknowledge the impressive performance of our high performing team in their consistent delivery of superior value to you our shareholders.

LPG/WHITE OIL

We are happy with the progress our company has made over the years. We remain committed to strengthening and expanding our LPG operations through the deployment of more skids across the country. We have been able to penetrate most states of the country thereby increasing our customer strength greatly. We maintained a focus on making relevant investments to ensure that our model remains efficient, effective and relevant. We recorded a superior performance in our sales volume both in white oil and Liquefied Petroleum Gas.

CORPORATE SOCIAL RESPONSIBILITY

NIPCO Plc as a responsible corporate body has remained committed to building a more balanced economy which is why we continue to internalize sustainability principles in our business operations and investment decisions in line with best practices in making impact on the society at large.

MACROECONOMIC OUTLOOK

Nigerian economy is expected to continue to grow through 2023 but at a subdued pace. The World Bank expects a 2.9 percent expansion, while the CBN forecasts a 3.03 percent growth rate. Limitations to our growth remains; persistent high inflation, scarcity of premium motor spirit, high energy prices, rising cost of debt servicing, deteriorating fiscal balances and so on.

The Federal Government of Nigeria 2023 budget has an aggregate expenditure estimate of N21.83 trillion representing 27percent increase compared to the N17.13trillion budget for the 2022 fiscal year. The budget is predicated on crude oil production estimate of 1.69million barrels per day, and exchange rate of N435.57/$1, real GDP growth of 3.75percent and an inflation rate of 17.16 percent. Overall, the economic prospect in 2023 remains that of cautious optimism. Notwithstanding the challenges in the year under review, we were able to record an outstanding performance that further attests to our resilience as a company.

CONCLUSION

The year 2022 was very successful and outstanding for NIPCO PLC considering the sterling growth recorded.

The exemplary performance recorded this year was made possible by the collective efforts of all our staff, Management and Board. I am thankful to the Management and Board of our Company for their hard work and dedication which has resulted in the delivery of this superlative performance today.

I immensely appreciate our customers and shareholders for their steadfast loyalty and trust in the Company.

I appreciate our regulators from Securities and Exchange Commission, NASD and the Corporate Affairs Commission for their consistent engagements and supervision. I also appreciate our stakeholders – NNPC, NLNG, PPPRA, PPMC, DPR and PEF for their continued support.

I welcome you all to this AGM with a strong assurance of better days ahead.
God bless our Company, NIPCO PLC.

Chief Dr Bestman P. Anekwe
Chairman